In some cases, your past experience will help you make a good decision about what to do in a current home-sale transaction. But if you rely only on past real estate experience to make decisions about selling a home today, you could end up with an unsatisfactory result.
The old rules, such as they were, don’t always work for the current home-sale market. For example, more purchase contracts specify that time is of the essence. In other words, contingencies will be met on time.
In today’s market, it’s often difficult for buyers to remove their financing contingencies on time unless they are paying all cash and don’t need to go through the rigors of mortgage underwriting. Due to no fault of the buyers, they often need to ask the sellers for an extension in order to satisfy a contingency.
Extensions should be reasonably granted but only after making due diligence investigations. For instance, it wouldn’t be wise to grant an extension to a buyer that hasn’t even submitted a loan application. In this case, it would be better to find yourself another, more dedicated buyer.
However, if the lender is so backlogged that it hasn’t had a chance to underwrite the buyers’ loan package, and there doesn’t appear to be a problem other than the time delay, grant the extension.
HOUSE HUNTING: To make it through a home purchase or sale in the current market, it’s important to understand the point of view of the person on the other side of the transaction. It’s impossible to control all facets of a home-sale transaction. Patience and compromise are essential.
When buyers are doing everything they can to make a deadline in the contract, or the closing date, but are delayed for conditions beyond their control, they are doing what they agreed to do.
Most buyers don’t like to ask for extensions any more than sellers like granting them. But, standing on principle could result in a dead deal. If you won’t grant an extension because a seller refused to grant you one in a previous transaction, you could find your home is back on the market.
Buyers have a choice. They don’t have to buy your house, no matter how much they like it. Some buyers will walk away from a home if they think the sellers are unreasonable or are treating them unfairly.
Another rule that is broken fairly often in the current market has to do with inspections. In situations where sellers provide buyers with presale inspection reports, the expectation is that buyers won’t come back and ask the sellers to pay to correct defects they were aware of when they made their offer.
Buyers were more forgiving in the bubble market when prices were rising rapidly. They felt they had less to lose and could afford to take on some of the repairs. Today’s buyers are more cautious and conservative. Some are more risk-averse than others.
Second opinions by buyers’ inspectors are more common today than they were when the market was hot. Second opinions can lead to different conclusions about the seriousness of a defect and the urgency for making repairs.
Although sellers may feel they’re being taken advantage of, they should weigh the merits of the offer in hand, even if it means settling for a lower price, before they decide to play hard ball. If you can’t resolve inspection issues, you might have to start over again searching for a buyer. This takes time and could cost more if you have to sell for less.
Disclosure obligations vary from state to state. Even so, it’s wise to make any future buyer aware of all reports generated on the property to protect yourself legally.
THE CLOSING: Another buyer might be even tougher on inspections.