Imagine you are all set to buy your new home. You weren’t thinking of moving, it’s just that your friend told you that their neighbor was about to put their home on the market and they live on the BEST STREET EVER. So what do you do? Well, first, you call your highly competent real estate Broker (that’s me) and have him write up an offer in the hopes of getting an agreement in place before the home hits the market. The good news is that the market has slowed a bit and the seller is open to a contingent offer. This is important because you weren’t thinking of moving and you need to sell your house first. Great news, the seller accepts your offer and gives you 30 days to get your home under contract. No problem because your home is a great house, in a great neighborhood and the prospects for a relatively quick sale are good. The adventure begins.
Fast forward to day 28 of the 30 day contingency period and you finally get the offer you have been waiting for. Just in the nick of time! The buyer’s agent gushes on and on about how much his clients love the home; it is the perfect fit, in every way. What a relief because with only two days to go on your purchase contingency, you are a mere 48 hours away from losing your dream home.
The buyer is very well qualified and inspection should be a snap, I mean the subject property is immaculate, extremely well maintained and only a few years old. No problem. Then comes the phone call three days after the inspection was conducted. The buyer’s agent informs your Broker (yours truly) that his clients are terminating the agreement. They are walking without even giving the sellers the opportunity to fix any defects of concern. Why? Because there weren’t any defects of concern; the buyers just changed their mind and walked away, earnest money in hand, on to find another home. And there isn’t anything that the sellers can do about it.
Real estate contracts have a number of contingencies that protect the buyer, but frankly very few that protect the seller. It’s true that earnest money is put down at mutual acceptance as collateral that the buyer will act in good faith. However, there simply are a number of “outs” for buyers that allow them to terminate an agreement and walk away, earnest money in tact. Why, you ask? Because real estate agreements in the Evergreen State are based on the concept of protecting the consumer. I’m all for protecting the public, but it is my experience, and belief, that this has gone too far and that sellers deserve more protections within the purchase and sale process.
Don’t believe me? Buyers can terminate an agreement with a simple check of the box using the inspection contingency, the home owner’s review contingency, the title review contingency, the form 17 material defect review, the resale certificate/public offering statement, the list goes on. Sellers? Sellers have only one way to start the process of termination and that is by putting the buyer on notice regarding financing which typically takes place 30 days into the contract. Even then, the buyer can waive financing and stay in contract. This means that even though a seller may not have confidence that their buyer is acting in good faith, they simply have to wait it out until the closing date to see if they will perform. Selling to another buyer is not an option while under contract.
The good news is that my clients above were able to secure a second buyer within 24 hours of losing buyer number one. And they now live in that awesome house, on the best street in town. But boy, this story could have ended much differently, and often does. Sellers, make sure you do your due diligence when contemplating an offer. Make sure you feel as confident as possible that the buyer will perform. Because once you sign on the dotted line, whether a transaction closes or not, really isn’t up to you.
Be Real,
Blair