4 Common Contractual Pitfalls

Buying or selling a home is a significant financial transaction, and it's not uncommon for unexpected challenges to arise during the contractual process. Whether you're a buyer or a seller, understanding the potential pitfalls in real estate contracts is crucial to a successful and stress-free transaction. In this article, I will explore four common contractual pitfalls and why it is important to work with an experienced REALTOR® who can guide you through these challenges.

1. Incomplete or Inaccurate Disclosures

One of the first pitfalls that buyers and sellers can encounter is incomplete or inaccurate disclosures. In North Carolina, sellers are required to complete a property disclosure form, but they are not always obligated to reveal every detail about a home. In fact, sellers have the option to check “No Representation,” which means they either do not know or simply choose not to disclose certain information. This is why North Carolina is often referred to as a “Buyer Beware” state—placing more responsibility on buyers to investigate the true condition of a property. For buyers, this makes it critical to work with an experienced REALTOR® who can guide them through the process, help interpret disclosures, and ensure that inspections and due diligence are done thoroughly.

For sellers, while choosing “No Representation” is allowed, it is often in their best interest to answer disclosures honestly and accurately. Doing so can reduce the risk of disputes later, prevent deals from falling apart when inspections uncover issues, and protect against future legal problems. Proper disclosures build trust with buyers and can ultimately help ensure a smoother transaction for both sides. Incomplete or inaccurate disclosures—whether intentional or not—can lead to canceled contracts, negotiations breaking down, or even lawsuits. That’s why both buyers and sellers benefit from working with a knowledgeable real estate professional who can help them navigate this important step of the process.

2. Financing Contingency Challenges

Securing financing is one of the most critical parts of a real estate transaction, and it is also where many deals can fall apart. For sellers, an experienced REALTOR® knows how to evaluate offers beyond just the purchase price—carefully reviewing the buyer’s financing. A skilled agent will reach out directly to the buyer’s lender before an offer is accepted to confirm the strength of the pre-approval and to ask important questions about the buyer’s financial readiness. Even after an offer is accepted, an experienced agent will continue to check in with the lender throughout the process to ensure everything is on track and to address any potential issues quickly, helping prevent surprises that could derail the sale.

For buyers, an experienced REALTOR® plays an equally important role. They will connect you with trusted mortgage lenders, making sure you are working with professionals who can guide you through the loan process and avoid unnecessary delays. A knowledgeable agent will also ensure all financing contingencies are clearly defined and handled properly in the contract. Just as importantly, they will stay in close contact with your lender all the way to closing, keeping the process moving smoothly and giving you peace of mind.

In short, whether you are buying or selling, financing can make or break a deal. Having an experienced REALTOR® by your side ensures that communication with lenders is handled proactively, contingencies are managed correctly, and potential pitfalls are addressed before they become costly problems.

3. Appraisal Shortfalls

Appraisals are one of the most critical parts of the home buying and selling process, because lenders will only provide financing up to the appraised value of the property. For sellers, this means that even if a buyer is willing to pay more, the lender will not approve a loan above the appraised amount. An experienced REALTOR® will research comparable sales and market data to help you list your home at the right price from the start. This reduces the risk of your home sitting on the market too long or a deal falling through when the appraisal comes in lower than expected. If the appraisal does come in short, sellers are often faced with two options—agree to lower the price to match the appraised value or risk losing the buyer if they cannot or will not pay the difference.

For buyers, appraisals serve as a safeguard against overpaying for a home. An experienced REALTOR® will thoroughly research the market to help you make an informed offer that reflects the home’s true value and likelihood of appraising. Without this guidance, buyers who overbid may find themselves forced to back out of a contract if the seller refuses to adjust the price—losing not only their Due Diligence money, but also any funds already invested in inspections or other upfront costs.

In short, appraisals can make or break a deal. That’s why it is imperative for both buyers and sellers to work with an experienced REALTOR® who understands how to price, evaluate, and negotiate around appraisals—helping to protect your investment, your time, and your peace of mind..

4. Inspection Issues

Home inspections are a vital step in the buying and selling process because they uncover hidden issues that could affect a property’s value, safety, or livability. For sellers, an experienced REALTOR® can help you prepare by identifying common red flags ahead of time, advising on which repairs may be worth addressing before listing, and guiding you through negotiations if problems are found. This proactive approach can prevent deals from falling apart and helps maintain buyer confidence.

For buyers, inspections provide critical insight into the true condition of a home. An experienced REALTOR® knows how to interpret inspection reports, explain which issues are most important, and negotiate effectively for repairs or fair price adjustments. They ensure that buyers don’t overlook costly problems and that their investment is protected.

Without skilled representation, inspection negotiations can easily break down, leading to frustration or even canceled contracts. That’s why it is imperative for both buyers and sellers to work with an experienced REALTOR® who can manage the inspection process, keep negotiations productive, and guide the transaction to a successful closing.

The Importance of Working with an Experienced REALTOR®

An experienced REALTOR® is an invaluable asset in navigating the potential pitfalls of real estate contracts. They have the knowledge, expertise, and negotiation skills necessary to guide both buyers and sellers through the complex and often stressful process. REALTORS® ensure that all parties fully understand the contract terms, assist with disclosure issues, and help in securing financing and resolving appraisal and inspection concerns. In short, they are there to protect your interests and provide peace of mind during your real estate transaction.

In conclusion, real estate contracts can be fraught with challenges, but having an experienced REALTOR® by your side can help you avoid and overcome these common pitfalls. Their role is not just about buying or selling property; it's about facilitating a smooth and successful transaction that benefits and protects their clients.

As a licensed and experienced REALTOR® in the Piedmont Triad Area of NC with both the Accredited Buyer's Representative (ABR) and Seller Representative Specialist (SRS) designations from the National Association of REALTORS®, I bring a wealth of knowledge and expertise to assist you in your home buying or selling process. Whether you are buying or selling, you can rely on my professionalism and commitment to deliver exceptional service and results. I look forward to the opportunity to work with you.

Teresa Davis
REALTOR® with the PREMIERE Group of Real Broker LLC
Licensed Loan Originator NMLS# 2597433 with One Real Mortgage
(336) 688-3100
TeresaDavisHomes@gmail.com
TeresaDavisHomes.com