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Viewing 8 posts - 1 through 8 (of 8 total)
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  • September 30, 2016 at 10:01 PM #22144
    tnuomarap
    Participant

    Following an inspection and after 10 days the house I am selling fell out of escrow. Reason cited: Property in very poor condition.

    Although the house was built in 1989 I strongly dispute that characterization, no matter though due to 17 day right to cancel.

    In general my property is listed below comps by approx. 7-8k, which has attracted some investors. Personally I was hoping for 1st time buyers or maybe a down-sizer.

    When the offer came in I held onto it as long as I could, hoping for other offers.

    Why? The offer was to clean, to perfect. Call it intuition, don’t know but I was skeptical.

    I guess I wanted to sell to someone who might feel appreciative of the property – maybe some degree of emotional attachment/”investment.” They are more likely to overlook cosmetic/minor issues and be willing to complete a transaction IMO.

    IMO, reasons to avoid cash buyers/investors (no special order), even though they may appear as strong buyers:

    1. I believe many investors enter escrow sight unseen: they want to get houses off the market and then cherry pick. And then use the 17 day rule if the house doesn’t pencil out for them.

    2. They will try to use a strong cash offer to get a seller to pay for inspections, etc up front: termite, inspections, warranty, etc…(I guess why not try – I suggest saying no – they need ‘skin in the game’)

    3. If you are getting investor interest, you’re probably pricing to low.

    4. Since investors will look at the property as risk/benefit and not a place to call home, there is probably a good chance it will fall out of escrow.

    A seller could loose valuable exposure, time and money.

    October 1, 2016 at 7:45 AM #801714
    Coronita
    Participant

    This

    >>> When the offer came in I held onto it as long as I could, hoping for other offers.

    and

    >>> If you are getting investor interest, you’re probably pricing to low.

    Contradict each other.

    If you’re priced too low, you should be getting multiple offers, regardless of investor or non-investor. If this offer was the only one you had, chances are you’ve priced your house too high, given the condition and everything else.

    There could be many reasons why it fell out of escrow/ Maybe the buyer found something better for the same amount of money. That would have happened irrespective of whether the person is a cash buyer or not a cash buyer and whether the person is an investor or not investor.

    If you were dealing with a non-cash buyer, you know what could have happened? You could have made it past the 17 day contingency, and the buyer still could have backed out afterwards if he didn’t meet his loan contingency.

    If you really really want to push the envelope for a cash buyer, you can reduce the contingency period from 17 days to 10 as a counter offer (for example). I’ve had that done to me a few times as a cash buyer, and it didn’t bother me or change my mind one bit as long as the seller provided all the necessary documentation etc (for example HOA docs) in time. . If the person never looked at the place before submitting an offer, you could ask your agent to request that too from the potential buyer.

    The only thing you should care about is getting the house sold at the highest price irrespective of who the buyer is. No emotional attachment whatsoever.

    Sorry you fell out of escrow. It happens. just be patient, and eventually it will happen.. Been there, done that.

    October 1, 2016 at 9:37 AM #801715
    moneymaker
    Participant

    The house we bought fell out of escrow which enabled us to get a free termite tenting. Have no idea who “they” were but they beat us to the punch initially but we won eventually. Looking back we really scored when we bought our house. Now the wife is looking again though. I feel like she is cheating on our house, maybe I’m too emotionally involved. Started with a 4.75% 30 year, now in a 2.625% 15 year.

    October 1, 2016 at 9:57 AM #801718
    no_such_reality
    Participant

    If investors are looking at it I would guess the following scenario. The house was built in 1989, unless you did a major remodeling during the bubble or following. Is everything still circa 1989?

    It can be completely functional and in decent shape, but an investor will see the need to replace all of it.

    The vast majority of new buyers aren’t looking to step into a major rehab project (again for taste reasons). Nor are they looking for a 1989 kitchen and bath.

    So you may have a few options, re target towards that rare first time buyer that will see the house as live able and nice for 3-5 years until they’re ready to remodel, remodel yourself l(be your own investor), or sell to investor that will flip it

    I don’t foresee many move down buyers looking to buy and remodel to have a house that the is costing market for the fixed place unless there’s something special about location or house (Eichler home with view etc)

    October 1, 2016 at 10:39 AM #801719
    flu
    Participant

    If I were to downsize, I could probably find 3/3 condo that would cost almost the same as how much I originally paid for my SFH, if I were to factor on the additional $200-300/month extra I would need to pay for HOA on the condo.

    So there is no point in me downsizing. Folks that bought much earlier and already paid off their home, it would make even less sense probably.

    October 1, 2016 at 2:33 PM #801721
    tnuomarap
    Participant

    [quote=no_such_reality]
    So you may have a few options, re target towards that rare first time buyer that will see the house as live able and nice for 3-5 years until they’re ready to remodel[/quote]

    Those buyers are rare? I guess times have changed and I’m out of touch with reality; when I bought my 1st house it wasn’t perfect, but with a little elbow grease it was pretty nice. But I bought it at a decent price.

    So it sounds like in today’s world (in areas of So Cal) a 3/2.5 house in good (but not perfect) condition on a quiet street within easy walking distance to excellent schools is so undesirable it can’t be sold unless sold at wholesale.

    That is what I suspect and am seeing.

    October 1, 2016 at 2:37 PM #801722
    tnuomarap
    Participant

    [quote=flu-redux]If I were to downsize, I could probably find 3/3 condo that would cost almost the same as how much I originally paid for my SFH, if I were to factor on the additional $200-300/month extra I would need to pay for HOA on the condo.

    So there is no point in me downsizing. Folks that bought much earlier and already paid off their home, it would make even less sense probably.[/quote]

    Condos and their buildings often look nice/appealing, but in practice suck to live in based on my experience – I’ll take a smaller SFH any day over a condo.

    October 1, 2016 at 7:29 PM #801728
    no_such_reality
    Participant

    [quote=tnuomarap]
    So it sounds like in today’s world (in areas of So Cal) a 3/2.5 house in good (but not perfect) condition on a quiet street within easy walking distance to excellent schools is so undesirable it can’t be sold unless sold at wholesale.

    That is what I suspect and am seeing.[/quote]

    Sorry that’s not what you’re seeing. A good 3/2.5 with excellent schools SFR is selling like you’re the only guy with drugs at a rave in this market.

    If it’s not, you’re not being realistic with what you really have or where the market really is at.

    It’s that simple.

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