Over the past 35 plus years of Real Estate I have been involved in approx. 2000 + - real estate transactions. The large majority of these have been with other investors.
For the past couple of years, it seems, that, as the number of Investors increase the overall ability to close has decreased.
It is my hope and desire that these tips will help both the buyer and seller to complete more deals with greater ease and less stress thus making the buy sell experience more enjoyable and profitable.
From a sellers point of view I have encountered 6 areas of the deals that have caused my buyers not to close.

Problem 1.Fear – Found mostly in the new investor. They have a tenancy to back out just before closing, leaving the seller high & dry.
Solution 1.Counsel with them as to their experience not only in Real Estate but in business. If this is their first deal “Use Caution”.

Problem 2.Inadequate financing. I have had less than 2% of my buyers over the years close through a secondary lender. (Mortgage Company)
Solution 2.Have buyer provide a bank letter of credit or availability of funds letter, most mortgage company loan commintant letters are so vague that they don’t commit to anything should buyer insist on using a mortgage company. I have started obtaining a 5% minimum non refundable earnest money deposit. However if the deal closes the buyer will be credited the amount of the deposit.

Problem 3.Unrealistic Contingencies or similar escape clauses I.E. Contingent on partners approval – Contingent on adequate financing – Contingent on 100% financing – Contingent on home inspection – Contingent on an extended closing (I.E. 90 days out) – Contingent on spouses approval – Earnest money tendered when all contingencies are removed.
Solution 3.I typically strike most contingencies from the offer, as these are usually nothing more than escape clauses when the buyer gets buyers remorse.

Problem 4.Over buying – 1. Trying to buy more properties than they can manage. 2. Buying properties that require more work than they are competent to complete. This can be detrimental to the buyers.
Solution 4.Buyers need to stay within their personal comfort level. Remember don’t rely on someone else, I.E. your contractor etc. They can leave you high and dry as well – only commit to what you can control.

Problem 5.Lack of integrity – I can’t say enough about this one. Integrity has been defined as “doing whats right even when no one is watching”. There are investors out there who are only in this business to make a “quick buck”. Unfortunately they give the professional investors a bad name. There are others whose word doesn’t mean anything; they too give the pros a bad name as well. In Stanley’s book the millionaire next door, and the millionaire mind, their number one common ingredient of the millionaire is integrity.
Solution 5.Try to find out who they have done business with in the past and what their experience has been with them, also rely on your sixth sense. I am very leery of someone who toots his or her own horn and brags how great they are – BEWARE.

Problem 6. -Paralysis of Analysis - May newer investors have a tendency to over analyze a property. Many times this is done to rule it out or to increase their comfort level. In either case it can put the seller in a bind by having to wait until all figures are in.
Solution 6 -Learn your market. I.E. price per square foot, as well as overall comps for your area. I recommend you specialize in a specific area which will enhance your ability to make quick decisions. Also learn all you can regarding cost estimate. There are a number of books on the market pertaining to this.

Over the past 8 months I have experienced each one of the 6 problems herein mentioned some more than once. Just this week a buyer who was purchasing 5 of my properties backed out 2 hours before closing. This came after I had given them 30 days to complete the transaction as a result they caused me to lose 2 tenants in addition to my carrying cost incurred.

In another instance a buyer backed out because he thought my tenant would buy the house he was buying from me. When she decided not to, he backed out.

I could give numerous other examples – and it only seems to be getting worse, so when dealing with buyers use caution.