CREATING A HOSTILE BUYER
Sometimes I can have the best plan in the world and think that I’m “all that” with my magazine, open house program, cross-marketing, and “Showing with Purpose” plan—and then along comes simple timing. I put the sign in the yard, and the next day I have a buyer with a full price offer. It either had NOTHING to do with any of my planning or programs, or the sale had EVERYTHING to do with my planning and programs. Occasionally, you just catch it at the right time. This is not a common occurrence in a higher price point; but it does happen enough to merit discussion. My clients feel like they just paid a commission for nothing. Well, let me share with you, these quick contracts have been some of my most complicated and difficult transactions. In fact, of them never make it to the closing table.
How can it be that a full price contract in the first week on the market does not close?
Let’s back up to before the house even goes on the market. Sometimes people have had an eye on a particular home in a neighborhood for years; they have been covertly circling the area just waiting for the home to come on the market. Sometimes a Buyer has been looking for months, trying to make a decision, and all of a sudden their personal deadline arrives. They take the next home that fits their criteria, and lucky you, it happens to be yours. Perhaps the Buyer waited too long to make an offer on the last home they liked and lost it. Whatever the reason, the sign went up and the contract came in.
When a house sells, the Buyers are excited. They have plans for their new future and ideas for their new home. The last thing that we want to do is steal their excitement.
You, the Seller, had a strong offer come in within the first week of being on the market and this starts to weigh on you. “Did the Listing Agent price it too low? Is my home more awesome than I thought it was? Should I even move at all?” All of these questions will go through your mind, and your Agent will answer each one logically and with the facts. I know that people might second-guess themselves. The final decision to sell is yours. However, if you decide to proceed with the offer, do not allow these questions to taint your future actions and turn these sincere new prospects into hostile Buyers.
Remember, your Buyers have only been in the home one or two times for thirty minutes, and they are excited to get back in now that their offer has been accepted.
This excitement for your home is one of the reasons you got a great offer to begin with. Instead of being accommodating to get them back in as quickly as possible, you decide to be difficult. You start to take them for granted and believe that another good offer will be just around the corner should something happen to these Buyers. They don’t really deserve your great home for the price they offered anyway. You make it difficult to schedule a second showing around your maid service, visiting in-laws, and children home from school.
The Buyer is not your enemy.
People sell homes for all different reasons; upgrading, rightsizing, corporate relocation, divorce, new marriage and school district. Whatever your reason may be, the Buyer is the person who is going to allow you to continue with your plans. Being difficult is not in your best interest.
Now it is time for inspections.
A savvy Buyer will hire a small army of inspectors. These inspectors are going to open cabinets, climb in your attic, move the mower out of the way to get to the electrical panel, and water spot the sinks and mirrors as they test the faucets. Pink insulation will fall onto the carpet from the attic stairs and a few branches might be stepped on when they walk the perimeter checking the foundation. It is okay when you call to complain to me. I know all of these things before they even happen. Hopefully, the inspector will remember to relight the water heater and return the thermostat back to its original temperature.
I can also guarantee these inspections will take far longer than you anticipate, and the four-hour window you allotted will stretch to five or six hours. They may need to come back the next day to finish up. The Buyer and their Agent may or may not be with the inspectors the whole time. They might pop in and out to check on the status. They will certainly come for the last thirty to forty-five minutes to debrief with the main inspector. Although it is inconvenient, plan to spend the entire day away from your home. Remember that this is the Buyer’s time. They will probably invite their children, best friend, and mother-in-law over to approve their purchase. Yes, they will sit at your kitchen table and might even order pizza (and leave crumbs!). Ms. Seller. . . this is okay! We want the new Buyer to make themselves at home. You, on the other hand, will have a very uncomfortable day, wondering what the inspection reports will say.
Here is a newsflash: No matter how well maintained and pristine your home is, the inspectors are going to find several issues.
