Millions of homes are bought and sold each year where the seller and buyer work together, and where a real estate agent works with or for a seller or buyer. The way everyone – buyer, seller, and professionals – work together has a massive impact on whether a home sells or the sale falls through. Sales fall through for many different reasons, and time is often the cause of many. Time can kill home deals, for example, because:
- The buyers have time to change their minds about the home, the neighborhood, the school district, or the commute time. Sometimes because between writing the offer and completing the sale, the buyer loses their job or gets a job transfer into another area.
- The buyer and seller have enough time to have an argument over something, and the buyer walks. Buying and selling homes is stressful, and people can argue over the smallest things. Any Realtor with at least a couple of years’ experience will quote instances of a buyer walking away from the contract – and losing their escrow (or good faith) deposit. That deposit does not necessarily go to the injured party, in this case the seller, because the contract may stipulate it is used to cover, say, appraiser fees if the appraisal has been done, or it goes to the real estate companies to cover their costs. The seller may lay claim to the good faith deposit, the buyer may challenge it, and everything gets put on hold until the legal dispute gets settled.
- The buyer’s loan falls through. That can even happen a day before closing because, for example, the buyer celebrates by buying new furniture on credit, and that results in them not qualifying for their mortgage anymore.
- The title agent, handling the post-contract legal work, or the mortgage lender misses a deadline. This is not common, but with the changes made to the Truth in Lending Act and the Real Estate Settlement Procedures Act in 2016, post-contract work got more complex. The new rules introduced by the law are being modified again, and even though they are in force, they do not become mandatory until October 2018. To quote the Consumer Financial Protection Bureau (CFPB) the new ruling “also makes a limited number of additional substantive changes where the Bureau has identified discrete solutions to specific implementation challenges.”Briefly, this means lenders must tell buyers of any changes to their loan criteria with enough time for the buyer to know about them, and to try to improve on them if possible. If the buyer does not have enough time to review and understand the changes, they can delay buying the home or the sale can completely collapse. Time can be critical, here, especially if the buyer is using an online lender based in a different time zone. The lender may issue the paperwork by their time zone’s deadline, but the buyer may not receive it by their time zone’s deadline.
- One of the agents, working with either the seller or the buyer, fails to do their job properly.
These five different situations can be catastrophic to a sale. Most buyers and sellers rely on their real estate agent to “ride shotgun” and either manage the technicalities or liaise with all the people involved to keep everything on track. The longer the time between contract and completion, the more likely it is that something will go wrong.
Time really is of the essence in a home sale. And hoping the real estate agent will stay on top of everything may not be possible. Let us discuss that one in more detail.
Many real estate agents are also Realtors, but others are not. Many agents are hardworking, experienced, deliver high-quality service, and more often than not, produce good results. It is a sobering thought, though, that the average number of homes sold in a year is, six or seven per agent
One closed sale every two months is not all that frequent when you think about it. When you also consider that successful agents may sell 20, 50, or 100 homes in a year it begs three questions:
- How knowledgeable, skilful, and able to handle problems are the thousands of agents who only sell two or three homes in a year? These agents are often working part-time in real estate and have regular employment elsewhere or are retired. They use real estate to supplement their other income, so may not be available to deal with an important or a last-minute problem.
- How much time can a very successful agent give to each contract if they are handling two or three sales in any one week, especially if they are also showing homes to other buyers, marketing properties for other sellers, looking for new business, and attending all the meetings and mandatory educational courses, etc? Many of these successful agents rely on office staff to manage their business once a contract is in place, so they are not personally involved day-to-day.
- How do you know the Realtor who wants to sell your home or who brings a buyer to view your home is going to give enough time and effort to solve problems, handle the complex project of getting from contract to completion, manage the interactions between the parties, the home inspectors, mortgage company, title company, title attorney, repair contractors, etc? This may be a bigger question if the agent is new to the business, only works part-time or has bigger and more lucrative contracts to handle.
The longer a contract is worked on, the more likely something will go wrong. Time is the enemy in a real estate transaction. Some buyers get pre-approved but later on, they fail to get fully approved for their loan. A home inspector may find a problem (remember the inspector is working for the buyer) that frightens the buyer off or which is too expensive for the seller to pay for. Or, something simple may just not get completed by the date set out in the contract, so the contract automatically fails.
Every seller wants to sell in as short a time as possible and with as little hassle and disappointment as possible. If this is how you see your property selling, please click here to contact Seller’s Advantage or call us at 1-800-208-3243 to get a no-cost, no-obligation quote on your home. We purchase homes in AS-IS condition and can give you a cash offer in as little as 24 hours.