buyers with cold feet
There are many listing agents in Sacramento who do not subscribe to the theory that there is always another buyer for that Sacramento home. That’s OK, that’s their practice. We’re all different. Those who do not believe that premise tend to be the agents who will do just about anything to make a sale, including, at times, throwing their seller under the bus. That’s my opinion, btw. Of course, if you ask those agents, they will disagree. But the truth is I close so many escrows, my life is not tied up in any ONE sale. I’m not gonna miss a mortgage payment or starve my cats to death if we have to find another buyer. There is always another buyer for that Sacramento home.
It’s a fact, Jack. Especially in this seller’s market. Often, agents plead with me to make the deal work. Code for push the seller into a detrimental situation. Not gonna do it. First, it is not a deal. It is a sale involving collective memories and emotional attachments created in a home, often in which a seller has lived for years, if not decades. Second, this is a financial transaction involving a willing seller and a willing buyer. Until the buyer turns not so willing.
The bad part about the practice of Sacramento real estate, and most everywhere else as well, is the fact the listing agent is not allowed to talk to the buyer. Can’t negotiate with the buyer nor directly influence. Their agent bears that responsibility. Further, we have many different types of buyer’s agents in Sacramento. Plus, no telling from where the buyer originated. Could have walked into an open house, an office or stumbled across the agent in Facebook. Not necessarily a person the agent even knows. Personally, I think many buyer’s agents do a bad job of explaining to their buyers the agent’s role. They are so worried about offending or risking the buyer’s loyalty that they often say nothing.
Unfortunately, those types of buyer’s agents are door openers. Paper pushers. Taxi drivers. People pleasers. Ineffective non-communicators.
Which means we get uninformed buyers — buyers without any kind of professional relationship with their agent — those are the ones you never know if they will close escrow. They will sign a purchase contract, but it can be meaningless to them. Agents? If the buyer asks you how she can cancel, that’s a red flag.
One thing I know for certain. If a buyer wants to cancel, the buyer will do it. Oh, the buyer might claim the home inspection revealed too many defects, but what home inspection doesn’t? Most homes have stuff wrong. Wait until the next one, buddy, I think. You think this home inspection is awful, just hang tight. Your next home might be worse. And all of the things the buyer freaked out over? Fairly certain our next buyer isn’t gonna give a damn.
Because there is always another buyer for that Sacramento home. Sometimes, buyers with cold feet drop out of buying a home all together. They quit. They remain renters. On the other hand, the sellers I represent will sell and close.
Such a relief that I am not on the receiving end anymore when a buyer freaks out, but I do feel the ramifications when it’s the buyer in my transaction with cold feet and it’s my seller who is affected. In this instance, it’s neither of those situations, which is why I can tell you what happened. Because it’s not my transaction. But it is a transaction that almost happened, then didn’t, then got yanked out of the fire and resurrected.
Say an agent has a home listed in Fair Oaks. Along comes a buyer, the offer is accepted and escrow is opened. Then the buyer’s appraisal comes in for less than list price, and the seller decides to let that buyer go along his or her merry little way. New buyer pops into the picture. Writes an offer agreeing to bridge any difference in appraised value, but whoa! The appraisal comes in not at the previous appraised price like expected but another $30K less.
To put this into more clarity, let’s reiterate with numbers. Let’s say, just theoretically speaking, that the first offer was $350K. The appraisal came in at $330K so the seller canceled. Then the new buyer agrees he will bridge the gap, pay the $20K difference in cash if it comes down to it and offers $350K. Except his new appraisal is $300K. To bridge THAT gap, it would cost the buyer $50K. Yikes. What do you do? Could be a potential situation in which a buyer freaks out.
The agent, being a creative genius, says let’s go with the first appraisal from the first buyer. She calls that lender for whom the appraisal was completed and switches her buyer to that lender. The lender pulls a bunch of rabbits out of hats and gets the loan approved for the second buyer in record time. Loan docs are delivered to escrow. Everybody is ready to sign.
What are the odds that the second buyer freaks out? Why would the buyer get cold feet? I guess nobody has the answer to those questions. The only thing everybody in this situation knows for certain is the second buyer has decided to cancel at the 11th hour.
There is only one thing an agent can do. Send the cancellation to the listing agent, along with an offer from a third buyer (in the wings) at $330K, and an approval letter from that lender who prepared the first appraisal, plus include a contingency release for inspections based on existing reports. You can’t stop an existing buyer from getting cold feet. You can’t talk the buyer out of canceling, nor should you. The buyer will learn soon enough he is not buying a house, no matter what.
What an agent can do is focus on the new buyer who suddenly has become an extremely lucky person.
Lots of people struggle to make big decisions like buying a home and might wonder “should we sleep on it” before committing to the purchase. The reasons run the gamut but often can stem from fear. They don’t want to make the wrong decision. They hope that sleeping on it will turn their brain into a Magic 8 Ball and give them the answer: To buy a home or not to buy a home.
The problems with this kind of strategy are myriad. For starters, whether to buy a home is a decision a buyer should have made before ever going out to look at homes. If you’re looking at homes with a Sacramento Realtor and you don’t know if you want to buy a home, please just stop. Go to open houses on Sundays or look at homes for sale online that are not really for sale on some of those popular websites that buyers who don’t know any better go to.
Should we sleep on it, it turns out, is a good strategy for figuring out answers to a complex situation. Buying a home, however, is a fairly simple situation. You either want to buy a home or you do not want to buy a home. If you do want to buy a home and you find a home that you love, then you should buy it. If you do want to buy a home and you cannot find a home that you love, then do not buy a home until you do.
Don’t fall into the trap of feeling obligated. Every so often I’ll go shopping at Nordstrom, for example, and I can’t find a single outfit I like. Nothing speaks to me. Nothing fits right. And I might feel like I should make some sort of token purchase because I’ve invested all of this time trying on clothing and not finding anything, and that’s a stupid reaction. Don’t buy a home just because you’ve spent a long time trying to find a home to no avail. Instead, regroup and re-strategize with your buyer’s agent. Maybe you need to look in a different neighborhood or a different price range?
If you feel like you are “settling” for a home because you wonder should we sleep on it, then you probably are settling for less and should not buy that home. Sleeping on it has a way of opening that window of opportunity for the non-indecisive home buyer. You know, that other couple you spotted getting out of their agent’s car at the home showing.
Despite what your parental authorities told you when handing out all of those awards in grade school, you’re not that special or different from anybody else. Neither am I. Other buyers have the same hopes, dreams and fears that you do, and the same parameters. If you are attracted to a home, other buyers are, too. If you don’t buy it, they will, and when you wake up in the morning feeling refreshed, energized and fully committed, that home will be pending.