Contract failures have been one of the more recurring problems in real estate in recent months, and with roughly a third of agents experiencing them, they have easily garnered a reputation among Realtors as one of the main inhibitors to the real estate recovery.
There are steps agents can take, though, to avoid contract failures in their transactions, and we’ve taken the time to point out three of the most effective.
- Price it Right – Appraisals have been a huge cause for contract failures. By now, the situation is time worn: a price is agreed upon on a property; hands shake, plans are made; yet, the appraisal for the property comes in below the agreed price, and the seller refuses to budge on the price. To avoid this unfortunate development, make sure the home is priced correctly, and that you have a good grasp on what comps the appraiser will use.
- Have Your Paperwork Ready – Make sure that your clients have all their paperwork in order; it may seem like a no-brainer, but contracts fall through all the time because paperwork is not ready when it’s needed, so make sure you have all the necessary documentation ready before an offer is even made.
- Have the Client’s Finances Straight – Be absolutely sure that your client has the adequate finances to purchase the property, and make sure they have fully-formed, educated answers for all the questions we just wrote about regarding home financing.
Those may seem like Real Estate 101, but again, more than a third of contracts have been failing in recent months, so for many agents, a return to basics may be exactly what the doctor ordered. But what has been your experience with contract failures? And do you have any tips to add to our list?