buyer due diligence
In my pending sales at the moment, it seems that many right now involve buyer due diligence. Yet another sign we are on the tail-end of the seller’s market. Normal transactions over the past 5 to 7 years have not really involved a lot of buyer due diligence. Seems buyers were so excited and thrilled to be given the opportunity to buy a home, they skimmed through the seller disclosures. They also waived inspections, sometimes submitting offers with an inspection contingency release upfront.
Not today. Nope, now buyers are very involved with buyer due diligence. As a seller, you want to give the buyer all the time the buyer needs to release contingencies. You never want to be accused of obstructing buyer due diligence, no siree. However, some of the questions we’ve received have been very detailed. So detailed an agent can’t tell if the buyer wants to move forward with the sale or if the buyer wrongly believes she needs a good reason to cancel.
During inspection periods, buyers can cancel without giving a reason. That’s a fact few buyers really understand. However, buyers have a responsibility to themselves to conduct every desired inspection and ask every pertinent question during their due diligence period. Agents cannot perform this task for them. They must do it themselves. They can cancel for any reason during the inspection period. The reason does need to be specific.
In fact, sometimes it is better not to give a reason. Without a reason, the seller will find it difficult to sue — not that the seller has a right to sue. People don’t always file lawsuits because they have a legal right. They file lawsuits often due to emotional misunderstandings. Rather than saying, let’s work this out, some people prefer to hastily blurt: I’ll see ya in court, buddy. But you already knew there are a lot of idiots in the world.
As a buyer’s agent, it is important to follow the estimated timeline of a transaction. Agents, line up all buyer inspections as early as possible. Because a general home inspection might suggest other inspections. Buyers, talk to your agent about those “other inspections” because it might be a case of a home inspector covering his or her own butt. Not necessarily a necessity.
Inspections are for the buyer to gain a thorough understanding of the condition of the home. It is not to renegotiate with the seller or ask for a credit. It is very rare in my listings that sellers ever get stuck with repairs, price reductions or credits. But I also know this is not true of other listing agents; many insist their sellers cave in just to “hold the deal together.”
Throughout our strong seller’s market in Sacramento, I have been pretty much a bull dog about no repairs. However, with the amount of buyer due diligence happening in our present market, I have a feeling the tide is changing on that, too.