August 8, 2009: How real estate transactions can fall apart -- and how Realtors work to keep the parties together
For a Realtor working with home-buyers, there are three times where a transaction has a high likelihood of falling apart.
The first is during the initial contract negotiations, of course. Buyers and sellers can go through a lot of haggling by counter-offers before they reach a meeting of the minds. And with so much competition for low-priced houses right now, it's very easy for buyers to dicker themselves right out of a deal.
The second opportunity for a deal to fall apart is during the inspection process and the subsequent repair negotiations. My stock argument to sellers is pretty simple: If you don't fix it before the buyers move in, they will have to fix it before they move out. If we're paying full price or something close to it, we deserve to buy a property in turn-key condition.
To complicate matters, FHA and VA loans require that homes be in habitable condition. But lender-owned homes are sold "as-is," as are most short sales. And even sellers with equity may not be able to afford to undertake needed repairs.
Perhaps surprisingly, the third time when a home sale is at risk of falling apart is at the very last minute, when the Realtors, the lender and the title company are all working full-blast to close the transaction.
It is at this final stage of the process that seemingly insuperable obstacles arise: The lender blocks funding over some previously unobjectionable contract language. The seller has turned off the utilities before the final walk-through. One or more parties get cold feet so bad they are frozen stiff.
Add to all this the outrageous emotional stress that goes along with such a huge, life-altering change. The smallest disruption can set people off when they're this tightly strung.
But as crazy as things might get, the buyers still want to buy and the sellers still want to sell. It is the job of the Realtors to hold the transaction together when it seems as if every force of nature is conspiring to tear things apart.
Greg Swann is the designated broker for BloodhoundRealty.com, a full-service Metropolitan Phoenix real estate brokerage. This article originally appeared in the West Valley regional sections of the Arizona Republic.
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