Do you know when a real estate transaction is really done? Until the deed is recorded anything can happen, and it’s not just the buyer’s side that can throw a wrench into the deal.
Just like in scouting, the motto of a real estate transaction is BE PREPARED! Here are a few of the biggest places where deals can get hung up — and how to avoid them.
Pricing is one of the most important steps in listing your home, just for this reason. Every home sells twice, first to the buyer and then to the bank. Homes not appraising at the contract value has been a problem since the housing crisis, and will likely continue for years to come. Even when there are multiple offers, a third-party appraiser, who is not part of the deal, may not agree with the selling price.
This becomes a tough issue if you have a property that hits a number that the comps may not support. Make sure the agent who is present at the appraisal is well armed with comps and information to support the selling price. Seeing a contract price and address on paper is one thing, but to know there were 100 people through the home in three days with six offers, provides color and context.
It’s the call no one ever wants to get – the inspector found major problems with the home.
Unexpected inspection issues, particularly large ones, can cause scared buyers to walk away. For buyers who still want to move forward with the home, it means re-negotiating the purchase price or asking the seller for credits back. Another round of negotiations means the deal can go south quickly if both parties can’t work together.
When this happens, it’s helpful for all parties to put emotions aside and work together. If the buyer wants to buy, and the seller wants to sell, it means compromising. If this buyer walks, the next buyer could have the same problem. The best way to avoid deals going south due to inspections is to have the property inspected before going on the market. Iron out any issues that may arise and then price the property accordingly. Every seller should consider doing a pre-sales property inspection. This is not a guarantee that a different inspector will not find different issues, but the major concerns should be covered.
The buyer gets excited about a property and makes an offer, only to second-guess themselves once the deal is put together. Buyer’s remorse happens all the time in real estate.
Before you make an offer, or before the final round of counteroffers, ask yourself: Do I really love this home? Does the price make sense? Do I love this home for this price? It’s better to walk away before you get too emotionally involved in the process.
For sellers – be careful. If your buyer doesn’t seem to be fully committed, stops responding or doesn’t appear to have their ducks in a row, it might be better to wait for another buyer than to tie up the listing and have to go “back on the market.”
There are rare issues that come up that are completely unexpected. A neighbor makes a random disclosure, or the inspector finds something nobody else knew about or that a previous inspector missed. Maybe there’s an odd lien on the title report or something happens to the buyer, unexpectedly. In these cases, keep an open mind and go to plan B. A good listing agent will never change the status of the listing to “pending” unless the deal is truly done.
Most deals hit a bump or two but nothing that can’t be dealt with. Feel free to contact me and we can discuss any concerns you might have.