It finally happened. After months of searching, my clients found the perfect new home. Perfect! So we wrote a beautiful offer and waited. And waited. And then found out their offer was not selected. What a heart break.
So what went wrong? Let’s take a look at the ways Realtors help their clients to select the best of all the offers on the table.
First of all, there is purchase price. We had offered full price. Perhaps someone offered above the list price? The problem with offers above the list price is the property has to appraise at the value for a mortgage to be approved and funded, but maybe the successful buyer was willing to risk that, or come in with more cash if the need arose.
Second of all, there is the funding vehicle. My clients were putting 20 percent down, and borrowing eighty percent. This would be considered an excellent financing structure. However, they could have been beat out by someone with an all-cash offer. Cash trumps all. Or the successful buyer could have the same financing structure, but more perks in the details.
Third, how long will it take the transaction to close? There is an element of risk to time. Sellers want the deal to close quickly. We said we would close within a month, six weeks is the norm. If the other offer was all cash, they could close quicker. Or if the buyer was willing to waive their time for inspections, and their mortgage was well on its way it could happen in a couple of weeks.
And, finally, there are all the other incidentals. Is the buyer asking the seller to pay closing costs (customary in San Benito County) or are they willing to split that cost? Does the buyer want the seller to buy them a home warranty, which is sort of like an insurance policy for the systems and appliances for the year?
In this case, the seller wanted to stay in the property after the close of escrow. My buyers offered to let the seller do that for free, when generally the seller would pay the daily cost of the buyers’ mortgage payment, interest, taxes and insurance. Perhaps the successful buyer was willing to let them stay longer.
We will never know exactly why my clients did not get this house. We will see the final purchase price when it closes escrow (public information) but will not know the exact details.
Whoa, doggies. I will probably have every Realtor in town calling me to say, “Have them write an offer on my listing!” These people are excellent buyers, and there is a home waiting for them.
It is said that God never closes a door without opening a window. We all just wish it wasn’t such hell in the hallway.
It’s a good life.
Nants Foley is a Broker Associate (CalBRE 01222234) at Flora Real Estate Group in Hollister. You may contact her with questions or ideas for future columns at nantsfoley@gmail.com or 831.801.5110.