Do you remember when you got your first checking account? Perhaps you were eighteen and you were told that when you sign a check, you are signing a binding contract.
Same goes for the real estate purchase contract. It’s binding. I’m not sure what has happened over the last several years, but in the state of California, it appears as if many people are not taking the real estate purchase contract seriously.
For example, a buyer offers to purchase a property and close the transaction within 45 days of acceptance of the offer by the seller. Seller accepts, and 30 days into the transaction, the buyer says that his lender cannot close the transaction on time. The lender needs another 21 days.
Or, a buyer offers to purchase a property as-is for a specified price. Then, after the offer is accepted, the buyer changes his mind and wants to pay less.
Or, the buyer makes an offer to purchase a home and the seller accepts (perhaps after multiple counter offers). The buyer then continues to surf the Internet and explore other available options, and wants his or her Realtor® to continue showing homes even though the buyer is under contract.
While everyone understands that circumstances arise that can impact a buyer’s decision to purchase a property, unfortunate situations like these do not land buyers and their agents at the closing table.
A significant number of transactional pitfalls could easily be avoided if buyers’ agents set expectations accordingly prior to showing homes. Here are three ways to set expectations accordingly and help avoid deals falling through:
It is vital to set buyer expectations and to explain the real estate contract in great detail. Make sure that your buyer knows what s/he is signing—a binding contract. Frivolous changes and cancellations can be costly—to the buyer, to the seller, and (of course) to you as well.
Blog articles are purely for educational purposes and provides generalized information of the topic(s) covered. These articles should not be considered as legal advice.