I’m sure we’ve all heard the phrase, “Don’t count your chickens before they’re hatched.” Today’s non-agrarian youth might be unaware, but this basically means anything can happen.
This is probably more the standard operating procedure (SoP) in the world of real estate than most other fields. For one reason, purchasing a new home is such a major decision people run on high alert. Add to that, humans are primarily emotional beings. Someone not normally prone to stress can find the whole process unusual and can easily lose their cool. Because of this real estate deals can quickly go from being a Done Deal to becoming an Atomic Explosion.
3 Stages of a Real Estate Deal
Stage 1. Once a home seller gets a contract signed by both parties, that deal should make it to closing 65-75% of the time. This percentage used to be higher but all the changes in financing has made things trickier when/if we get to Stage 3.
Stage 2 contains the home inspections and other related issues. In today’s Buyers Market, home buyers call all the shots; after all, there are currently 9,610 Louisville homes for sale. Any home seller who wants to move forward with the deal needs to look long and hard at the Repair Request given them and see if agreeing to all the items is worth the cost compared to potentially losing this Buyer.
A buyer’s power is also enhanced by carte blanche that lives in the inspection clause of our standard Louisville real estate contract.
When we get to Stage 3, we’re looking at whether or not the Buyer is going to be able to get all his financing in order and on time for the upcoming closing.
Deals Die for Many Reasons
I write about this particular topic today because I’m working to sell my client’s home. We made it through Stage 1 but in Stage 2, our Buyer requested that my client replace the entire roof, rather than just the $380 worth of repairs that the professional roofer identified. Do it, or he’d walk. I don’t have to tell you that this was far from reasonable. My client responded with a very generous offer that the Buyer promptly rejected and now we’re scrambling to find a new Buyer for my client’s home.
So please… learn from our pain that even solid agreements can fall apart when you least expect. To quote Oscar Wilde, “To expect the unexpected shows a thoroughly modern intellect.”