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What to do when a buyer voids a contract?

What to do when a buyer voids a contract?

Hi!

It’s not an exciting day when the buyer changes his or her mind. It’s definitely part of the risk of selling a home and getting under contract that a buyer may decide for any reason to want out of a contract. As a seller working with a skilled listing agent, one can do a lot prior to going on the market, while accepting contracts and during the contract to close phase to help avoid a buyer backing out of a contract.

Save money. Have a strategy.

Save money. Have a strategy.

Even so, sometimes buyers do. This could be for a reason they find in a home inspection, for an unexpected health or family reason, loss of a job or any number of reasons. They might state their reason and ask out or they might void the contract during the home contingency phase, for example (As a side note, this is one reason to have a strategy to eliminate contingencies being in the contract in the first place. Like doing your own pre-listing inspection and making corrections, and then advising the buyer that this has been done.).

When the buyer wants out, and can do so contracturally, or you as a seller simply agree to let them out of the contract, what then?
Some options:
1) Put your home back on the market immediately with no changes whatsoever to the home or listing information available to the agents and the public.
2) Put your home back on the market after strategizing, having learned from one buyer / one part of a possible sale, making adjustments to the information.
3) Put back on the market after strategizing, having learned from one buyer / one part of a possible sale, making adjustments to the home itself and the information.

My experience is the 3rd option is usually the best approach.

First, without exception, it is always important to assess where the market has changed since the home went on the market and since the contract was ratified. Markets are always moving in one direction or the other, and can be very local (I refer to it as hyper-local.), very specific to the neighborhood, even. Take a strong look at “What is the market of the moment?” In order to be in sync, timely, with decision makings in formulating a strategy.

Selling Your Home Without Having It Returned to You

Selling Your Home Without Having It Returned to You

Then, if due to a home inspection, what was the reason for the back out? Did the buyers say they were anxious or unhappy about any items on it? If so, it would it behoove you as a seller to listen to what the buyers found and said about it, make corrections if it makes sense, and note any big ticket items as “replaced, new or improved” to buyers?

Another reason the buyer might back out is for a more desirable home down the street that has come on the market since the buyer went under contract with you. If so, would it be a great idea to take a very strong look at that home and how it compares to yours? What about it is more likable to buyers – price, condition, exact location? You may want to or need to adjust your pricing strategy if that home or any others help you to see the market of the moment in a clearer sense.

I hope this was helpful. With a great strategy going into selling a home – choosing an experienced, skilled listing agent, completely preparing your home for sale, having a smart pricing strategy, and creatively and strongly marketing your property, you will be a long way to a hedge against a buyer wanting to void a contract. An once of prevention…. “an investment of $100 could save you $1,000.”

Cheers,
Ken

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Buying a Simgle Family Home – 5 Key Things to Look for at a Home Inspection

Buying a Home – 5 Key Things to Look for at a Home Inspection

Hi!

I always recommend to buyers that they get a home inspection prior to purchasing a single family home, or any home. Eliminating surprises later is key to keeping down your costs of owning a home.

Note that you want to get a great home inspector and listen to them closely. What I tell you here is from my many years of experience of my buyers doing home inspections, only. My expertise is selling homes, not in home inspections; home inspectors are experts in home inspection. I can refer you to one, if that is helpful, as well.

Checklist from the Real Estate Inspection Report

Here are 5 key things to look for at a home inspection:

1. Roof – What is its approximate age / how much life does it have left? Replacing a roof is one of the most expensive items on a house. Are there any obvious exterior holes or wear that might let water get into the house? Are there any signs of water on the underside of the roof, inside the house, that might indicate water has gotten inside? Look in the attic if there is one and it is accessible.

2. Drainage from the house. Is the soil at the foundation tapered / graded away from the house to allow for drainage? Are the gutters in great condition with no leaks and are they free of debris, such as leaves and twigs? Are the downspouts in great condition and lead the water well away from the house’s foundation? A simple curve that might be 6 inches at the bottom of the downspouts is not enough. An extension should be added to that piece. You might see a splash block at the bottom instead of an extension. I do not consider this acceptable to do the work, especially in a heavy downpour – and our area gets them.

3. Mechanicals. How much life is left on the HVAC and hot water heater? Typically, 15 years has been considered their general life span. Replacing an HVAC system is fairly expensive; a hot water heater replacement is much less, though still spendy. Consider the total costs of replacing, including installation cost. It adds up.

4. Foundation. Is it in great condition? It supports the house. When in question, have a structural engineer take a look at it. I can refer you to a great one, if you need it.

5. Overall condition of the house. Does it appear that the owners (and past owners) have taken great, consistent care of it? Do the current owners have an “operating manual” for the house? Are there records? I recommend to my sellers that they supply to buyers any records, details and any warranties on items in the home.

I hope these 5 key things to look for at a home Inspection was helpful to you. Please let me know if you have any questions.

Cheers!

Ken

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A Q & A, every day: Why is a Home Inspection Important?

Why is a home inspection important to have on your new home – prior to purchase?

Think of it as a routine physical exam all of us should have as humans. Your home should have a check-up to determine its health. You can then ask the seller – depending on the terms of the contract – to tend to items that need attention, or do the work yourself after settlement. A well-cared for home will be a healthy home – and healthy for you!

Getting it SOLD – for YOU!
Ken & The Yes I Ken! Team

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