OK! I haven't totally given up blogging!
About a year and a half ago, I was at a party. Another guest, someone I'd worked with in a past life and sold a couple of homes to, asked me if I was still selling real estate. Oops!
A little light bulb went off, and I quickly figured out what my next phase of blogging was going to be.
Since then, I've written one post a week, and (thank you, Ixact) sent it to my shpere of influence, a base of about 500 people. And it's a huge help in keeping me connected to the people I've been doing business with over the years. More important, it's become a major sourse of repeat and referral transactions.
So if anyone out there is wondering if I'm still alive and well and selling real estate, the answer is "Yes!"
It was a pretty suburban townhouse that had been purchased a few years ago as a short sale and then renovated, with new kitchen and baths, all new flooring and fresh paint throughout. While the curb appeal wasn’t inspiring, the interior looked great. The owner, a real estate agent, had staged the place to encourage buyers to do foolish things to live there. It was also optimistically priced above what any home in the subdivision had sold for. And it went under contract just a few days after being listed.
When I showed it yesterday, it had just come back on the market, and at the time, I knew nothing of its history. My buyers liked the house – it ticked every one of their boxes. But they were uncomfortable with the list price. So, when I got home, I pulled out the listing history of this house and the neighbors.
According to the listing information, I learned of first buyers got cold feet about three days after the seller accepted their offer. And looking at the recent sales in the neighborhood, perhaps these buyers just came to their senses.
When people buy under pressure, especially the pressures of any multiple contract situation, they become quite susceptible to what we call “Buyers’ Remorse”. They wake up three days later ready to move to France to get out of the contract they just signed. They are convinced that the pretty new floors must have come from the flawed stock that Lumber Liquidators imported from China a while back, and they fear the new roof will blow off after the next big storm. But most of their anxiety comes from thinking they have paid too much.
Most buyers, whether it’s their first condo or that forever home, have at least one major bout of Buyers’ Remorse at some point in the transaction. If it’s at the very beginning, they can usually get out on one of the contingencies. But after all of these “outs” expire, things can get tricky – even nasty.
If sellers are comforted by the purchasers’ large earnest money check sitting in an escrow account, these funds are almost always released back to the buyers. Real estate purchase contracts are complicated, and a good lawyer can almost always find some arguable excuse to have one voided. And the home can’t be sold to someone else until the original buyers and the sellers agree to release each other from their agreement, and this includes how the earnest money is disposed of. In most cases, all of these funds go back to the buyers. The other interesting wrinkle in our boiler-plate contracts is that, if there is litigation, the losers have to pay the winners’ legal fees. Thus, most sellers let the deposit go and try to get on with the sale.
Buyers seem to be most vulnerable to Buyers’ Remorse immediately after the home inspection. If there is a condo or HOA document review period, the associations budget documents or the ground rules for living there can trigger a case of ice in the socks. And sometimes concerns can be justified.
Like most Realtors, I’ve seen my share of cold feet. Usually, Buyers’ Remorse is a temporary condition. They get over it and move on to buy their dream house where they live happily ever after. And when I have gotten clients out of transactions, almost all later regretted not going through with it, with a couple of huge exceptions!
When sellers are evaluating offers, it’s difficult to diagnose a case of Buyers’ Remorse waiting to happen. At this point, the reputation of the buyers’ agent becomes important, especially if they are known to have a large percentage of their transactions fail. If there are multiple offers, there is the possibility of having a backup offer. And it’s also a good idea for the listing agent to keep good records of who has been through the place to contact the other agents who may have other interested buyers.
Having buyers kick out of a contract is a bummer, for the sellers, the agents, and usually for the buyers. And it’s important, especially for the sellers, to get over it and move on. Who knows? Maybe it will be even better than the one that got away!