"House Forensics"

Caveat, Sellers

It's not an ironclad rule of house hunting, but in general I think it's safe to say that more sophisticated Buyers head to the basement -- er, lower level -- first.

Why?

That's where they can inspect the foundation (or at least the part of it that's visible), the mechanicals, and look (smell) for water intrusion.

So, that's what I assumed my client this morning was up to when he headed downstairs.

It turns out, though, that his first stop was the utility room, where all the old paint cans were stored.

He wanted to see to see if there was any fresh paint, and if so, presumably what had required attention.

And?

There was a very old can of Rustoleum, but otherwise nothing that could be considered incriminating (if you have a sense of smell -- which I don't -- anything freshly painted is also pretty easily detectable).

Delivering Bad News -- How & When

Scoring Points for Courtesy

It's never great when one party to a transaction has to deliver bad news to the other -- like, for example, when the Buyer's inspection reveals a major issue (or several of them).

But it's always better to deliver such news quickly and directly, for three reasons:

One. Getting the issue(s) on the table gives the parties more time to resolve them.

While the timetable for resolving inspection issues can always be extended if both sides agree, it's good for a deal's momentum to get a head start understanding the scope of the problem(s), lining up second (or third) opinions, etc.

Two. If the problem(s) can't be resolved, both sides get to move on faster.

That's usually especially important to Sellers, who want to know if their deal is still intact -- and if not, to get back on the market as soon as possible.

Three. Good Will.

It's the unusual (or unusually confident) Seller that isn't at least a little bit anxious waiting for the results of the Buyer's inspection.

Minimizing the time they have to wait -- anxious and in limbo -- helps create/preserve good will -- good will that will be especially important negotiating the issue(s) to come.

Listing Prices & "Leaving Room to Negotiate"

No Discount on This One

In a Buyer's market like today's, it's not unusual for gun-shy Sellers to want to "pad" their initial asking price.

Their rationale?

No matter where they set their initial asking price, aggressive Buyers are simply going to discount further from there.

So, why not pick a listing price that "leaves a little room to negotiate?"

There are three reasons that's not a good idea:

One. Self-selected peer group.

If you set your price too high, your home will be compared to more impressive homes asking the same price. And found wanting.

So, yes, you may have "left yourself room to negotiate."

But that hardly matters if there aren't any offers (or even showings).

Two. Even in a Buyer's market, well-priced homes can sell quickly, for above asking price.

Case in point: 5035 Glenwood Ave. (pictured above) in Golden Valley.

Listed in late March for $289,000, it sold -- in multiple offers -- the first week.

Ultimate selling price: $305,000.

Three. No Realtor can promise their client that they won't receive lowball offers (for all I know, the owner of 5035 Glenwood received lowball offers, too).

But lowball offers are a lot easier to repel when there is also a full-price offer -- or even better, multiple offers above list price -- on the table.

For Sellers, negotiating leverage is all about how many prospective Buyers are interested in your home.

If you price too high, the answer is usually few . . . or none.

P.S.: another fringe benefit of pricing well, and attracting broad interest: Buyers tend to pull their punches when it comes to negotiating any inspection issues.

Home Sellers and Buyers' Intentions

Hiding the Wrecking Ball

Does it matter to the Seller if they know that their Buyer intends to do a "gut rehab?" (pretty much what it sounds like).

Sometimes.

There are certainly some home owners who are so psychologically identified with their home -- and think that its condition and appearance are so perfect, just the way they are -- that any suggestion otherwise is construed as a personal affront.

However . . .

Usually it's pretty apparent -- to prospective Buyers if not the Seller -- when a home is need of a total renovation.

Sellers who hear the same feedback, over and over, eventually become inured to the idea that the next owner of their home "may be making some changes."

Lots of Showings

Too, Buyers planning on doing extensive renovation will usually show their hand in the course of doing showings.

A lot of them.

Of course, the purpose of multiple showings -- typically with contractors in tow -- is to determine the feasibility and cost of the project(s) being contemplated (as a listing agent, I encourage this process -- to a point; much better to have no deal than one that blows up after lots of time wasted on negotiation).

Eyes on the Prize

At the end of the day, though, most home Sellers (properly) are more focused on whether the Buyer is able to perform financially, and what price they're getting for their home.

There can even be offsetting advantages when the Seller knows that the Buyer intends to do a major renovation (or more).