When we receive the report, it is important to remember that this is not an attack on you or your home. It is simply the new Buyer trying to insure he purchases a fully functioning property. If the upstairs air conditioner needs to be serviced and the wood windows have rotted trim that needs to be replaced, you are going to have to have these items repaired or give them an allowance to make these things right. You may not agree with everything on the list, and you are certainly within your rights to get your own experts and bids for a second opinion. Some of the items might even be superfluous, but important to the Buyer. The question you must ask yourself is, “Do I want to lose this offer for a few hundred or even a few thousand dollars worth of repairs?” If you refuse to repair the inspection items and wait for the next offer, you will still face another inspection and possibly some new items to deal with. What have you gained?
You need to remember that the Buyer who chooses to stay with a contract, after needed repairs have been refused by the Seller, will make the next few weeks to closing difficult at best.
Let’s say we have made it through the inspection process and you have agreed to make certain requested repairs. Although we are moving toward the home stretch, the game is not over yet. It is your responsibility to have the requested repairs managed and completed one hundred percent. You will need to keep accurate records and itemized receipts of all repairs along with comments from professional tradesmen. Some of the inspection items might be disputed by your servicemen. This is okay. The Buyer is most likely reasonable and will accept a professional HVAC company’s analysis that the Freon levels are fine. We just need to have proof and that service receipt!
One thing that I have to caution all homeowners in all price ranges against is:
DO NOT MAKE REPAIRS ON ITEMS THAT YOU ARE NOT QUALIFIED TO MAKE!!!
I understand that you are a handy “Tim-the-Tool-Man” type of guy and think that you can save a few hundred bucks by repairing those electrical items yourself. Please refrain. Not taking your repair list seriously will create a hostile Buyer and cost you more in the long run.
I had a $1.7 million dollar home that almost did not close because of caulk issues. My Seller was one of the nicest clients I have ever had the pleasure of working with. He was also very handy around the house. One of our inspection tasks was to re-grout/caulk around the loose stones and tiles around the pool. A professional would have charged five to six hundred dollars for this task. My Seller decided to do it himself. He thought he had matched the light tan/taupe color of the grout perfectly. It would have benefited him to seek help from the Home Depot specialist. But he made an error. The grout and caulk dried dark gray in the sunlight. He had also “overachieved” and “repaired” many cracks in the patio deck, stones, and retaining wall that were not even requested by the inspector. The final result was truly horrible with dark gray grout everywhere.
The Buyer started to second guess their buying decision, thinking that the almost $2,000,000 dollar home had not been properly maintained over the years by professionals. At the end of the day, the five hundred dollar repair ballooned to thousands to dig out and replace all of the grout and caulk errors. The Buyers demanded a large allowance a few days before closing because they felt that the rest of the inspection repairs might not have been properly completed.
The moral of the story is to allow professionals to handle inspection items that you are not qualified to do.
Most tradesmen will warranty their work for thirty to ninety days. If the Buyer has a quality issue with the repair, they can simply call the handyman back. (You will also want to carefully document your repairs and save your receipts with your closing documents for a few years after closing. This is simply smart business!)
Alright, we have made it through the offer, the inspection, and repairs. Are we finished yet? Almost.
Have a professional service that specializes in move-out cleans detail your home for the new Buyer. Your maid who comes every two weeks for the dust-and-mop routine is not sufficient. The home needs to be scrubbed from the baseboards up. Yes, this includes the top of the kitchen cabinets when you remove your greenery and ceramic rooster. It also includes detailing the oven and the refrigerator. Remember that your new Buyers will let all of the neighbors know how clean (or NOT clean!) you left your beloved home. Change burned out light bulbs, touch-up paint after the movers have taken down paintings, get the trash hauled by the city, have the lawn mowed and the pool serviced no more than three days before you deliver possession. Put all of the home’s manuals, receipts, garage door openers and keys in one location. Do not schedule utilities to be turned off on the exact closing date. . . what if the closing is delayed for some unforeseen reason for one week? Your pool will be a mess. I promise you will not die if you pay an extra day of electricity.
The home is sold. Why should you go through the effort and expense of this last paragraph? Simply because it is the right thing to do and You are a gracious person. We hope your new home is being prepared with the same care. It is amazing how quickly people will go from zero to ruthless under just a moderate amount of stress.
In the end, regardless of the emotional involvement, this is still a business transaction. You will achieve better results with a level head, grace, and understanding.
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