Today’s real estate landscape has never been more challenging when it comes to closing deals. Mortgage rates are at 20-year highs, marked by tight inventory, insurance hurdles and inflation. According to data compiled by Redfin, 15.7% of homes that went into contract in August 2023 fell through. This hurts your seller and can dramatically affect the perception of the property’s value. Regardless of how you frame it, there is often a perceived blight on the property when it suddenly shows “back on market.” Following are ways to prevent your deals from falling through:
GET OUT AHEAD OF IT
With transactions already down 30-60% this year, and price reductions rampant in certain areas, the most important thing you can do as an agent is to limit surprises. This means getting all inspections done prior to your listing going live. Make sure the home inspection, pest inspection and other inspections like well and septic, if applicable, are done at the beginning. And, in catastrophe-prone areas like California, Florida and Louisiana, include the latest home insurance quote so that buyers are well aware of what to expect when they get into contract. It’s impossible to get financing on something that can’t be insured. And it’s impossible to afford a property when home insurance is prohibitively expensive. Limiting surprises will keep your deals from falling through. It also lends reassurance to buyers that there is nothing to hide about the property. Today’s buyer is more skittish than ever, which is no surprise considering the market we are all dealing with.
MANAGE SELLER EXPECTATIONS
Many sellers compare their house to one that’s recently sold in their neighborhood. But they often fail to acknowledge the critical difference in condition. Make sure you and your seller work together to price the home correctly according to its condition. Even though a house down the street sold at a high price, that doesn’t automatically mean yours will too. Likely the house a few doors down was impeccably maintained, staged and had luxury features that appealed to a broader buyer base. Make sure your seller understands these differences, and prices accordingly. Otherwise it could be a long wait marked by successive price reductions. This is definitely something nobody wants. The old rule of thumb still holds true today: houses priced right sell fast.
PROTECT AGAINST SURPRISE EXPENSES
Go into your listing pitch offering a seller’s home warranty. This can help you get the listing and protects your seller from unexpected expenses while the home is listed. A seller’s home warranty is usually transferable to the buyers. This also adds extra incentive to buyers. This is a win-win and both sellers and buyers are reassured knowing there is protection from unforeseen repair expenses like heating, air conditioning, plumbing, electrical, appliances and more. Home warranties also offer many options to choose from that can be customized to fit the home in question.
EDUCATE BUYERS
As mentioned earlier, buyers are skittish and for good reason. Help your buyers remember price appreciation. Buying a home can be one of the best ways to build wealth. It also satisfies the need to have a home to live and build memories in. Real estate, over time, almost always results in appreciation and equity. It can also offer tax benefits. Buying now at the right price in spite of historically high interest rates can give buyers future gains if they can swing it. They can always refinance later for a better interest rate and look forward to a lower monthly mortgage in the future. (And make sure you share these clever ways your buyers can lower the interest rate.) Sadly, buyers who are backing out of deals due to cold feet could be missing an opportunity that a month or year from now will cost more. Remind your buyers to weather the storm now to reap the rewards later. This is especially true if the home is priced right and in the desired area.
HAVE A PLAN B
Which means, romance your back-up offers. Solicit quality back-up offers, and know that your deal may depend on back-ups. If you’re lucky enough to get a back-up or two, make sure you stay in touch with those folks and keep your finger on the pulse. Then if your deal falls through you have a ready and able back-up offer to save the day.