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Buyers Backing Out, Advice

5,103 Views | 23 Replies | Last: 5 yr ago by Absolute
AggieIce
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AG
Our house is currently on the market and we've had two buyers drop out of contract during option.

First ones offered three days after our house hit market and well above asking. Negotiated some repairs and things were well for a few days. Hours before option expired they cancelled, the wife (who lives out of country and had never even toured the house) woke up that day and decided it wasn't the right place for her.

It happens, chalk it up to her not having been there and have some sort of bond with the property.

Next buyers offer some days after and have another inspection completed. Nothing out of the ordinary is uncovered. They requested us to fund visits from a structural engineer, plumber, electrician, HVAC pro, and irrigation specialist to double check on all of these and fix accordingly. We agreed to have an HVAC pro come out and our realtor had a foundation pro that they have worked with in the past come out to check the structure, and he gave us a "clean bill of health". The buyer's realtor insisted they send another out, and of course he suggested some additional piers installed (though not vital according to him). We offered cash at closing, but only about 75% of the Foundation work estimate their guy provided, and they cancelled the contract.

Am I being too hardball on this? What do I need to do in order to have my foundation truly inspected/cleared/repaired since we have two conflicting messages?

With two inspections that show no major Electrical/HVAC/Irrigation/Plumbing issues is it reasonable to reject the funding of a majority of these "visits" from professionals?

Located in DFW if that helps.
dubi
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Quote:

They requested us to fund visits from a structural engineer, plumber, electrician, HVAC pro, and irrigation specialist to double check on all of these and fix accordingly.
I didn't realize the seller paid for these inspections?
aggiepaintrain
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The seller never pays for inspections, your realtor should have told you that. Now you have to disclose those inspection reports when someone else makes an offer.

Your realtor sucks.
FJB
HomeFinderCody
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AG
As stated above, have them do their own inspections. If they come up with something that seems fishy, you can always bring in someone for a second opinion. Sounds like your agent is getting pushed around. One of the most important things we do as agents is deal with the other agent in a way that protects our client and his/her best interests.

Hard to give you advice on whether or not you are playing too much hardball without knowing many more specifics. You obviously have a home that shows well and is in a good area/price range with the quick offers.

You need to make sure your agent can effectively communicate at this point to potential buyers why you have had two fall through. Again, your agent can make/lose you a lot of money at this point with good communication skills.

Best of luck!
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jja79
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Should have skipped the Relatur, put a sign in the yard, baked some cookies, had an open house, gotten a huge offer, saved 6% and closed. Nothing to it. I read on Texags it's no brain science.

Seriously if you're asking the questions here you probably need a new Realtor.
AggieIce
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To clarify: we paid for neither inspection on the house.

We offered to pay for HVAC to come clean units and verify that they were operational, and cash at close for their foundation concerns.

Wouldn't these inspections need to be disclosed to future potential buyers anyways?
oldschool87
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Ummmmm it's called a deposit...

Nobody inspects anything till a deposit is made. Otherwise nobody is invested as you clearly see now.
Rustys-Beef-o-Reeno
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What kind of option fees are you accepting?
If it's that hot of market going over list I would ask for 500-1000 minimum option fee
Diggity
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I don't think the option fee would change much, besides getting a bit more if/when they walk.

A few hundred extra dollars isn't going to make someone move forward with a home they feel skittish about.
Rustys-Beef-o-Reeno
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Yes but you get rid of the people putting offers out with no skin in the game
Diggity
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I don't think you do. Unless you're going to ask for $5K or something crazy like that, it doesn't matter if your option fee is $200 or $500.
Rustys-Beef-o-Reeno
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$1000 should get people's attention

Diggity
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Maybe... And you would cut out a good chunk of solid buyers not willing to pay 4 times the typical option fee (depending on market and price range)

There's no great solution for this issue unfortunately.
Rustys-Beef-o-Reeno
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AG
If the house is moving quickly and above list price then asking for a substantial option fee should be doable.
Diggity
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It obviously depends on the situation. If there's multiple offers you could probably squeeze out a higher option fee.