So, a home that might otherwise get picked apart on inspection instead can get a "pass."

There can be exceptions to that, though.

I handled one deal, the sale of a 19th century Victorian, that almost fell apart when it became apparent that the Buyer planned to do a tear-down.

The issue?

Both the owner and the Buyer wanted the home's gorgeous (and quite valuable) leaded glass windows.

Who Do You Call First?

Done Deal! Then What?

It's 9 p.m., and you've just agreed to terms with the Seller you've been negotiating with to buy their home.

You initialled the last change on the Counter Offer form, and faxed it to your Realtor.

Who do you call/tell first?

A. Your parents, to tell them the good news!

B. Your best friend, to let them know you're moving.

C. Your kids, to let them know.

D. Your home inspector.

Answer: D

That's especially the case in late April, probably the most active time of the year for purchasing a home even without the tax credit expiring in 8 days.

The home inspectors I work with most frequently are working 12-plus hours a day now, seven days a week, and returning my phone calls at 8 p.m. (or later).

With that in mind, it might be a good idea to: a) lengthen the time allowed for an inspection in the Inspection Contingency; and b) consider using an inspection company that has multiple inspectors on its staff.

P.S.: And yes, I've told clients to call home inspectors (or leave a message) at 9:30 p.m.

Sellers' Motivation: Is it Relevant?

Does it Matter Why They're Selling?

Exquisite home available only due to job transfer.

--Generic blurb on MLS

Does it matter why someone's selling their home?

Prospective Buyers certainly seem to think so; seasoned Realtors, not so much.

Here are three reasons why Realtors place much less emphasis on Seller motivation than the general public.

One. The only time you're going to know the Seller's motivation is if it serves their interests to tell you.

Divulging a job transfer can certainly make sense, especially if the owner has only been in the home a short time.

Otherwise, the Seller's "(bottom line) price, terms, and motivation" are strictly off-limits, as every Realtor has drilled into them.

The rest of the time, you're likely to hear variants of, "the Seller needs a bigger/smaller/different home" -- sort of like the coroner citing "decedent stopped breathing" as the cause of death: literally true, but meaningless.

Two. Duty to Disclose, etc.

If the Seller is moving because their home is near a toxic waste dump, sits atop an earthquake fault line, or holds some other dark secret, you'd certainly want to know.

And you would.

There would likely be multiple news accounts documenting any environmental or neighborhood issue(s). Plus, the Sellers themselves have a legal duty, at least in Minnesota, to disclose any material facts affecting their home's condition.

Even if you lived in a bubble, hopefully your Realtor doesn't, and they would alert you.

Prospective buyers also can -- and should -- avail themselves of publicly available police reports, utility bills, etc.

I even advocate knocking on neighbors' doors (during daylight hours!), debriefing mailmen, etc.

Three. The home's condition and price speak for themselves.

A good Realtor who knows the neighborhood and overall market can quickly determine if a given home is well-priced, in good condition, etc.

By the second (or third) showing, prospective Buyers likely know, too.

Just to make sure, every Buyer should expect to pay an experienced home inspector $300-$400 to carefully evaluate the home for them (call that "trust but verify").

Trust But Verify

So, how can you tell when a Seller isn't motivated? (And their home is usually overpriced, to boot)

The listing is larded with language like "priced to sell," "make an offer," "Hurry! Don't miss your chance," etc.

Often times, when you see such listings, you pull their history and discover that they've been on the market . . . since 1998!

P.S.: one of my favorite New Yorker cartoons shows a father and son in front of a storefront plastered with signs reading "Liquidation sale!" "90% off everything!" "Must sacrifice," etc.

The caption: 'some day, son, this will all be yours.'

Bank Foreclosure "Gotcha's" :)

"Inspect All You Want" (They Said)

Welcome to the Hotel California
Such a lovely place, such a lovely face
They livin' it up at the Hotel California
What a nice surprise (what a nice surprise) bring your alibis

Mirrors on the ceiling, the pink champagne on ice
And she said we are all just prisoners here of our own device
And in the master's chambers, they gathered for the feast
They stab it with their steely knives but they just can't kill the
beast

Last thing I remember I was running for the door
I had to find the passage back to the place I was before
Relax said the nightman We are programmed to receive
You can check out anytime you like but you can never leave

--"Hotel California" lyrics; The Eagles

While it's still fresh, I thought I'd start a collection of favorite "gotcha" clauses in bank foreclosure contracts that I've run into recently.

