Disqualifiers You Need to Watch Out For When Buying or Selling Property
Ever wonder why a deal falls apart even when everything looks good on paper? Most of the time it’s a disqualifier – a rule, score, or requirement that stops the transaction dead in its tracks. Knowing these roadblocks ahead of time lets you fix them before they become a problem.
Typical Mortgage Disqualifiers
The most common blocker is the mortgage qualification process. Lenders look at your credit score, debt‑to‑income ratio, and down‑payment amount. A score under 620, for example, often disqualifies you from a conventional loan. If you’re aiming for zero‑down financing, you’ll need a higher score – usually 680 or more – because the lender is taking on more risk.
Debt matters, too. If you’re paying too much on credit cards or car loans, the debt‑to‑income ratio can push you over the 43% limit most banks use. Reducing balances before you apply can turn a denial into an approval.
Down payment size also matters. While $20,000 might feel solid, some programs want at least 5% of the purchase price. If the price is $350,000, you’d need $17,500. Anything less could trigger a disqualifier, especially for first‑time buyer grants that have strict caps.
Other Deal‑Killing Disqualifiers
Realtor fees are another surprise. In 2025 new rules after the NAR settlement let buyers negotiate or even get rebates, but many sellers still assume a flat 3% commission. If you’re not aware of those options, you could overpay or lose a buyer who can’t meet the cost.
Closing costs are often brushed off until the last minute. In North Carolina, buyer and seller each pay different fees – transfer tax, inspection, title search, etc. If you’re not budgeting for the average $4,000‑$6,000 range, a surprise bill can disqualify you from closing.
Shared ownership arrangements add another layer. When you buy a share of a house, you must understand how the ownership percentages work and what happens if a co‑owner passes away. Not having a clear agreement can halt the sale outright.
Finally, missing paperwork or incorrect disclosures can cause a deal to fall apart. A simple typo on a property valuation report or an outdated survey can give a buyer a reason to walk away.
So, what can you do?
- Check your credit score early and address any errors.
- Pay down high‑interest debt to improve your debt‑to‑income ratio.
- Save a buffer for down payment and closing costs – aim for at least 6% of the home price.
- Research local realtor fee structures and negotiate where possible.
- If you’re buying a share, get a legal agreement that covers death, divorce, and resale.
- Double‑check all documents before signing; small mistakes can become big roadblocks.
By spotting these disqualifiers early, you keep the process moving instead of hitting a dead end. The result? Faster closings, lower costs, and a smoother experience for everyone involved.