Browsing through the MLS, I have run into listings that appear to be by FSBO (For sale by owner) who contacted services that will put their listings on the MLS but do nothing more.
Here's the confidential remark for the listing:Â "Listing broker does NOT represent the seller." That is one HUGE challenge, to essentially represent both parties during escrow.
Which prompted me to reiterate -- for the benefit of both the seller and the buyer...
What could possibly go wrong during escrow?
day before close of escrow, one party refuses to allow transaction to
proceed due to unfulfilled commitment (I know of a million dollar sale
that was delayed because the seller didnâ€™t deliver, per prior agreement,
Â a permit signed off/approved by the city bulding inspector)
had done work on the property --- expansion, remodeling --- without
permits. Someone files a complaint, and the city's Code Enforcement
group mandates that permits are pulled, work is inspected, work re-done
(or even removed)Â if necessary,Â fines are paid before close of
escrow.Â Buyers are unwilling to shoulder that responsibility and backs
Seller did not complete agreed-upon compliance with local ordinances (such as sewer lateral test/replacement, automatic gas cut off valve installation where applicable).
Seller was discovered to not have legal authorization to sell the property
Mechanics liens are still on record against the property
Other parties, such as heirs, file suit to halt the sale
suffers a calamity --- fire, burglary, hurricane, etc --- during escrow
period and could not be delivered in the same condition as when the
buyer wrote the offer
Buyer does not qualify for the loan
Buyer loses job or is unexpectedly relocated.
Property does not appraise for the price that the buyer has offered
doesn't complete loan process on time, or has more conditions to
resolve before approving loan. For example, an FHA loan appraiser may
identify Section 1 items that need to be cleared.
Buyer does not clear his contingencies in time. And even when the seller issues Notice to Perform, buyer does not comply
repair issues are identified during inspections. Â Buyer requests
credits/repairs or price reduction. Seller refuses. Negotiation breaks
Buyer does not deposit earnest money into an escrow account in spite of constant follow ups
Cancellation of contract is instituted, but one party refuses to sign or to allow deposit to be returned to buyer
Buyer's own house was under contract -- but HIS buyer backs out and cancels that sale
Buyer or Seller gets cold feet and wants to cancel agreement
One of the parties to the agreement gets deathly ill...and sometimes, somebody passes away
And of course, there are the other myriad challenges with other types of sales like short sales. And thatâ€™s another whole book!
Indeed, what are the various events that could possibly derail a transaction?