Actually, "gotcha" would suggest purposeful intention; what often seems to be going on is that . . . no one's home -- in every sense of the word.

Examples:

--One size fits all. Once upon a time, Target sold mittens in its Southern California stores. Today, lenders with foreclosures in Florida -- where defective Chinese dry wall has been a big problem -- are requiring disclaimer language in Minnesota, where no one has heard of the issue.

--"Inspect all you want." Another bank included an Inspection Contingency that looked like the standard Minnesota form up until the last sentence; that's where the Buyer waived its right to back out of the deal, regardless of what the inspection revealed.

Ummm . . . that would be the whole point of the inspection, especially one that turns up major issues that the bank won't address because it's selling the property "As Is."

Even if the property is being sold "As Is" -- make that, especially when the property is being sold "As Is," with no disclosures -- Buyers want to inspect to determine the property's true condition.

--The Bank can get out, for any reason. The flip side of locking the Buyer in is letting the bank out.

Another bank contract included a clause on the last line of a 28 page contract allowing the bank to cancel the deal, at any time, for any reason.

Such a contract really isn't a contract, it's more accurately a "memorandum of understanding."

By contrast, a contract imposes reciprocal rights and obligations, and is binding upon the parties.

--Bank language supersedes Buyer's language.

Every bank deal I've seen so far (more than two dozen) starts with the bank tossing out the standard Minnesota real estate forms, and substituting its own custom, undefined contractual language.

Typically, the first sentence of the bank's substitute forms states that the "bank's forms supersede the Buyer's, and wherever there's a conflict, the bank's forms govern."

So, not only are the bank's contracts often full of ambiguous, undefined language -- they trump the standard Minnesota contracts where there's a conflict.

--"Knock Yourself Out" Inspection clauses. Another variant of the "modified" Inspection clause I've seen allows the Buyer to inspect, but makes them responsible for de-winterizing the property, re-winterizing the property, and paying for any damage that doing so causes.

So, theoretically, a Buyer could arrange to have the water turned on, have the place flood because the pipes are busted . . . then be liable for the damage! (even though they decide not to buy the home).

Bottom line(s): a) foreclosures aren't for novices; and b) the price had better be attractive enough to compensate for all the foregoing risks and hassles.

Are Municipal Inspections a Waste of Time?

Inconsistent Provisions, Fees, Enforcement:
A-Not-So Necessary Evil

Until recently, I've always defended municipal point-of-sale inspections -- required by 14 municipalities locally, including Minneapolis, St. Paul, Bloomington, and St. Louis Park -- as a well-intentioned (if annoying and occasionally, expensive) hurdle for home Sellers.

Typically, so-called Time of Sale Inspections focus on safety-related concerns such as the working condition (or not) of the heating system; basic electric features (GFI's in Kitchens and Bathrooms); and plumbing (for example, back-flow preventers).

However, after seeing all the various inconsistencies and loopholes over the years, I've come to the conclusion that their costs don't justify their benefits.

Here are the five reasons why:

One. Buyer's inspections cover the same ground much more thoroughly.

Once upon a time, a Buyer's inspection was considered optional.

Not anymore.

In the nine years I've been selling real estate, I've never represented a Buyer who declined to do an inspection -- nor would I ever recommend it.

Even if a home was selling in multiple offers -- not so common these days -- I still wouldn't recommend waiving the inspection, as some especially eager Buyers have been known to do.

On a scale of 1-10, a good Buyer's inspection is a "9" or "10," typically taking 3-4 hours and costing $300-$400, depending on the size house.

The city inspection?

I'd rate even the best ones as no higher than "2" on that same scale -- and have seen them performed in less than 30 minutes (even though they can cost north of $200).

Two. Dubious logic.

By definition, point-of-sale inspections kick in . . . only when title changes hands.

So, Golden Valley wants to know that, prior to sale, each home's sewer connection to the municipal system meets minimum standards.

However, if that's such an urgent priority, Golden Valley should implement that requirement city-wide, immediately, not just require it as a condition of a home sale.

After all, most Golden Valley homes don't change hands in any given year -- and some don't sell for decades.

How is such spotty enforcement furthering the city's goals?

Expensive & Redundant

Three. Inconsistent Provisions, Fees, Enforcement.

Some cities have their own inspectors (St. Louis Park, Bloomington); others outsource their inspections (Minneapolis, St. Paul, Maplewood).

