Selling a home in a housing market as competitive as Washington, D.C.‘s is a tricky prospect. It isn’t as simple as saying “yes” to the highest offer or the most enthusiastic buyer.
Buying a home is perhaps the biggest financial decision someone can make, and people are oftentimes afraid of making a mistake. A home sale transaction can quickly go south for a number of reasons: The buyers might not have their finances in order, or they may suddenly get cold feet. The key for sellers and their agents is to do their homework on a prospective buyer — and stay aware of any signs of trouble in a home sale.
According to some of the top real estate agents in Washington, D.C., as identified by real estate data company OpenHouse Realty (a U.S. News partner), these are some telltale signs of an iffy offer.
A long list of contingencies. Any hint of hesitation leading up to a ratification of a contract should be seen as a red flag, says Nate Guggenheim, an agent with Washington Fine Properties LLC. If the buyer has an unusually long contingencies list or asks peculiar questions, that’s usually not a good sign.
[Read: 6 Ways to Sell Your Washington, D.C., Home Fast.]
Having too many questions about small things like utility bills is often a red flag, says Kimberly Cestari, an agent with W.C. & A.N. Miller Realtors, a Long & Foster Company. “If someone is worried about maintenance costs and utility bills, you wonder if they can afford the house,” she says.
Especially with condos, buyers might become obsessed with the intricate financials of the building. Guggenheim says, “They’ll ask a lot of questions outside of the norm about how a building is run, or want to talk to a lot of people in the building prior to writing an offer.” In his view, this is hesitation veiled as due diligence — a sign that the buyer isn’t ready to make a purchase.
Weak finances. You should be wary if a buyer insists on putting down very small earnest money or escrow deposits, Guggenheim contends. “It either speaks to a weak financial position or a desire to not put too much skin in the game so to speak.”
Sometimes there’s a reason why buyers won’t commit too much up front: Perhaps they’re relying on a gift to place a down payment and haven’t received it. However, if a buyer’s agent can’t explain a financially weak offer, that’s a red flag.
A too-speedy transaction. Speed is not always a good thing, Guggenheim advises. The Washington, D.C., area is a very competitive market, so it’s not surprising to see eagerness on the part of both buyers and sellers to rush through a sales transaction. With the danger of buyers getting cold feet or buyer’s remorse, it’s better for people to sleep on their purchase first, especially if the person is a first-time buyer.
In turn, sellers “should be purposeful in how they respond to and accept an offer” to make sure it’s the right offer, he says.
[Read: 5 Real Estate Trends to Know Before Selling Your Washington, D.C., Home.]
So what can you do if your buyer backs out? To take control of your home sale transaction, experts offer this advice:
Find out where the buyer is emotionally. Buying a house is an emotional process, but it’s also a business transaction. “When those two things don’t align, it’s a problem,” Guggenheim says.
This is why it’s important for you and your real estate agent to gauge where the buyer is, both emotionally and financially. He or she might be very excited at first, then go through stages of fear or regret and remorse. “Make sure you know where the buyer is in his or her emotional journey, and that the buyer’s agent has a good grasp of where the buyer is,” Guggenheim advises.
Learn as much about the buyer as possible. A thoughtful, pragmatic assessment of the buyer pays off, Guggenheim says. A good rule of thumb is to call the lender and find out what the preapproval process was like. Is the buyer qualified to buy the house? Why was he or she interested in the property? “Good and thorough research lowers the percentage of having things fall apart if you correspond with all parties ahead of time,” he stresses.
Specifically, you should get information about the buyer’s full financial picture like recent credit scores, if they’ve ever declared bankruptcy or where their financing sources are coming from. “Are they borrowing from a 401(k) or is it cash for the down payment? This reflects the financial power of the buyer,” Cestari says.
Don’t do transactions via email. This is a very fast way to miss what the buyer is feeling. “If the buyer’s agent hasn’t called, it’s important for the listing agent to call them and read the situation” so the sellers know if they have a solid contract going forward, Guggenheim says.
Hire an experienced real estate agent. This seems like common sense, but enlisting the help of an experienced agent could mean the difference between a successful sale or one that falls through, Guggenheim says.
The process of selling a home is very nuanced. “It’s an art, not a science. But the more deals you do, the more you can read between lines,” Guggenheim explains. A good agent will be able to “read the tea leaves,” so to speak, and provide the guidance you need to get your home sold to a competent buyer, he adds.
[Read: What You Need to Know About Flipping a House in Washington, D.C.]
If a shaky contract does fall through, your agent can take steps to save the deal, says Cestari, who recently found a suitable buyer for a client’s home after two other offers didn’t work out. One great strategy is to inform other agents in an email blast that the home is available once more. They might have clients who showed a previous interest in the home.
According to Cestari, this is a much more effective way to find a prospective buyer than putting the house on the market again, since buyers who have seen the house and shown interest will want “first bite at the apple” before the house comes back on the market.
Looking for a real estate agent in Washington, D.C.? Our Find an Agent tool can match you with the person who’s most qualified for the job.
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3 Red Flags to Look for Before Accepting an Offer on Your Washington, D.C., Home originally appeared on usnews.com
