My New Outside Blog: Termination of Contract - Just Too Easy!

Termination of Contract - Just Too Easy!

Butterfly - Just too easy to lite & leave

With limited inventory in some of the affordable level price ranges in our area, the buyers are lining up to see the homes that just hit the market for sale.  They barely see a home and off to write an offer they go.  They want to beat the competition in submitting an offer.  The frustrated buyers fill driven to make an offer on home quickly as they know multiple offers will be brought forward and the seller will make a decision soon for which buyer will be given the opportunity to purchase.  It is a seller' market!

 

Quick decisions without a thoughtful process of working through some objections, research needed for possible obvious condition/remodel items just paves the way towards buyer remorse.  Cold feet takes place and the buyer terminates just to flutter to the next new home on the market.  Process repeated.

 

How to assist the buyer with a thoughtful decision to avoid termination?

 

  • Always a first - pre-approval of the buyer so they are informed as to costs associated with the purchase and be prepared with proper funds.  They will know their comfort ceiling for qualifying.  The lender letter of pre-approval will be a must to accompany an offer.  The affiliation with a well respected lender also may give a nice edge over other interested buyers in the property.
  • Location familiarity - the buyer should like the neighborhood and have concentrated on the area.  If schools are important the buyer should have already established an acceptance of the schools zoned for this property.  The buyer also should be aware of distance to employment and accept that commute time needed from the property to work.
  • Proper research on the history of the home - who is the builder, past sales history when you view the home.  Be ready to do quick research to validate price for the home and be able to coach your client on information so they can have a good foundation for price decision.

 

How to take measures to avoid termination & help your seller with decisions?

 

  • Upfront require a pre-approval letter and if further investigation is needed call the lender to find out more about their firm, appraisal ordering process & who they use, etc.
  • On multiple offers - prepare rankings of the best to least quality contract.  The best offer may not be the highest but has merit points such as cash buyer, etc.  Don't be afraid to recommend to the seller that they try to work out a contract that is lower but has better time frame for seller moving, no contingencies, etc.
  • Communication - key - to your clients but most of all to the buyer's agent.  Quick thoughtful communication keeps the process flowing and on a friendly bases.  A spirit of working together.
  • Look at time periods in the contract and try to minimize the time as much as possible i.e. option period.  Try to close the exit doors for the buyer just as quickly as realistic.  Less time then more likely to close.
  • Prior to listing - have needed repairs addressed that are major and will most likely be a hurdle in the process.  Obtain quotes on those that will not be repaired so the seller will have a bid in hand so there is no delay on a decision to agree to repair something .. no time ticking to give the buyer undo time to reconsider the purchase.

It's just too easy for the buyers to write up an offer and then take off to the next home.  Implement preventative steps that will help move a contract to closing.

Comment balloon 4 commentsConnie Goodrich • May 17 2013 12:29PM

Comments

Love the picture. Multiple offers are starting to happen. Always best to be prepared. Thanks for the tips.

Posted by Bill Reddington, Destin Florida Real Estate (Re/max Southern Realty) over 5 years ago

We are seeing offers come in without even a viewing first.  Then, the buyers apparently feel they can take their time to decide if they want the house.  

Posted by Joetta Fort, Independent Broker, Homes Denver to Boulder (The DiGiorgio Group) over 5 years ago

Connie-Good tips for helping Sellers protect their interests. Lots of things, some negative for the Seller, can happen for the Seller between the executed contract date and closing. A good plan, like you describe, can reduce the reaction time when things don't go as planned.

Posted by Wayne Johnson, San Antonio REALTOR, San Antonio Homes For Sale (Coldwell Banker D'Ann Harper REALTORS®) over 5 years ago

Good morning Connie,

You have provided some excellent tips in our crazy market of multiple offers. I had 5 offers recently on a listing and the first buyer in got cold feet 4 hours after submitting a full price offer. I'd rather they back out then..the house went over full price..their offer would not have won the bid anyway!!

Posted by Dorie Dillard CRS GRI ABR, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.346.1799) over 5 years ago

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