Of the latter, the primary qualification to become a "certified city inspector" -- as best I can tell -- is to fill in a form and pay a fee.

While each city's approved list of certified inspectors contain many experienced, reputable inspectors . . . I've certainly encountered my share of incompetent inspectors.

In fact, one of my first listings (representing the Seller) involved a Minneapolis home that had just gotten a clean "point of sale" inspection.

Unfortunately, the deal collapsed when the Buyer's inspection revealed -- with lots of documenting photos -- that my client's roof was clearly past its useful life.

My client ultimately put on a new roof (and, I believe, was genuinely unaware how bad the existing roof was) . . . but by then the Buyer had walked.

Less egregiously, I've seen homes blocks apart in the same city undergo city inspections within weeks of each other, and one will get written up for plumbing and electrical violations, while the other -- in worse condition -- gets a pass.

Four. Confusing compliance.

In some cities, home owners must correct any "repair or replace" ("R&R's") items before the home can be offered for sale (Minneapolis); in others, the items must be corrected prior to closing (St. Louis Park).

If the homeowner can't or won't address the R&R items, cities typically allow responsibility to be transferred to the Buyer.

However, the protocol for doing so -- paperwork, escrow provisions, post-sale timetable for correction -- vary widely.

Finally, at least one city (Maplewood) requires a point-of-sale inspection . . . and nothing more: there's no requirement that anyone fix anything, before or after the closing, let alone a reinspection requirement (which most cities require).

I suppose this state of affairs is more agreeable to homeowners, but then what's the point?

Five. Potential to Mislead Buyers.

At least some unsophisticated Buyers, when they learn that the home has passed the city inspection, erroneously conclude that it's in good condition.

For all the reasons discussed above, that conclusion is most definitely not warranted.

Ultimately, at least in my opinion, there's scant evidence that municipal point-of-sale inspections help to ensure that the city's housing stock meets minimum standards.

After all, some of the local cities with the best housing stock (Edina, Wayzata, Minnetonka, Plymouth, etc.) don't have them.

"As Is" Misconceptions

No Free Lunch

Selling "As Is" is a popular choice for banks, estates and other third parties who don't know the condition of a property (because they haven't lived in it), and don't want to be responsible for any repairs.

Occasionally, however, "owner-occupant" sellers -- especially ones with deferred maintenance -- view selling "as is" as a panacea for making costly repairs.

Yes and no.

Yes, in the sense that they can certainly avoid having to do the repairs themselves.

No, in the sense that they'll pay a steep price for having the Buyer assume responsibility for whatever needs to be fixed.

No Shortcuts

Perhaps the biggest misconception is that selling "as is" avoids a Buyer's inspection.

Wrong.

Buyers who agree to buy "as is" still want to know what they're buying, which typically means doing a very thorough inspection.

The second misconception is that selling "as is" will net sellers more money.

Wrong again.

For every $1 in repairs that Buyers assume, they'll typically deduct $2 or even $3 from their offering price.

That's not just because of the time and inconvenience, but to cover the risk that the necessary repairs will be more extensive than appears. In fact, especially when the issue involves (hidden) plumbing, wiring, and any related contractor permits, such "padding" is often warranted.

To avoid such "3-for-1" discounts, Sellers -- at least ones who can afford to -- are often well-advised to tackle the repairs themselves.

P.S.: I remember taking a class in college "pass/fail," only to find out that my grade would have been a "B+." Selling a home in good condition "as is" is like that.

"To See, or Not to See?" (that is the question)

"Sold, Subject to Inspection" -- Explained

Upper bracket Twin Cities homes may not be moving quickly (if at all), but the pace of sales for more affordable housing -- say, under $300k -- is surprisingly brisk.

Accordingly, more would-be Buyers are being told that the home that they just asked to see is already "sold, subject to inspection," even though its status on MLS is still showing "active." (There's actually a further refinement to that status -- namely, either "good to show" or "no more showings." By definition, if the latter status applies, there's nothing for other, would-be Buyers and their Realtors to discuss.)

What does that mean? And what should prospective Buyers do with that information?

"Sold, subject to inspection" means that there's already an accepted offer on the home, but that the Buyer hasn't removed the Inspection Contingency yet. Until that happens, other Buyers are welcome to view the home (assuming the contract between the Buyer and Seller provides for that).

