The house pictured above is my new listing in Jeremy Ranch. After about one week on the market, we received an attractive offer that my clients were happy to accept. One day later, buyer’s remorse set in and the buyers cancelled. Another couple who looked at the Jeremy Ranch house told me that two buyers backed out of the house they have been trying to sell. Today there are 9 listings on the Park City Multiple Listing Service that were under contract, but the deals fell through.
What’s going on?
I have a couple of theories.
Due diligence/inspections go sideways. In the Park City real estate market, prices in many parts of town are back to pre-recession levels. When buyers feel they are paying top dollar, they don’t want to invest additional funds to replace a furnace that is 20 years old or remediate radon. My colleagues are telling me that their deals are falling apart during the due diligence process because the buyer and seller cannot come to terms on these types of expenses.
Buyers are writing offers too soon. Because inventory is low, buyers feel like they need to lock in a house that they may like after the first showing. Upon closer reflection, they realize that the house isn’t right for them. They moved too fast and left some very disappointed sellers in their wake.
Buyers get cold feet. It’s no secret in real estate that sometimes buyers just get cold feet. They decide they don’t want the responsibility of home ownership after all, or unforeseen circumstances render it no longer a wise decision.
The purchase was contingent on the sale of the buyer’s home. A buyer backing out of a home for any of the above reasons can create a domino effect if the seller has already entered into a contract to purchase a replacement home.
So what isn’t hindering sales anymore? I have not seen many sales fall through due to financing or appraisal.
How do you prevent a sale from falling through?
This is where the expertise of an experienced agent is vital. A good agent will prescreen for serious buyers and have the negotiation skills to work through the due diligence process. Some deals can’t and may not be worth saving; however, with experienced representation, you will have the confidence that your agent did everything in her power to produce the best possible outcome.
1 Comment
Nancy…..I have a couple of suggestions on this topic. First, I think it is essential that we start to counsel all sellers over $500,000 to do a pre-inspection on their home. Sure it might cost them $500, but it could help to eliminate a sale falling through. That’s not to say that the buyer still won’t do their own inspection, but I think it shows good faith and confidence in the condition of a home when it has been gone over by a licensed, professional home inspector prior to listing.. The exception to this would be any home that is less than 3 years old. Due diligence is the most important part of any transaction and it is where most litigation or problems can occur. Why be afraid of it? Let’s get our sellers out in front on this issue and show buyers and buyers agents that out listing is ready to go! In regards to contingency offers I would suggest avoiding them unless there is a nice non-refundable earnest money. If the potential buyer is confident that his home is going to sell, then make him prove it with a non-refundable deposit. At the very least a 72 hour kick-out clause should be in place and the home should continue to be marketed aggressively. When agents take control of the sale then a lot of these weak deals never occur. Wishing and hoping is for people sitting on the bench…..the first team…the real winners are always in the game!