What's Wrong With the House?

It has been a busy week with active escrows. I notice that many people and even some agents think "selling" a house is just about marketing, pricing and negotiating an offer.

While all of that is very important, it is just the beginning. There is so much work, skill and finesse that goes into successfully closing a sale.

On average, about 20–25% of transactions fall through.

While some fallout is expected, we do many things to mitigate and avoid a failed escrow. This is important for both buyers and sellers.

For sellers, when a deal falls through and returns to the market, they are in a defensive position. The first thing buyers and agents ask is, "What's wrong with the house?"

Then doubt sets in. What does someone else know that I don't? There must be something wrong.

We have seen new listings with multiple offers where the seller picks one, usually the highest price, and then the deal falls through.

Subsequently, the other buyers disappear and move on and then the home sits. It doesn't always make sense, but this is a people business involving emotions, human nature and psychology.

When a deal falls through, sellers lose time, momentum and leverage in the market. Also, any new information, findings or inspections that the seller receives from the first buyer now need to be disclosed to subsequent buyers.

For buyers, when a deal falls through, they lose time, incur out-of-pocket expenses for inspections, miss opportunities on other properties and lose appraisal fees and rate locks.

What we do To Minimize Failed escrows

We can do a lot for buyers and sellers to minimize failed escrows.

We do this by managing expectations, disclosing pertinent information upfront, asking sellers many questions and conducting pre-market inspections.

We advise our sellers that the best offer is not just about the price, but also the terms, the probability of closing and which buyer is likely to ask for the fewest concessions.

Some buyers and agents use the strategy of getting a home under contract and then grinding down later. We meet most of the buyers of our listings in person and subtly "interview" them to give our sellers our feedback and gut intuition.

We spend a lot of time during transactions managing and directing inspections, lenders, appraisers, insurance providers, sellers, tenants and property managers to ensure we avoid unexpected surprises and deals blowing up.

When done properly, an escrow should have a high chance of closing unless real issues are uncovered. Mold, structural issues, zoning, bad neighbors, insurance claims and appraisal issues are just some of the reasons a deal can fall apart.

Coming full circle, we have spent the better part of two weeks doing these things to get to successful closes. This experience and these skills make our clients' experience as smooth as possible during an emotional and stressful situation.

We write these emails to educate people on what great agents do. Our industry is very bad at showing its value and building credibility with the consumer. That is why we share these insights. There are a lot of great agents, not just us, but there are some who can really hurt their clients.

As always, let us know how we can help or if you have any questions.

READ THE FULL NEWSLETTER AND SEE ALL THE PROPERTY PICKS HERE