Keeping the Transaction Together
One of the most critical services a REALTOR can provide, is the ability to "keep the deal together" until closing.
Many Buyers and Sellers believe that, once the contract is signed, it is a binding commitment on both parties and things will flow smoothly to the closing. This is not the case! In a Seller's market where prices are rising, Sellers may receive backup offers for higher price than the first contract they accepted, and are "chomping at the bit" to see the first contract fall through. In a Buyer's market, the Buyers may see another property that offers better value than the one they just wrote a contract on, and may find the way to get out, using any of the "Get Out Of Jail Free" contingency clauses to get out of the contract (such as financing, sale of a house, inspections, etc.)!
The South Carolina Association of REALTORS amended their standard contract in July, 2013 to include a "Due Diligence" period as an alternative to the traditional "Inspection and Repairs" contingency. Under the Due Diligence alternative, the Buyers can rescind (for ANY reason) the contract at any time before the Due Diligence Date, by notifying the Seller in writing and paying the "Due Diligence Fee". This is designed to level the playing field between Buyers and Sellers, avoiding contracts with one-sided clauses benefiting only one of the parties. Choosing the "Inspections and Repairs" option or the "Due Diligence" option becomes one of the choices of the contract that parties need to agree to.
After the Due Diligence period is over, the contract becomes an"As-Is" contract and the Buyer must proceed to closing subject only to loan approval.
As a listing agent, it is essential that all these contingency "cracks" are "tightened up" to protect the Seller in the event that the Buyers change their mind afterward.
1. The "Subject to Loan Approval" contingency
2. The "Subject to Appraisal" contingency
Is there adequate time to conduct the appraisal and go through underwriting before the closing date? This contingency can get tricky if the market is changing: Appraisers are very conservative and may ignore market dynamics, especially if the market is "hot" and prices are rising rapidly.
3. The "Subject to Inspections & Repairs" contingency
4. The "Due Diligence" contingency
Your listing agent must be experienced (at the contract negotiations stage), and on top of the game (during the contract-to-closing period) to ensure that all deadlines are met, that commitments are followed through and that all parties are performing their tasks, to avoid granting unnecessary "walking opportunities" to the Buyers in pursuit of another listing. Of course, it is at best difficult, (and most times impractical) to "force" the Buyer to perform against his/her will. But the more attention to detail, the better chances you will have that the transaction will close as planned!
Wish to sell your home? Give us a call at 843-900-0155.