Real Estate Marketing Forum

What Else Can Go Wrong?!

Here in North Texas, our company had the most closings we had experienced in over three years in May and June...but then came July! I don't know whether it was the oppressive heat we were dealing with, or countless other factors, but everyone seemed to start getting cranky. That's when Realtors put on their counselor hat, and in July we wore that hat a lot. That comes with the territory, however, and that's why this article struck a chord with me: http://www.texasrealestate.com/web/2/21/more/080511.cfm.

There are a thousand little things that can develop during a real estate deal that can potentially "derail" the transaction. Your Realtor has seen it all if they've been around for a while. Put your faith in them, and they'll keep your deal on the tracks.

Accurately Disclose Property Condition

Seller's Disclosure Notice

One of the requirements of home sellers is filling out a "Seller's Disclosure Notice", disclosing the past and current condition of the property.  Sellers often don't want to disclose certain items because they believe it will scare off potential buyers, for instance, a repair that was made on a foundation.  Sellers naturally believe that buyers will shy away from their home if they disclose that foundation work had been done.  Their thought process is something like, "If it's been repaired, then why do I have to disclose it?" 

I'll See You in Court

Mike Statler is a long time property inspector I know who loves to say, "buyers don't mind problems, but they hate surprises."  After a buyer moves in, and something goes wrong with the house, the first thing that buyer is going to do is check their inspection report (to see if he missed something) and then check the Seller's Disclosure (to see if you hid something).  If they determine that you didn't fully disclose something, well, you've got a potential problem.  However, it's hard to pin the blame on the seller if the disclosure was filled out properly.

But, I've Never Occupied the Property

There are cases where the seller is not required to fill out a Sellers Disclosure, primarily if the property is bank owned (foreclosure).  In Texas there are eleven instances where a disclosure is not required.  Check with your agent if you are uncertain.

If They Love it, They'll Buy it

We buy emotionally, and we justify rationally.  This is a universal truth.  My experience with buyers is if they really love a certain property, they're going to overlook many potential problems.  I've never seen an accurate seller's disclosure scare off a buyer who really wants the property - in fact, I'm certain that in many instances, buyers never even read the sellers disclosure, they simply sign it.  So in the end, I believe the actual use of a Seller's Disclosure Notice is to keep the seller out of court after closing.  If you're a buyer, please read it, and show it to your inspector!

Keep Emotions in Check When Negotiating

Let's all agree that our home is our castle, and that we have put years of loving care into every update, and painstakingly maintained it for years and that if a buyer can't see that, well, they can just move on!

Stay Calm!

This may sound over-the-top, but if it does, you're probably not trying to sell your home right now.  If you are, the emotions feel familiar.  And an emotional response is something you need to avoid.  TRY not to be insulted if someone sends you a low offer.  That's the way it goes in buyer's markets (or almost any market, for that matter.)  The buyer may really, really want your property, but can't stand the thought of leaving any money on the table with an initially high offer.  It's really not personal, although it sure feels that way.

The point is to stay calm, and counter-offer (that ridiculous offer!)the best you can.  Don't try to read the mind of the buyers, or guess their intentions - this can drive you crazy, by the way.  See what happens after you counter back.  You might be pleasantly surprised.  Either way, especially if you have no other offers, you need to work any offer you get to the end.

Look at the Terms

When considering a counter-offer, terms are just as much in play as price.  What are your goals?  When do you need to move?  Will the buyer give you time to get out after closing?  Is the buyer offering cash, or getting 100% financing which may mean appraisal problems in the end?  Are they asking for anything else, like closing costs?  

Respond Professionally

When you send your counter-offer, remember to thank the buyer for their offer, and let them know you have carefully considered it, and look forward to hearing their response.  I've found through the years that most RESIDENTIAL buyers don't appreciate hard-nosed, abrasive responses, and will tend to hang in there with those that respond professionally, not emotionally.

If you Just Can't Make it Work

Look at the entire process you just went through, and consider where you are in the marketplace.  What did I learn through all this?  What adjustments do I need to make in order to sell to the next buyer?  What could I have done differently?  These are tough, look-in-the-mirror and take a deep breath questions, but understanding the truth of your situation and getting sold is the goal!

Sell Your Home Faster: Repair Amendments

In Texas, buyers can buy the right to an "option period" for a nominal fee, typically allowing them 7-10 days to inspect the property and conduct other due diligence, and if they choose to opt out during this period, their earnest money will be returned.  At the end of this process, buyers typically generate a repair amendment, requesting certain items be fixed.  In other words, they are negotiating for more before they will go and close.  Repair amendment requests can vary broadly from a lot to a little, and often has more to do with current market conditions and the amount of choices a buyer currently has in the particular market.  However, it can also indicate a buyer's state of mind about the property after completing inspections.

In my experience, when buyers ask for an extraordinarily long list of repairs, it's often because their enthusiasm for the deal is waning, and they are looking for a way out, and your refusal to make certain repairs will serve as justification to themselves to terminate.  You should find a way to determine what they really want.  The question I really want answered is this, "Do you still want the property?"  It's a fair question.  Lining up repairs is time consuming, and wouldn't you rather know up front if it's all for naught?  All this being said, however, the mere fact that the buyers wrote a repair amendment rather than a termination letter, indicates that you should continue to negotiate in good faith.  It's just that some buyers haven't figured out for themselves if they want out.  It can be frustrating, but it's part of the process.

Here are my recommendations.  First, don't get emotional about the repair amendment.  Often times, there is less to worry about than meets the eye.  If you're represented by an agent, ask him or her to talk with the buyer's agent and see if you could get an idea of which repairs are most important to the buyer.  Buyers frequently "pad" their requests, believing that they won't possibly get everything they are asking for, but if they ask for less, they may not get what is really important to them.  Personally, I think this tactic wastes time, but it's human nature.  

Second, and this is preferable, if the requests aren't unreasonable, and especially if they deal with safety issues, get pricing and offer the buyer money (towards their closing costs) in lieu of any / all repairs.  This may be in fact exactly what they want.  Many buyers are strapped for cash during home purchases, and they may in fact use the money to ease the initial burden and choose to make the repairs later.  The reason I like this option is because the buyer can choose their own vendors, and make sure items are repaired to their satisfaction, but again, not having to line up all these repairs saves time, which sellers have precious little of when trying to coordinate closing and moving!  Sellers, always keep in mind that this is also an emotional time for buyers - they are about to make a big investment! Everyone has to attempt to work together towards a satisfactory conclusion - a closing!