When thinking about selling your home, do you have concerns that a sale could blow out and leave you hanging? Have you heard stories from others like that?
It is a real concern. If a deal blows out, the sellers have to go through the hassle of showing the house again, and the listing agent has to find a way to re-ignite the urgency.
What are reasons for a cancellation?
- Buyer didn’t like being worked over by the seller and listing agent during the negotiations, and is looking for any reason to cancel.
- The house is in worse condition than expected.
- Sellers won’t do enough to satisfy the buyers’ request for repairs.
- HOA docs reveal conditions that are overly-restrictive.
- The buyers’ family squashes the deal.
Our contracts create a legally-binding agreement, and the sellers are locked in – you can’t cancel. Wouldn’t you want to do as much as possible to lock in the buyer before signing?
There are two easy things for sellers and listing agents to do to drastically cut down the chances of a sale cancelling:
- Have buyers also qualify with your lender of choice. Deals can cancel later from lending factors that were unknown in the beginning, but typically those were unknown because the lender was inexperienced and didn’t see them coming.
- I love the new practice of sellers providing a pre-listing home inspection report. Include the HOA docs, termite, and title report too – up front!
About the only thing left is the appraisal, but because you had an attractive price from the beginning, the value shouldn’t be too hard to substantiate.
I just had one where the inspector drove up in a $500 car, spent seven hours doing his inspection, and finally produced his written report a week later! Of course, he says the house is falling down!
This sale hasn’t cancelled yet – we are busy on supplying our own reports and demonstrations to offset the inspector’s findings. I should have gotten my own report in the beginning!
We’ve been doing it backwards all these years – supplying the due-diligence materilas from the start is a great way to avoid cancellations!
One thing to be careful of in inspections is differences in construction practices over time. Back in 2005 when I sold my house I had an inspection report done and it pointed out areas where the construction was standard for the time the house was built but not for 2005. One simple example is that back in 1978 GCFI outlets were not typically installed in Kitchens and Bathrooms. I did install them before selling as their cost was small.
Curious what “buyer’s family squashes the deal” means?
Kids get all excited about buying a fixer for $800,000, and can’t wait for mom and dad to see it.
The folks, who paid $250,000 for the family homestead years ago and haven’t been involved in real estate since, take one look around and blast the kids – and usually make it about all the repairs needed, and the likely six-figure cost.
The kids cancel the deal, and go back to the sidelines to wait for the market crash.
House BOMs, and is quickly scooped up by the next guy who recognizes that this is what you get in the new era.