You did it! You finally saved up enough money to buy a house! You went to the bank and qualified for a loan. Even better, you finally found a house for you and your family! Except there is on catch, escrow is difficult. You keep running into snags with the sellers. People told you that buying a house could be stressful, but this is even worse than you imagined……are all escrows like this? Why do people buy and sell real estate if the transactions are all this awful?
Here’s a hint: buying and selling real estate does not have to be this stressful and complex. It may be time to “blow up the deal” aka cancel escrow and walk away to find a new house. Walk away you say?! But this is the best house in our budget, we have already invested so much time and money into the property that we will lose if we walk away. What if we can’t find another house? This has already been an emotional roller coaster, what if the next escrow is worse?
Let me tell you a story about a client of mine who listened to my advice and canceled escrow:
This client who we will call Bob the Buyer looking to purchase a home for his family. Bob found a house that he liked in the area he liked so we submitted an offer. Bob came in $10K under list price (very reasonable) and asked the seller to pay for a septic inspection, water test and pest report. The sellers countered our offer asking for full list price and refusing to pay for any inspections. This is already a bad start, it is clear that the sellers did not want to negotiate with us. Nonetheless, Bob loved the house so we agreed to the full list price but asked for the sellers to pay for the above mentioned inspections. A deal was struck, we opened escrow! Bob was ecstatic because we were finally moving forward and he was on his way to becoming a home buyer!
I was still concerned that this would be a difficult escrow because it was a struggle to get into escrow, it took us about a week to negotiate the deal. With my reservations in mind we moved forward with the inspections. The inspections came back, pretty standard: the home wasn’t spotless but we didn’t expect it to be. There were a couple items that Bob wanted taken care of. I prepare a request for repairs and send it to the sellers……
Cue the proverbial sh*t storm……the sellers read the reports and completely panicked. They took the reports to mean that their house was in horrible condition (it wasn’t, it was in very good condition but it was an older home) and that Bob would end up suing them for selling Bob such an awful home. Bob asked for roughly $3,000 in repairs and the sellers refused our request, in its entirety. Bob is now panicking because this is the only house he has liked, what if he can’t find another one?! He can’t do this process again, it has been non stop stress and difficult. What should we do?!
Let’s take a deep breath and evaluate the facts:
- Bob was in escrow for full list price
- Bob asked for pretty standard inspections given the area
- Bob asked for only a handful of repairs and was prepared to take on the other noted conditions in the reports himself
- Sellers said no and they were completely panicked about the “condition their house was in”
Now what should Bob do? What should my advice be? My advice was simple: if they refuse to negotiate on the request to repairs, we walk away. YEP! I advised my own client to blow up escrow. However, I did say that if we go with this strategy, there was no going back. This was not going to be a negotiation tactic or an empty threat. Bob said okay, I am on board with the plan. After multiple days of negotiation, the sellers still refused to budge on the request for repairs. At this point Bob completely panicked because he knew that we would follow through on canceling escrow, so he told me that he would be okay accepting the house as is.
Now here is what Bob forgot:
- There is always another house on the market
- This is a business transaction, it needs to make sense to continue to move forward and at this point this transaction did not make sense
- There was no reason for Bob to overpay and have a house that under delivered because he was afraid that another house wouldn’t come along.
So we canceled escrow…..guess what? The next day, yes less than 24 hours from canceling escrow, Bob was in escrow in a house that he liked EVEN MORE than the last one. It took us one day to put it under contract (versus the week on the previous property) and the transaction actually ended up being much less stressful for Bob.
Moral of the story: Never be afraid to walk away from a house if there are red flags or you are not happy. There will always be another house and an easier seller to deal with. Buying a home is an exciting experience, but don’t let your emotions get the best of you! Sometimes it is better to blow up the deal than to continue to struggle in it.
If you are looking to purchase a home, please reach out to us today! We would love to help you find the perfect home for your family 530-343-7085