One of the biggest disappointments for Tallahassee home sellers is a termination form signed by the buyers.
Did you know that a third of the offers on Tallahassee homes do NOT make it to the closing table? What a headache! You listed your house and suffered through several days of NOT making any mess. Then you finally found a buyer, negotiated the terms and conditions. You might wait anxiously through inspections too (if you do not get a pre-listing inspection).
One of every three negotiated offers falls through and is terminated. As a Tallahassee Realtor, experience tells me that buyers punish sellers when this happens. I do not have a lot of data to back it up, but they ALWAYS ask what happened and why the home is back on the market. They take the information into consideration when deciding whether to ask for a tour and/or when submitting an offer.
Here are top six reasons why offers fail, and what you can do to keep it from happening to you.
Reason #1 – Buyer Financing.
This does not happen as often as it used to when I first started selling homes. Due to the strong seller’s market, we have had in Tallahassee, most buyers get preapproved before they make an offer. This leads to fewer surprises during the mortgage underwriting process. The Tallahassee real estate contract allows for 5 days for the buyer to submit their loan application. What You Can Do: As a seller, when evaluating the offer review the lender letter carefully and beware the buyer who does not submit one. You can call and speak to the lender and ask them if they have reviewed the financial documents of the buyer. They will not share personal financial information about the buyer, but they can give you an idea of how confident they are with the file getting to the closing table with what they have seen. Evaluate the amount of earnest money deposit offered on the first page of the contract. The higher the amount, the stronger the buyer’s prospects of successfully buying the house.
Reason #2 – Inspections – Deferred Maintenance.
If the inspection reveals something significant, the trust between the buyer and seller often breaks down. This is most common with new Tallahassee Realtors and/or first-time home buyers. The stakes are high, and the fear of the unknown is a big reason contracts terminate after inspection reports are reviewed. About 15% of the time, the inspection will reveal an undisclosed defect. A missing shingle that allowed an undetected roof leak in the dark corner, or a high radon level, or a termite infestation has ended in contract termination for Tallahassee sellers. If the revealed defect impacts the perceived value of the home, the buyer is going to want a concession. You would too. What You Can Do: Tallahassee sellers should get a pre-listing inspection before they list their home. If the buyer loses faith in the seller’s disclosure, they may walk away with no attempt to negotiate repairs. If the defect impacts value, you are going to want to address it before the next buyer submits an offer. Without information, the buyer will ask for a steep discount.
Reason #3 – Inspections – Failed to Negotiate Repairs.
The nightmare scenario for the Tallahassee seller is a buyer asking for everything in the inspection report to be repaired or addressed – including cosmetic defects. Roofs are one of the biggest things that I see negotiated in Tallahassee. Insurance companies have been reducing their risk where they can, and new roofs make them happy. What You Can Do: Address deferred maintenance before you list and DISCLOSE it to the buyer on the Tallahassee Seller’s Disclosure form. Consider instead asking a contractor for a proposal to address deferred maintenance. Even if you do not repair or replace anything, the buyer has an idea of what it will cost for a professional repair. Also, you will have information to help you negotiate repairs.
Reason #4 – Appraisal.
Tallahassee sellers have seen double-digit increases in home values in the past 36 months. Sometimes they price too high in hopes of anticipating the market. About 7% of the time, the appraisal comes back lower than the negotiated price on the house. There is some evidence that there has been a higher percentage in Tallahassee in recent months. With the Tallahassee Realtor’s association contract, either the buyer or the seller can choose to walk away if the house does not appraise at the negotiated value. What You Can Do: As a seller, keep your house in ‘show case’ order until after the appraiser has had a chance to see it in the best light and condition. If the house does not appraise, you will be given an opportunity to contest the value the appraiser found. The best way to do this though is to provide evidence that the appraiser missed. Rural homes run into this more often and comparable properties can be difficult to find for luxury homes.
Reason #5 – Buyer Gets Cold Feet.
The buyer can walk away for any reason during the first two weeks and sometimes they just get scared. The experience of their agent can make an enormous difference in keeping this from happening. What You Can Do: My professional recommendation here is to rely on influence research. For showings, leave snacks or bottles of water for buyers touring your home. Make a personal appeal to the selling team by leaving snacks and thank you notes for the inspector, appraiser, buyer, and/or buyer’s agent. My personal favorite takes some time to put together but never fails. As a seller, you have photos and memories of the home and neighborhood. Offer the buyer a notebook with additional information and photos about your home, the neighbors, and the neighborhood. Telling the story of your home will create a personal connection with the buyer that will help you get to the closing table.
Reason #6 – Homeowner’s Insurance.
Tallahassee Realtors see this more often recently due to insurance companies revising their risk guidelines. That means that sometimes buyers cannot find acceptable insurance for older homes. Sometimes buyers can find insurance, but the premium increases their monthly mortgage payment too much for comfort. What You Can Do: Talk to your insurance agent and let them know you are selling and ask if they will continue their coverage on the house for the new buyer. (Also, you will receive a refund from your escrow account when you sell. This is a good time to ask about this as well.) Ask your insurance agent to provide a declarations page and coverage proposal for the buyer.
A professional Realtor will help you navigate the selling of your Tallahassee home. And they will help you avoid mistakes! We would love to help. Contact us!