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elnikkinestal, Other/Just Looking in

Our house has fallen out of escrow officially 4 times. Is that heard of? When do we throw in the towel?

Asked by elnikkinestal, Tue Feb 12, 2008

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Multiple escrow fall outs happen. It is unfortunate but you must also learn from each one to see if you may need to throw in the towel. If each was because of loan issues, make certain the next one provides a pre-approval from more than 1 source. 1 should be a direct lender and the other from whomever they choose. If they already have direct lender approval, your agent may want to request an additional approval and may also want to verify the approval and conditions directly with the respective lenders.

Not a lending issue? Address the reasons for falling out on multiple occasions before continuing.

Without a reason why it has fallen out 4 times, no one will be able to provide better advice. Discuss the issue directly with your agent as they are surely frustrated as well.

Is it because you don't have an agent assisting you? An easy answer may lay ahead.

What were the issues surrounding this?
0 votes Thank Flag Link Tue Feb 12, 2008
It is hard not knowing what area of the country you are in, but clearly, you are going to contract too quickly. Try dating a little while before shacking up.

There are probably things that need to be done on both sides -- when your buyers present their offer, is it attached to real-life loan financing? Do they attach evidence of their ability to finance their down payment? Employment letters stating salary? Or are you just taking their word that they have money?

On your end, there may be something about the house that "pops up" a little late in the game. One way to deal with this is for you to pay for a pre-inspection report (I would recommend using someone from the National Association of Home Inspectors, http://www.nahi.org) so that the buyers have some idea of what they're getting. You and your broker should suggest that this report is no substitute for the buyers hiring their own home inspector, but it might ease some of whatever their concerns are.

Good luck!

Ali
---
Alison Rogers
author, "Diary of a Real Estate Rookie"
http://tinyurl.com/2ag28z
Web Reference: http://tinyurl.com/2ag28z
0 votes Thank Flag Link Tue Feb 12, 2008
Enikkinestal
I regret that I do not know your specific market or the details of your situation. With that disclaimer, here are some thoughts that may be helpful:
1. Buyers want the best value for their money. In a buyers market there are many homes for sale, but thanks to the credit crunch there are fewer buyers who qualify to buy, which reduces the supply of buyers further. In short, the buyers are calling the shots.
2. Most purchase contracts favor the buyer. Due to problems with sellers not being truthful in disclosing material facts about their property (meaning if the buyer knew about the fact, it would affect their decision to either purchase the property or the price that they would be willing to pay), there are a number of contigency clauses that are available.

In California there are 17 ways that a buyer can cancel, so it is not uncommon to have buyers change their mind if a disclosure concerns them. The best way to cure buyer's changing their mind is to disclose everything up front. You do not mention the reason that they buyers cancelled, however four does seem a little high...without knowing the circumstances of their cancellation.

If it were four buyers, one being unable to be approved for financing, one who lost his job, one whofound another home that he did not need to install new carpet, and the other one thinks that prices are going to fall and got cold feet,,,all these are similar but not the same.

My guess is that you may have a disclosure issue and if other homes, like yours, have sold during the time that yours has been on the market, then you might want to look at your strategy. For example, I often meet sellers that use a policy "let the buyer find out once we are in escrow". The problem with that is when a home is "in escrow" in most cases it is not "on the markiet" either, or certainly not as attractive.

For one, the MLS status usually will show Back Up Offers or Pending. When it falls out of escrow, it is BOM, or Back On The Market. Then you need to lower the priceagain, remarket, etc.

My preferred method is to disclose everything, make the property look at bad as possible, so when the buyer shows up, they say "Oh, it is much nicer than it looked". It would be better to re-market the property, lower the price at least five percent, and hope to get a couple of offers, you line them up with the first accepted offer, then back up #1, backup #2, etc.

The other important thing is to make sure that the buyers are qualified. A good Realtor has a conversation with the buyer's lender (or asks them to qualify with a lender that they respec) to verify that they are able to buyt the property.

Lastly, all inspections and disclosures performed in the past need to be disclosesd to all buyers. I would make a packet of ALL the disclosures available for the buyers BEFORE they make an offer. That way the buyer knows EVERYTHING before the make one.

I hope this helps. You might want to review your situation with your Realtor's broker.
0 votes Thank Flag Link Tue Feb 12, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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