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Ralph's Helpful Tips: Holding Deals Together - How to Get Creative

Real Estate Broker/Owner with Metro Life Homes RS-78439 / BRE #01708344

Ralph's Helpful Tips:  Holding Deals Together - How to Get Creative

Purchasing a home these days is not as simple of a task as most people think.  Even just negotiating the purchase contract has so many more elements now than it used to.  I hear all the time from some of the agents who have been in the business for 20+ years how they used to sign deals on the hood of their car!

But going past the point of a mutually accepted offer, there's the huge task of getting through the escrow all the way towards closing.  And I know everyone out there can relate.  We all have had and continue to have our episodes of bumpy escrows.

I've been known as a "dog with a bone" when it comes to holding deals together.  I NEVER give up when it starts to get a little turbulent.

The key to that is creativity, and knowledge.  Knowing what possible options are available when you come to what seems like a possible road block in your escrow is absolutely critical, and the biggest difference between those agents with a higher or lower closing ratio is exactly this factor.

Knowing the legalities of not only a real estate transaction but with mortgage loans is absolutely a prerequisite.  It is imperative that you know the current guidelines for the different types of loans available for buyers out there now.  Why?  Because knowing what to anticipate AHEAD of time will more than likely eliminate any hurdles before they become problematic.

An example:  FHA loans are a fantastic tool these days for buyers.  Government backed, and only 3.5% down payment.  But these types of loans have a long list of lender requirements.  You need to learn how to play "Matchie-Matchie" between the buyer's loan and the property itself in order to pave the way for a smooth escrow closing.

Knowing what to do and options available to your client when you hit a hurdle is extremely important.

An example:  What do you do when the property does not appraise?  What are the possible options at that point?  Here are some options that may hold your deal together:

1. Draw up an addendum to the purchase contract reducing the price to the appraised value (if the seller agrees).

2. Have the buyer bring in the difference in cash (if the buyer agrees and IF their lender will allow more than 100% loan to value ratio)

3. See if the seller can hold back a small 2nd lien on the property for the difference between appraised value and purchase price (if the buyer agrees and feels the home is worth that much to them, and IF the buyer's lender will allow it).  Maybe a small term like 5 years or less with a favorable interest rate to the seller.

4. Challenge the appraisal (this one topic is a blog post in itself).  A rebuttal to an appraisal is NOT a simple and easy thing to do.  I've challenged appraisals in the past with success, but it is a detailed report you must submit with market statistics, comps, testimonials from the selling agents of the comps, market trend reports, and a presentation as to why the appraisal is incorrect.  This is going to an underwriter, so OPINION DOES NOT MATTER one bit when it comes to challenging an appraisal.

5. Small loan from another party or hard money lender (if the buyer's loan guidelines will allow)

6. Any combination of the above.

These are just some of the ways to get over what may seem at the time to be an insurmountable issue.

Appraisals are just one of many possible issues that may arise.  Inspection issues, HOA issues, loan issues, seller logistic issues, and more may come up.  And knowing how to get through these and what the many different solutions are will help you close more deals.

If you think it would be useful, I can make a blog series out of this topic.  Let me know if you think it would be helpful and depending on the response, I will make a commitment to creating a series.



Evelyn Kennedy
Alain Pinel Realtors - Alameda, CA
Alameda, Real Estate, Alameda, CA


Appraisals are the bane of our existence now.  Because there are so many multiple offers, sales prices are climbing, but appraisals are still in the down market.  With recent comps and homes that pending and soon to close, sometimes we can successfully challenge an appraisal.  But it is not easy.

Jul 23, 2012 02:25 PM
Digital Digital
Alachua, FL
full service

Hi Ralph,

Congrats on the feature.

I think having a blog series would be very educational.

All the best!

Jul 23, 2012 03:00 PM
Praful Thakkar
LAER Realty Partners - Burlington, MA
Metro Boston Homes For Sale

Ralph, I do not see you here more often now-a-days.

Congrats on featured post - perhaps timely, too, as I am afraid my listing may not appraise at the offer price from the buyer! (Yes, my seller client feels I am a Hero - and I am now worried, what if....) At least, now I have some clue on what are the options - rather than just one!

One of the option, not stated here directly that I used once (when HVCC came into effect) was splitting the difference between buyers and sellers - after rebuttal. (Never had to go to that stage as rebuttal worked!)

Would love the whole series on this, Ralph.

Jul 23, 2012 03:53 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Ralph - I think understanding lending is helpful in getting our transactions closed for our buyers and sellers, and creativity and just plain stubbornness go without saying.

Jul 23, 2012 03:56 PM
Virtual Realty Consultants
Virtual Realty Consultants LLC - Wellesley, MA
Making the American Dream a Reality

I often see the communication process with lenders is one-sided.  We do our best to stay on top of things and to be in touch with them.  They never return our calls - even with client authorization.

Jul 23, 2012 10:02 PM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thank you for the tips. Congratulations on the feature.

