Redfin: Long Island pending sales fall through far less often than U.S.

In recent months, it has been relatively rare that a home sale fell through on Long Island, local experts said — and Redfin data supports that.

Last month, 13.4% of home sales were canceled across the country, according to the brokerage. On Long Island, that figure was 3.5%.

"It's been a much hotter market compared to the rest of the country," said Redfin senior economist Asad Khan. "Sellers' markets tend to have lower cancellation rates."

Of 1,881 pending sales on the Island, 65 contracts were canceled in March, according to Redfin.

Over the past year, Hauppauge-based listing agent Jeffrey Jimenez said he had four sales fall through.

"We would get ready to put the house on the market, we would get it listed," said Jimenez, of EXP Realty, "and then something would happen."

When a sale does fall through, experts said there are a few likely explanations. On the seller's side, the most common cause is issues with permits or certificates of occupancy; on the opposite side, the problem tends to be buyer qualification, experts said. Sometimes, Jimenez said, a seller cannot find something else to buy and kills the deal.

Avoid CO issues

Douglas Elliman Real Estate agent Michelle Krapf said while she and her clients have rarely seen sales fall through, she had seen a missing certificate of occupancy interfere with a sale.

"If there's a certificate of occupancy issue with a home, such as an addition to a home, you may want to go ahead and correct that issue," she said. "It may be very complicated to correct that issue, depending on exactly what's been done."

If the project is complicated, Krapf said, the seller may choose to work with an all-cash buyer so that the issue does not get in the way of mortgage approval.

Home sellers can find out whether there are missing permits or certificates of occupancy by checking property records available through the municipality.

"You can go down to the village, you can access your file, you can look through it and see what's been done and what's been permitted for," Krapf said. "If you don't see a permit for, let's say, an addition, then you know you may have a problem."

Lawyer Michael Fedele, of the Melville-based Fedele Law Group, noted that permits must also be closed out after a project is completed. This information would be found in the building file as well, Fedele said.

As an example of a permit that might still be open, Fedele offered solar panels. "With the rise of solar panels, a lot of these companies will put the solar panels on the home," he said, "and then they'll pull the permit, and then they'll not close the permit."

When officials come to the house to close the permit, they may find other outstanding issues, Fedele said.

"What that could do is it holds up the closing, and it can even kill deals, because when you have a buyer, they have a certain amount of time to close with their bank usually," Fedele said.

If the sale is delayed, the buyer may be subject to additional fees or the bank may decide not to issue the loan, Fedele said.

Make sure buyers are eligible

If a buyer is taking out a mortgage, experts recommend doing due diligence to confirm their eligibility. "I always make sure that their agent vets their buyer," Fedele said.

This means getting proof of a recent pre-approval — "something from within 30 days, at minimum," he said — and making sure the bank actually ran their income numbers and credit scores.

A buyer might have unresolved credit issues that did not appear during pre-approval, Krapf said. Once, she said, a prospective buyer took out a car loan during the home buying process, which can affect credit.

"I would say mortgages falling through would be the number one issue, that the buyer cannot get the mortgage, after they've been qualified and everything," Krapf said.

In this case, the seller has to put the property back on the market and the buyer has to look for a new one while addressing the cause of mortgage denial.