Advice for Sellers reduction of termination risk
Sellers should look for the highest offer that has a high probability of closing. Not only the highest offer price. Some buyers are submitting disingenuous offers to lock in a house. To then decide if they want it. For a small fee, the option period gives buyers the right to back out of the deal. Sometimes with hidden agendas, a high price is offered. The agent and buyer hoping the appraisal and negotiation for repairs can be bring the price down.
When a home is in contract sellers negotiating power goes down and buyers goes up. My advice to sellers is always the same. Look at the contract as a handshake and a framework for a transaction. Don’t believe because you have a contract the buyer will perform. All outs in a contract favor the buyer. If the deal does not close, it’s likely the seller will release the earnest money to the buyer. To reduce the risk of a failed transaction, communication is the key to a win win outcome.
To understand a sellers risk, there should be a friendly dialog with the buyer agent and lender. Questioned about the buyers level of interest to hear they have strong intentions. Second, we ask the lender how they approved the buyer. Only considered are offers with a conditional approval letter or proof of funds.
We want to understand the buyers living situation. To be sure they do not have a hidden contingency. All parties of the buyer should have seen the property. The lender should verify all income, assets, funds, and expenses by reviewing documentation. Questioning is smart due diligence and amounts to looking the other party in the eye. We want to hear them affirm the buyers credibility and stake their reputations on it.
I follow the doctrine of Ronald Reagan whom said “trust but verify”. It’s impossible to remove all risk of a failed real estate transaction. Satisfactory risk and high sincerity is the best offense to a winning transaction. Then, keep communication flowing so funding and closing activities stay on track.