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.
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Legacy Comments
Great tips! And I might add another bullet to tip number 3. Be sure to label and pass along all keys (including those to external buildings, bilco doors, padlocked gates, etc.) and automatic garage door openers.
Great suggestions…timelines and expectations are crucial factors. The more a seller is informed, the more realistic they are.
Thanks.
Steven Rukhman
Houses For Military
These are great tips and words for realtors, buyers and sellers to live by during the stressful and oftentimes frustrating buying and selling process. Everyone should be on the same page and there should be no surprises at closing. That insures that all parties fully understand what is happening and what their proceeds/costs will be at closing. A good agent is one who can keep everyone informed including the lender, title rep, buyer, seller and the other agent representing the other side of the transaction. It is essential to take detailed and copious notes throughout the entire process. When everything falls into place, it is wonderful to see all parties come away with smiles on their faces.
This information sounds like it comes from Manisons and Millionaires. I work in a market of reo properties and short sales. We have the choice between those two, and a probate on occaision. Most of the tips would not apply. I would like to see real world, real problem recommendations. This is particularly true on short sales where seller receives no proceeds, has moved from property, and is not motivated to pick up after he leaves.
Michael’s comments were definitely relatable to real world problems. I handle far more “regular” deals than REOs, short sales, and probates. I have yet to work with a millionaire or sell a mansion! True, the deals you mentioned have their own set of circumstances, but to insuate that Michael’s advice missed the mark is unfair.
Great tips, but don’t forget to keep in contact with buyers/sellers regularly.
I also like the idea of marking all keys, along with info on where the mailbox is-if it is not on the property.
Regarding “A good percentage of real estate deals fall out before they close…”: I am a high-producing Realtor in the Midwest in a high-end market, and around 99% of my deals close–only one fell through in the past 5 years. So putting information out there that may be relevant for a certain part of the country can scare buyers and sellers unnecessarily.
Also, we give advice with a “C,”, not an “S.” You wrote a book? Hire a better proofreader, as correct spelling is important in your profession!
“Advise your sellers on the second best offer and why it’s important to have a back up position.” Michael used the word “advise” properly here. Advise means to guide, inform.
“Comment below and tell us what other advice you have to help sellers make it to the closing table and execute the deal.” Michael used the word “advice” properly here, as well. Advice means helpful tips, additional information.
Your comments were very unnecessary and completely incorrect.
“Advise your sellers on the second best offer and why it’s important to have a back up position.” Michael used the word “advise” properly here. Advise (verb) means to guide, inform.
“Comment below and tell us what other advice you have to help sellers make it to the closing table and execute the deal.” Michael used the word “advice” properly here, as well. Advice (noun)means helpful tips, additional information.
Your comments were very unnecessary and completely incorrect.
I ask the Seller if they would write down all the utilities’ companies (phone, cable, gas, electric, trash etc.) and their phone number. This makes the transition alot smoother for the Buyer when utilities have to be transferred into the Buyer’s name.
Great tips! I always like to have my sellers, if the relationship is good to give the new buyers a run down (in person or via email) of the house. How things work, patterns and things that might otherwise take a while for the buyers to figure out.
Great tips! Explaining the benefit of backup offers is a must. A lot of sellers aren’t familiar with the way they work, but once it’s explained, it’s a ‘no-brainier’!
Set expectations in the beginning. Sometimes, deals fall through for various reasons. Let them know in advance that this MIGHT happen so if it does, sellers are prepared to take the necessary steps to move forward instead of dwelling on what just happened.
Great comments and article. Also, any items agreed to by seller and purchaser regarding repairs in the property inspection addendum should be completed professionally and checked prior to closing so there are no surprises at final walk through by the purchaser.
shorter contigencies but longer u/w periods won’t make for a smooth closing. it is better to be safe than sorry and allow adequate time to close than be unrealistic in some markets.
One thing I’d like to add is regarding appliances and chandeliers. If some appliances are not included in the sale, or if a high end lamp fixture is not part of the deal, better to remove it before any showings. You’d be very surprised to learn that a listing said “no appliances included” (except obviously only the stove, which must be included by law, and only to find the buyers expected the Microwave, the Dishwasher and refrigirator and all A/C’s and both washer and dryer to be part of the deal because the house was shown that way. If it’s a high value lamp fixture, remove it ahead of time. If none of the appliances are included, call the buyer’s agent long before closing and clarify.