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A closing story from The Glamorous Life of a Real Estate Agent – Volume 2: Cops & Robbers:
…The sellers were very upset and we had no explanation of what happened. We could not understand why [the buyer] had been willing to close an hour before and then we could not even get him to return a phone call. Well, a couple of days later we found out what happened when it was all over the news. It turned out our buyer had been running a prostitution ring from his “salon” ….
Steel giant Andrew Carnegie said, “Anything worth having is worth working for.” But, he never said the work had to be last minute. Educating your sellers at a transaction’s start is a great step toward a smooth closing.
Here are a few tips for work you can do seller-side to remove hassle from the final steps of closing a sale:
1) Develop an Offer Analysis Plan
The highest price may not be the best price. And, laying out the major offer evaluation points in advance can help you get ahead when closings start to become a reality. You want explain why and how you will analyze:
- Inspection contingencies and why sellers want as few as possible
- Mortgage contingencies and the impact of their length
- Deposit strength
- Down payment size
- Mortgage terms
- Ability to rent the home back
Right off, some sellers won’t get why your goals are pushing for shorter contingencies and maximum flexibility in the buyer’s mortgage terms (in an effort to lock them into the deal as soon as possible). After all, this is the opposite strategy from when they bought the property. To help make the end of the transaction easy, it’s a good idea to explain your plan for negotiating and analyzing offers early on.
2) Secure Back Up Offers
Since a good percentage of real estate deals fall out before they close, having a back up offer is a smart move for savvy sellers and their agents. It means that just like in the Miss America pageant, if for any reason Miss America doesn’t work out there’s a first runner up to take the crown.
When presenting multiple offers, do more than help pick the best one. Advise your sellers on the second best offer and why it’s important to have a back up position.
3) Discuss Property Delivery
Delivering the property is an important issue. Many sellers think just because they have sold the property, they should hand over the keys and shout ‘good luck’ as they drive away. Talk to your sellers about any delivery details that are a part of the contract and those that will hedge against the buyer finding last minute things wrong after they have moved in like:
- Touching up any paint scratches or scuffs
- Ensuring sure outdoor areas are trimmed and beautiful
- Removing any trash or garbage from the property, and
- Cleaning the house from top to bottom
Catching buyers can be a challenge, but closing doesn’t have to be. Comment below and tell us what other advice you have to help sellers make it to the closing table and execute the deal.