Which prompts the next question: should other Buyers still bother looking?

"To See, Or Not to See" (That is the Question)

Standard Realtor advice is "no." The reason is that the vast majority of the time (say, 85%-plus), inspections don't scuttle deals.

That's so either because inspections don't reveal any major issues, or, if they do, the Buyer and Seller are able to successfully negotiate them.

Per Minnesota law, a Seller who learns about a material defect in the course of a Buyer's inspection is obliged to update their disclosure. So, the choice they're confronted with is, reduce the sales price an appropriate amount now, with this Buyer -- or take a similar discount with any future Buyer.

Alternatively, the Seller can elect to fix the problem themselves, then put the house back on the market.

Either way, the cost of the repairs comes effectively comes out of their pocket.

Not surprisingly, most Sellers in this situation opt to "take their lumps" now, vs. later.

Inspection Blow-Ups

So what about the other 15%?

Three types of situations account for most of the "inspection blow-up's."

First, the inspection reveals a major issue, and the Buyer and Seller can't come to terms about an appropriate discount.

Given that there are standard price ranges for things like roofs, furnaces, radon remediation, etc., there's really no reason for that to happen if both sides are negotiating in good faith.

Second, the Buyer and Seller disagree about whether there is a material defect.

Fortunately, most home issues are objective rather than subjective in nature: the roof leaks or it doesn't, the heat exchanger in the furnace is cracked or it isn't, etc. Usually, bringing in qualified third parties -- typically, knowledgeable contractors -- can get Buyers and Sellers past this impasse.

The third type of inspection failure is when the inspection is such a disaster that the would-be Buyer isn't interested in negotiating a discount (however sizable).

More than most consumer purchases, for many people, a home purchase is especially emotional.

A disastrous inspection can cause the Buyer to "fall out of love" with a home.

When that happens, often times no amount of "rational" inducements (read, financial) can un-do the damage, and the best course of action is to simply move on.

Homes as Meth Labs

Balancing Home Disclosure Goals

Today's New York Times has a tragic story detailing the various health (and financial) calamities that befell one Tennessee family after they unwittingly bought a home that had formerly been used as a meth lab.

As recent Minnesota home buyers and sellers can attest, Minnesota requires Sellers to disclose whether their home had ever been used to make meth.

While my general stance is, "the more disclosure, the better," the meth disclosure seems questionable, for three reasons.

One. If you turned your home into a meth lab . . . . you're probably going to lie about it (and many, many other things) on the Seller's disclosure.

That's why Buyers should never waive having their own *inspector check out the home they're negotiating to buy.

Two. Little chance of financial recovery.

If a home Seller lied about a material defect -- and the Buyer can prove it -- they have grounds for a lawsuit. The ultimate goal of such a suit would be a claim for damages, or some other judgment against the Seller.

Meth lab proprietors typically don't have assets. Nor do they have homes (any more). They're usually what lawyers call "judgment proof."

So sticking them with liability for remediating meth contamination isn't going to do anything for the Buyer.

Picking Your Battles

Three. A very small sliver of the nation's housing stock is afflicted with meth-related contamination -- less than .02% of the nation's single family homes, or 2 in 1,000.

Even that number arguably exaggerates the risk. According to the article, the problem is concentrated in the South and West, and even there, is primarily in rural areas (it's hard to have a clandestine meth lab in an apartment building).

Given the horrific consequences of meth exposure, even a minute risk might warrant making the real estate buying public aware.

However, that goal needs to be balanced against another, practical consideration that's as or more important.

Namely, if you make the Seller's disclosure sufficiently long -- which is probably already the case -- no one will pay attention to any of it.

*As part of a home buyer's inspection, I always recommend talking to at least one neighbor to get the "scoop" on the house, block, etc. In the NYT article, the home's meth lab status apparently was known to the entire neighborhood.

Mountains, Molehills & Buyer's Inspections

Hoist by Their Inspector's Petard

Smart home buyers carefully inspect the home they're about to buy to make sure that it's in the condition they (and the Seller) think it is.

Perhaps counter-intuitively, a thorough inspection isn't just in the Buyer's interest, it's in the Seller's, too.

I remember one deal where, almost exactly *two years after closing, the Buyers asked my Sellers to replace several windows that had rotted. They contended that the problem existed at the time they bought the house, and therefore my clients were liable.

Unfortunately for the Buyer, the very detailed inspection report they had done before they bought omitted any mention of window issues.

