This article was written for BOTH buyers and sellers. It's pertinent because in today's real estate market, no one wants to have a "Sale Fail" at the last minute. A sale fail is exactly that: A sale (read: accepted offer) has failed, and fallen out of escrow.
The stigma of a BOM (back on market) property can really hurt a future sale. Since all Multiple Listing Services are set up differently, I'm not sure what data/information your local service provider keeps and displays. In my local RMLS everything is accounted for, including the days on market.
Back on market listings (sale fails) are denoted as "BOM" for real estate agents and appraisers to see. When I look up property for my clients I also check the history. important for me to know what has happened to the property in the past months.
Why was the home "Pending" and now "BOM"?
Did the sale fail have something to do with the home inspection that turned buyers off? Or, was it due to the buyers not being able to obtain funding? This current climate of uncertainly makes all of us skittish. As a seller, you want your property to have as little stigma as possible. A stigmatized property can cause buyers -- who have a plethora of properties available to them -- to skip touring your property altogether. WHY? A typical reaction from buyers is; "Hmmm . . . it's been on the market for 6 months, must not be a good house!"
Let's look at ways to avoid stigmatizing the listings, and goosing your listing to close:
Rule #1: Sellers: Do NOT accept an offer without scrutinizing it very carefully. The terms and conditions of the offer are so important. My advice is: Don’t get all excited just because an offer has arrived. If the terms and conditions don't meet your expectations of the sale, have your agent write up a counter-offer. Be reasonable with the counter and try to come to terms which are both mutually acceptable.
Rule #2: Sellers: Don’t be offended with a low ball offer. They are going to come in, especially now. If you have an offer, work with it. There is a buyer who wants to buy your place. Keep emotions out of it at this point, and as best you can.
Rule #3: Sellers: Whatever happens, don't let your listing agent place the home "PENDING" until you have ironed out all the fine points and have come to agreement. Again, a "Pending" sale is great! Everyone wants to breath a sigh of relief, and listing agents want to show the home they've listed is spoken for -- finally . . . whew! But don't be too anxious. Your local MLS may have rules indicating the times allowed for a status change. Make sure you follow them, but don't be so eager to change status from ACTIVE to PENDING until you're sure this is a solid offer. Having your listing go "back on the market" raises red flags in this climate, and you might be turning buyers off . . . and not getting your deal closed!!
Rule #4: Buyers: Make sure you have a "Pre-Approval" letter from a lender before presenting your offer. If you are paying with cash, obtain a "Verification of Funds" letter from your banking instutiion. Showing the sellers you have the funds available to close speaks volumes! You want your offer to make the BEST impression to the sellers at this time-- you want that deal don't you??
But go one step further, make absolutely sure that the Pre-Approval/Verification of Funds has come from a lender who is not going to tank three weeks out. The sub-prime market is going through some extremely arduous times now. A buyer with a Pre-Approval from an unknown entity might create a bump down the road, or might mean your offer isn't accepted at all. Make sure your finances are buttoned up, and you are ready to deal(see Rule #1).
Rule #5: Buyers: Make sure you know what the Underwriter's conditions are. Underwriters are akin to the Great and Powerful Oz in the "Wizard of Oz"; they're behind the magic curtain, calling all the shots. You never meet them, you never talk to them . . . but they hold all the cards. Realize this: Underwriters are fine tuning now. Their guidelines are more stringent and can even change WHILE you are in an offer to purchase. Talk to your loan rep about this. You and your real estate agent need to stay on top of this. Both listing agents and buyer agents need to communicate directly with the lender. In my local area our Sales Agreements have a pre-printed clause that allows the listing agents, and the buyer agents the ability to contact the lender in order to make inquiries, stipulating that only non-confidential information can be communicated. If your Sales Agreement / Offer to Purchase contracts don't contain this verbiage . . . ADD IT IN!
Make sure your deal gets goosed along. Remember, a done deal is a closed deal!
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