I received an introduction from a personal injury attorney I know to a client of his who received a sizable settlement. The settlement was going to allow this family to buy their first home and they wanted to settle in the Westlake/Thousand Oaks area.
Referrals can be tricky. They make up roughly 90% of my business – a fact I’m very proud of. I feel a deep sense of commitment to my client no matter what, but there is an added sense of responsibility to my referral source.
I am also a salesperson and know that a deal that doesn’t open is a deal that can’t close. So when this referral source asked me to wait for the client to reach out to me when they’re ready, I assumed this story would be over. I’m sure many of you can relate.
But sure enough, when their settlement was paid, they contacted me and they were ready to go!
Don’t pop the champagne just yet.
The first challenge for this couple was that they are living 5+ hours away from the area . In the market of the last 2 years, seeing a home before writing an offer was an insurmountable challenge since by the time they could come to the area, either the home would already be in escrow, or, the seller had the luxury of 20 or more offers. The dramatic slowdown in the pace of sales changed everything for them. We had 10 appointments for their first visit to the area.
They wrote an offer on House #7.
🍾 Nope, not yet.
Negotiations in a real estate purchase start immediately, as soon as the agents talk for the first time. The biggest stumbling block once an offer is accepted is the buyer’s investigation of the condition of the home and the subsequent repair requests.
Now comes the finesse, which does not include getting a deal done. It does include giving my clients the space to walk away if they don’t get enough of what they want, while NOT putting a positive spin on things and talking or selling them into doing a deal.
That’s what happened with these clients. To their credit, they didn’t play games. They proposed to the sellers the minimum of repairs they’d accept. And even though they had no appraisal or loan contingencies, and were the highest offer by $10,000, the sellers chose to play hardball.
I believe this was a gross miscalculation by the Seller’s Agent. Buyers in this market have the luxury of receiving homes in the best possible condition. In this case, several things came up in inspection including termite damage, water stains in the attic, and a furnace past its useful life. The sum total of credits my clients were asking for was just under $15,000 (roughly 1.3% of the sales price) for routine maintenance items the sellers could have addressed over the years they were living there.
It felt like the sellers got their feelings hurt by the buyer’s request and lost perspective of their need to sell (relocating out of the area). They had cash buyers that offered $10,000 above the second best offer and they underestimated the uncertain condition of the market.
Go ahead and put the bottle back in the fridge.
My client walked and I’m certainly ok with that. This purchase was doomed by maintenance issues that should have been addressed before going on the market and a seller who seemed to be negotiating in a market condition that no longer existed. They clearly misunderstood my buyer’s attachment to this particular home.
Here are the lessons:
•When selling, while this will be hard to do, don’t be emotionally attached. Do prepare your house by addressing delayed maintenance and cosmetic repairs before listing.
•When buying, when you negotiate for repairs, be clear on what is a must and what is a preference.
•Either way, you can always count on my standing by you.
My client canceled in mid-October. As of November 2nd, the property is still on the market and my clients and I are patiently shopping for the right home.
Who represents you in this market matters. If you or someone you know is having a life event where now is the right time to sell or buy, regardless of market condition, my years of experience and expertise will be meaningful.