Jul 23, 2012 10:29 PM
Mike&Marie Edwards
Estes Village properties & Plains Real Estate in Greely/Windsor - Fort Collins, CO
"We Bring You Home To Colorado"

Hi Ralph - what a great reminder and we agree. It's important to have an understanding of the lender side of the transaction also.

Jul 23, 2012 11:00 PM
Karen Crowson
Coldwell Banker Residential Brokerage - Rancho Bernardo, CA
Your Agent for Change
Ralph, the creative problem solving aspect of this business is one of he most rewarding parts. Knowledge is power, and answers exist. It's forums like theses that help us add to our creative toolbox. So, yes. I would welcome a series. I started a group a while back, http://activerain.com/groups/CreativeSolutions. Might be a good spot for these posts:)
Jul 23, 2012 11:15 PM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Great suggestions! We probably do a bit of this and a bit of that on your list, but so nice to see it all laid out like this to remind us about getting creative.

Jul 23, 2012 11:28 PM
Peter Michelbach
International, IT
i Sell Real Estate

Ralph -- thanks for the pre-planning and pro active strategies. Please do share the other 'secrets'!

I too signed deals on the hood of the car, on the back of my clients kids, as they all wanted to be included and 'help'. Karen, #12, thank you too for sharing another creative tool box - I'm curious to know more.


Jul 23, 2012 11:29 PM
Brenda Starr
United Real Estate Austin - Austin, TX
Service with a Starr

Do it!  The series on FHA guidelines I mean.  I loved your blog, very helpful, and I think your series would be extremely helpful.  I guess I've been lucky so far with my FHA loans but that doesn't mean there won't be hiccups in the future.  Thanks again!

Jul 24, 2012 12:38 AM
Wayne Jackson
Lakeshore Realty 208-714-4109 - Hayden, ID
North Idaho Realtor, Serving Coeur dnullAlene and Hayden Lake

Ralph, Thanks for the helpful info. In my area, if it doesn't appraise, the seller lowers the price 99% of the time. The problem is with new construction- there's no room to adjust the price.

Jul 24, 2012 01:14 AM
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Ralph , great post.  In this market we are like you - hold every deal together that you can!

Jul 24, 2012 02:07 AM
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Ralph, I agree about the "matchie matchie" making sure the property matches with the loan type. Buying a fixer with a FHA loan may cause some speed bumps in escrow. Thanks for your post today,

Jul 24, 2012 02:12 AM
M.C. Dwyer
Melody Russell Team at eXp Realty of California, Inc. - Felton, CA
MC Dwyer-Santa Cruz Mountains Property Specialist

Great post, Ralph.    If you think there might be a problem with the appraisal, may I also suggest showing up to let the appraiser in to the house, with a print out of comparable home sales.    It even helps to contact the listing agents of homes that are close to closing escrow, to see if they'll tell you the price, and include those in the group as well.

It would be a great service to provide future blogs on this topic!    Reblogged; thanks!

Jul 24, 2012 02:33 AM
Susan Neal
RE/MAX Gold, Fair Oaks - Fair Oaks, CA
Fair Oaks CA & Sacramento Area Real Estate Broker
Hi Ralph - You have the same philosophy as I have: as realtors, we are the professionals on whom our clients are relying for answers. We need to be problem solvers, not whiners. I'm often troubled when I hear an agent complain that a deal fell through, but they didn't even seem to try to save it. I'll ask them if they tried various things, and they either didn't even think of it or they just assumed they would be unsuccessful.
Jul 24, 2012 04:14 AM
Kimo Jarrett
Cyber Properties - Huntington Beach, CA
Pro Lifestyle Solutions

The appraisal or home inspection is usually why a deal will fall apart because unless the seller secures an appraisal and inspection prior to listing to validate their asking price, closing could be a challenge, couldn't it?

Jul 24, 2012 07:32 AM
Sharon Sanchez
Ace Home Realty - Carson, CA
Your Number "1" Source For Real Estate.

Great post.  I do whatever I can to hold the transaction together and overcome whatever obstacles that come along.  It can be challenging at times, but I do my best to be creative if necessary and get the transaction closed.  Also knowing how the lending side works is essential.

Jul 24, 2012 09:12 AM
Dora Griffin
D A Griffin Financial.LLC - Fort Thomas, KY
NMLS 6380

Tons of issues come up. A really big TIP is for real estate agents is to ALLOW plenty of time when writing contracts. From the lending side of things writing contracts for quick closes just sets not only the deal up for failure, it sets up buyers, sellers and agents for unnecessary stress.

It is only going to get harder with all the government intervention into the lending business. Money laundering will be another new requirement next month. They will be tracing the money even more. Give  yourself time to close and everyone can show up smiling.

Jul 26, 2012 05:53 AM
Anja Kerstens, 669.270.8034
Compass - Morgan Hill, CA
GRI, NHCB, CDPE, CHS. Silicon Valley Homes

Ralph, good tips.  Rebuttal aren't easy but that doesn't mean we should do them when we disagree. Yes, they are a lot of work and no, our clients have no idea how hard we work for them.

Jul 28, 2012 02:16 PM