Which was significant, because the same inspection did turn up a few small -- dare I say picky -- items, which the Buyer and Seller were able to negotiate (which was how my client came by the report).

If the Buyer's own inspector takes the Seller's side . . . the Buyers don't have much of a case.

In fact, my client was adamant that the windows were in good condition when they sold, and had said so in their Seller's Disclosure (my client and I speculated that the problem resulted from a humidifier that the Buyer installed, which created condensation on the windows in winter.)

Mountains and Molehill's

Do Buyers ever make a proverbial "mountain out of a molehill?"

Occasionally.

Fortunately, though, most inspection issues are objective and factual in nature.

So, the roof either leaks or it doesn't, the heat exchanger in the boiler is either cracked or it isn't, etc.

Once it's beyond dispute that there's a genuine problem, a few contractor quotes usually serve to establish a price range for repairs.

At that point, most Buyers and Sellers acting in good faith can reach a resolution.

*Coincidentally -- or not -- the period for bringing claims against a Seller is two years.

Cautionary Inspection Story

Foreclosure Minefield #37

At a lunchtime training class today, the presenter -- a very seasoned appraiser -- relayed a story I'd never heard before in connection with foreclosures (and I've now heard -- and seen -- plenty).

When the appraiser arrived at the house, the water was turned off -- a common occurrence with foreclosures in Minnesota. So, the appraiser turned it on (a big no-no, for liability reasons), and proceeded to open a few faucets. So far, so good: no leaks.

End of story, right? Hardly.

After closing, the Buyer turned on the water again and immediately discovered water everywhere, coming from literally dozens of leaks.

The explanation?

A home's plumbing system has to be at full pressure to be fully tested -- a process that can take hours, depending on the size of the home. Simply running water through the system, briefly, won't necessarily reveal leaky pipes . . .

Closing Deals in a Soft Market: Understanding Buyer Psychology

What’s the difference between a good real estate agent and a great one? A good agent thinks that their job is to attract a well-qualified buyer willing to pay the seller’s asking price. A great agent thinks their job is to find . . . three or four of those buyers.

Especially in a buyer’s market like the current one, the difference is crucial, for four reasons.

One. Leverage. A seller negotiating with a solitary buyer doesn’t have any leverage: if the seller doesn’t like the buyer’s offer and can’t get them to raise it, their only other choice is to wait. In the meantime, the seller must pay the mortgage, property taxes, insurance, utilities, and maintenance. In a weakening market, waiting also means anticipating new listings that compete with their home, hoping interest rates don’t rise, etc.

Two. Motivation. Buyer’s markets are characterized not just by a scarcity of buyers relative to sellers, but by unmotivated, even spoiled buyers who lack any sense of urgency. The same sense of anticipation that grinds down sellers and fills them with angst has the opposite effect on buyers: their attitude is, "there will be even better choices tomorrow than today, at even lower prices, so why rush?"

Often, the only thing that can counter that psychology is the appearance of a second buyer interested in the same home. In fact, multiple offers in buyers’ markets (yes, they still happen) often start out with several buyers noncommittally circling a property. Then, once one "fence-sitter" jumps, they all do.

Why? Because suddenly the time horizon for buying a given home is no longer infinite, but very finite. And if someone else wants the home the buyer is interested in -- out of all the dozens that are available -- maybe there really is something unique and appealing about it, validating their own judgment.

Three. Follow-Through. Great agents know that there are many, many steps between a would-be buyer submitting an offer, and consummating a deal with that buyer at closing. Buyers who don’t hear footsteps drive hard bargains. They make low offers that they raise slowly, if at all; put down little earnest money; and ask for steep discounts for any issues identified during the inspection.

By contrast, buyers who know they have competition try not to rock the boat. They overlook inspection issues, and are careful not to do anything to drive the seller into the arms of another suitor.

Four. Deal Insurance. Great agents know that even solid-looking deals can derail. The parties may not be able to resolve a major inspection issue; or, the buyer’s financing may fall through. Even when a buyer receives a firm financing commitment, if they lose their job or suffer a financial setback, the lender may still back out.

That’s why great agents keep the pressure on, aggressively marketing a property until the buyer’s inspection contingency is removed. Identifying backup buyers in advance not only minimizes the fallout from a broken deal, it actually reduces the risk of that happening, by lessening the buyer’s willingness to test a deal to the breaking point.