I wrote an Open Letter to First Time Procrastinating Home Buyers a couple of days ago. The point of the post was to inform buyers that the deadline for writing an offer on a home was somewhere in October. This post garnered a lot of attention and comments. Of course, the best was from my new favorite McKinney, Texas Broker Kim Daughtery whose comment included "You're a genius." Thanks Kim. Flattery will get you referrals.
All kidding aside, there were some very profound comments that needed to be considered once my suddenly Barry Bond-sized noggin returned to its original size.
In particular, at least 3 very specific scenarios discussed in the comments which could spell trouble for real estate agents and lenders. Despite my flippant attitude above, each of us should think about the following very seriously.
Scenario 1: Your buyer misses the deadline and doesn't get the $8000.
Matt Stigliano aptly pointed out he expects lawsuits to arise if this is the case. I agree. Think we are wrong? Consider...
- What if you the lender says you can close in 40 days and it takes 50? Does it matter that the delay was caused by the buyer not submitting all docs on time?
- What if you the buyer's agent takes on a new client Oct 1st and don't write an offer until October 20th? If you miss the deadline, will your clients claim you didn't tell them about the risk? Does it matter if you did?
- What if you the seller's agent don't do due diligence with respect to pre-approval letters in multiple offer situations and the buyer your client selects can't close? Does it matter if you did?
- What if you the appraiser take 3 weeks to get your report submitted due to the glut of deals? Does it matter if you worked 60 hours per week just to accomplish that?
- More importantly, what if you the professional do everything right and it just doesn't work out?
Scenario 2: The buyer walks.
Does anyone really think this won't happen?
- How do you the buyer's agent educate the client to prevent this?
- How do you the seller's agent protect your client?
Scenario 3 The deadline isn't extended.
Many commentors believe the tax credit will be extended. I probably do as well. Certainly, we can predict NAR,etc will be all over Congress this fall to make it happen. That being said, I would never advise my client to that fact. This credit has been available in one form or another for well over a year. I am loathe to throw my support behind any petition for an increase on the grounds that buyers have somehow been unable to get motivated to get free money. Of course, if I have a client in that position, I'll probably have to swallow my principles and argue on their behalf.
In the meantime, my argument to them is "Why do you want to wait? What benefit do you expect to get? Rates aren't dropping. Inventory isn't improving. Where exactly do you think you'll make up the $8k if you are wrong?"
Here's the question though. Does merely mentioning the possiblity open you up to a lawsuit if it doesn't occur?
Despite Kim's faith, I don't have the answers. But, I have 2 months to figure it out and this is definitely not something I'm procrastinating about.
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