Putting your home on the market and negotiating offers is stressful. You’re entitled to a sigh of relief when you’ve got a fully-executed contract. But, the home selling process doesn’t end when you’ve got an accepted offer. There’s still a long way to go and plenty of potential for the deal to fall apart in the days between contract and close. Time is of the essence and it’s important that your agent communicates not only with you and your attorney, but also the buyer’s agent and attorney, to keep the deal moving forward, and both sides working together, toward a common goal.
Occasionally, deals fall apart because of reasons beyond either party’s control – job loss, structural issues that scare a buyer away, Acts of God. But I’ve seen more than one deal fall out of escrow as the result of a disorganized, or worse, disinterested, agent.
A few years ago, I was working with a couple looking to buy a condo in Oak Park. A few days before Christmas, I showed them a well-appointed 2-bedroom unit in a newer condo building built in 2006. The sellers were the original owners. They’d bought it for top dollar during the height of the new construction boom and were soon underwater when the housing market went bust. Life had gone on in the intervening decade. I imagined the progression from a single person to a married couple to a family with a toddler and another on the way. They were bursting at the seams and clearly need to move on – despite almost certainly having to bring a good chunk of money to the closing.
My clients made a cash offer which probably made the sellers’ hearts skip a beat.
Condos are sometimes a bit trickier to finance than single-family homes because of lending regulations. Condo buildings need to apply for and pass FHA requirements before buyers with FHA-financing will be allowed to buy there. Lenders also have guidelines regarding owner occupancy rates, financial reserves, and building maintenance.
Cash buyers meant no mortgage contingency and no appraisal. The sellers were eager to negotiate and, after a few rounds of back and forth, a deal was struck.
It should have gone off without a hitch.
The first 5 – 10 days of any contract are busy. Attorneys need to be hired, contracts reviewed, and inspections conducted. Buyers have five days to get the inspection completed and another five days to negotiate any repairs or credits for issues uncovered in the inspection report.
Earnest money was due on the 23rd per the contract. The inspection was scheduled for the 24th. My clients lived about 20 miles northwest of Oak Park – a 45-minute drive on a good day, an hour on a bad day. In this digital age, much of the paperwork can be completed electronically, but the earnest money check needed to be delivered by hand to the sellers’ brokerage.
It was the last few days before Christmas. My client called and asked if she could bring the earnest money to the inspection instead of having to make two trips.
“Shouldn’t be a problem,” I told her. I would certainly have agreed to a similar request if I were representing the seller. It’s a small concession, a show of goodwill and collaboration. I called the agent to request a one day extension and was surprised when she told me no. We’d agreed to provide earnest money within 48 hours and needed to meet the deadline.
I called my client back and explained. She was ticked. So, I volunteered to drive out to her, pick up the earnest money check, and drop it off with the other agent.
The weather was awful – dark, angry clouds and a mix of driving rain and sleet – and traffic was a mess. Parking close to the entrance of her office building was impossible and, by the time I hoofed it from a half-football field away, I was soaked to the skin. My client was ticked. Not at me, but at the listing agent who’d been so inflexible.
I tried to reassure her that it was all in a day’s work for a real estate agent. For me, it was a lesson learned. I had picked the earnest money due date. So, if the listing agent was a stickler, then I had to comply with the terms of the contract.
The Christmas Eve inspection uncovered a few issues my clients wanted addressed by the sellers. My clients’ attorney sent the request and we waited for the sellers’ reponse.
New Year’s came and went with no response from the sellers’ attorney. I sent a few emails to the sellers’ agent, but got no reply. I chocked it up to the holidays. But when there was still no response by January 3rd, I was concerned. Technically, either a response or an extension request was need on or before January 4th. If the sellers did not respond by that date, my clients could terminate the contract without penalty.
I started raising the alarm on the 3rd. I am prohibited from contacting the sellers but I reached out to everyone else. I asked the buyers’ attorney to pressure the seller’s attorney and I called, texted, and emailed the listing agent and asked for an update.
Still nothing. January 4th came and went without any answer.
My clients threatened to cancel the deal. Maybe they were angry about the missed deadline. After all, the listing agent had required such strict adherence to deadlines from my client, but now had no regard for those she was responsible for meeting. Or maybe they had begun having second thoughts about their decision.
Whatever the reason, the deal’s momentum was gone and they had lost patience. The listing agent’s lack of responsiveness and the resulting loophole in the agreement gave them just the opening they needed and on January 5th they signed a mutual termination agreement withdrawing from the deal.
Suddenly my phone was ringing off the hook.
Excuses from the agent and seller’s attorney about how the sellers had been investigating costs associated with some of the repair requests and they were ready now to respond. Could I get my client to re-engage?
I did my best, but my clients had moved on.
I felt most sorry for the sellers who were probably blindsided by this “sudden” turn of events. I imagine that, like me, they got no response from their attorney and agent, who should have been keeping them in the loop and creating a sense of urgency around resolving the inspection issues. But, I’m fairly certain that if the attorney and agent were non-responsive to me, they were also non-responsive to their clients’ emails and phone calls.
The agent you select to help you list and sell your home is contractually obligated to represent you through the sale process – from advising you on pricing, arranging access for potential buyers, and “developing, communicating, negotiating and presenting offers, counteroffers, and notices that relate to the offers and counteroffers until…a purchase agreement is signed and all contingencies are satisfied or waived.”
Your agent should provide you with a due diligence schedule that outlines the critical dates included in the sales contract. He or should also be reaching out regularly throughout the post-contract phase with updates on the process. If you don’t find them responsive before they list your home, you can be fairly certain they won’t be responsive after you’ve signed on the dotted line.