At the end of the day, if the buyer gets scared off by something, even $1K isn't going to keep them from walking.
oldschool87
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AG
If your going to buy a house and I am taking it off the market. Your paying 10k down to hold it. If it does not pass inspection per the contract that money is refundable.

That money goes to the purchase price of the house. You can't just take someone's word...
jja79
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Have you sold a house lately? Who decides if it passes inspection? I don't see $10K earnest money being viable in most cases.
agsalaska
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oldschool87 said:

If your going to buy a house and I am taking it off the market. Your paying 10k down to hold it. If it does not pass inspection per the contract that money is refundable.

That money goes to the purchase price of the house. You can't just take someone's word...
Thats a great way not to sell a house.
The trouble with quotes on the internet is that you never know if they are genuine. -- Abraham Lincoln.
Win At Life
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oldschool87 said:

If your going to buy a house and I am taking it off the market. Your paying 10k down to hold it. If it does not pass inspection per the contract that money is refundable.

That money goes to the purchase price of the house. You can't just take someone's word...
I think you're confusing option fee with with earnest money.
YourFavAggie
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AG
All works out in the end
Eyes of texas Crying
oldschool87
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agsalaska said:

oldschool87 said:

If your going to buy a house and I am taking it off the market. Your paying 10k down to hold it. If it does not pass inspection per the contract that money is refundable.

That money goes to the purchase price of the house. You can't just take someone's word...
Thats a great way not to sell a house.
Well, actually it is. It's how it's done. You don't let someone take your house off the market, inspect, etc... without some type of down payment.

If you find a car you like, do you not leave a deposit?

Clearly this way is working...
Martin Q. Blank
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oldschool87 said:

agsalaska said:

oldschool87 said:

If your going to buy a house and I am taking it off the market. Your paying 10k down to hold it. If it does not pass inspection per the contract that money is refundable.

That money goes to the purchase price of the house. You can't just take someone's word...
Thats a great way not to sell a house.
Well, actually it is. It's how it's done. You don't let someone take your house off the market, inspect, etc... without some type of down payment.

If you find a car you like, do you not leave a deposit?

Clearly this way is working...
"some type of down payment" = $250 for 10 days

Not $10k
SteveBott
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I am not sure you understand the process. Regardless of deposit for an option period the buyer can cancel anytime free of charge during that time period. Remember they also put down an escrow check usually around 1% of the agreed price although keeping an escrow is difficult and not that effective.

And I have never put down a deposit on a car. If a seller wont take my word I would move on.
HomeFinderCody
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AG
Just to clarify for anyone reading this thread --

When you go under contract, as a buyer you write two checks:

1) Earnest Money -- this is your deposit which will be held in Escrow by the title company and credited to you at closing to go toward your funds needed to close. The amount is negotiable, but 1% of purchase price is a "norm".

2) Option Fee -- this is a fee you pay directly to the Seller for the right to have an unrestricted right to terminate the contract for a specified number of days. Amount and time period are negotiable. In the Dallas market you typically see a fee of $100-200, for a period of 7-10 days.

If Buyer elects to terminate during the Option Period, Seller keeps the option fee, but the Earnest Money is refunded to Buyer.

In competitive situations (multiple offers), Buyers will sometimes offer more of an Option Fee (maybe $500) for a shorter time period (maybe 5 days) to show that they are serious and have no intention of walking away over minor inspection items or other reasons like cold feet.

Even in a hyper Sellers market over the past few years, the most I've seen in Option Fee is $1,000 a few times.

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Absolute
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Basically the buyer walks for any reason they want in the option period. The market pretty much dictates that minimal option period price. As a seller you are basically held hostage whether you like it or not. Your only recourse, if the market will allow it is to make the option as short as reasonably possible.

Happened to me selling last year. Buyer used the option period as a buffer. Decided to withdraw on the last day, for reasons that had nothing to do with the house. Thankfully we did not give them the 14 days they asked for. Being off the market for a week did hurt us, but it worked out okay in the end.

Unfortunately, this is just the way the process works here. It is ridiculously skewed in the buyer's favor. Or at least feels that way as a seller.
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