It seems that more and more transactions are falling apart at the last minute these days... It make the agents involved frustrated and if it is their only deal in a while it can become depressing.
In my office, I have about 180 agents that work for me, so I started doing some research as to why deals were falling apart in our office to see if any could have been saved early on...
I also started teaching classes on this subject, and here are some of the points that I came up with. Some of it is common sense by they way. But a good refresher non the less.
Deals fall apart on the most part because of something the buyer found out about the house that they didn't know prior to making an offer. Tangible and intangible things like repairs, section 1, noise, crime, values, neighborhood stuff, appraisals etc... Sometimes deals fall apart because the buyer gets cold feet, buyer finds another home they want more or they get declined on the loan. Then of course the millions of other reasons that I am not describing.
So lets look at some of the main reasons. (non Bank Owned and Short Sale stuff...)
1. Before we ever write offers on homes, see if there are pre-inspections done on the home. In Silicon Valley CA, we urge that ALL LISTINGS have a property inspection, pest inspection, roof inspection, Natural Hazard, Environmental & Tax status report and chimney inspection. (If there is a pool or spa, that too). This way all potential buyers will know everything that is wrong with the house prior to making an offer. There will be no surprises along the way, and the offer price that they ask will be harder to negotiate at time of removal of contingencies. This way, the buyer has been walked through the property and knows the cost of all repairs and knows what is right with the property and wrong with the property. So as a listing agent, I recommend that you do all your inspections and post them on your website for all to see. Then require ALL buyers agents to review the documentation and submit signed copies of the reports when they submit the offer. Also, think about doing the repairs prior to putting on the market. A $500 paint job in the buyers eyes, will have them thinking $5,000 of the purchase price...
2. The appraisal can hurt the deal as well. So be sure to to CMA's on the property to substantiate the price. Meet the appraiser and show them your comps, and how you can substantiate the price. Be prepared to make your case. You are NOT convincing the appraiser or FORCING then to come up with the price, you are helping them.
3. Be sure to get your buyer pre-approved with a bank, not just the mortgage company. Be sure the application was submitted to the bank and you received approval from the bank, and that it is current. Submit your pre-approval letter with your offer, and as a listing agent, do not accept any offers unless the buyer is pre-approved. Not pre-qualified. This way you know that the buyer has met with the lender and discussed payment options and is comfortable with the payments on the new home.
4. Be sure to be very aware of the contingency timeframes that you set in the contract. Get on the phone with the other agent and be sure that all parties know when they are to be removed. Talk with your buyer about when they are to be removed so there are no surprises.
5. Stay in conversation with your clients, the other agent, the title & Escrow company (or lawyers), everyone! The best way to avoid any problems with the other professionals is to stay in contact with them and TELL THE TRUTH!
6. Human nature always has us taking credit when things go good! "I got the loan to fund, I got the title company to close" But then again we push of credit when things go bad. "They loan company didn't fund, the escrow company messed up". It is always a sign of a professional when you use the word WE when it was two of you that were at fault or two of you that had the success. "We weren't able to get the loan to fund... WE weren't able to close on time" "We were able to fund the loan, etc...".
Have a great day!
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