We recently closed a sale that was a way out-of-the-box experience! The buyer’s agent represented that her clients could close with cash, but they were leaving open the option of getting a loan with First Republic Bank. I suggested comparing loan products between First Republic and Citi, but the agent said her clients are die hard First Republic people. We accepted the offer (with a First Republic loan written into the contract) and the agent left for Thailand on vacation for the whole inspection period. We moved past the inspection contingency (eventually). First Republic loan docs arrived at escrow but the buyers wouldn’t remove their loan contingency because the First Republic loan was a 30 yr fixed mortgage with principal + interest payments for the whole 30 years. The buyers decided to apply for a loan with Citi that was 4.65% interest, 25% down, 30 yr fixed with the first 10 years of payments interest only and principal + interest payments starting only in year 11 for the duration of the loan. The loan wasn’t simple for a big box bank like Citi to approve because the buyers had complicated financials and going through all the supporting documentation at every level of the bank was grueling and labor intensive. So we all called Citi daily and we waited and waited, and every day it was “2 more days” for more risk management and review. But eventually the loan was approved, Citi loan docs arrived at escrow, and a Closer from Citi was assigned to facilitate the end of the deal. And then the buyers asked for a 2 week extension to liquidate investments and close with cash, with two different sets of loan docs at escrow and 2 different banks ready to fund and close. The deal in fact closed (all cash no loan) 26 days after the original close of escrow date.
Before acceptance, there were 2 offers on the table. The buyers with the accepted offer were stronger financially than the competing offer. The competing offer was higher than the accepted offer. The agent with the cash offer was a stronger and more experienced agent. Along the way there was opportunity for the sellers to cancel on the buyers in escrow and to switch to the backup offer.
Before an offer is accepted, and especially when there are multiple interested buyers, sellers have all the power and they’re in the driver’s seat. Once an offer is accepted, the only way a seller can enforce the contract is by canceling on the buyers in escrow and starting anew with a different buyer. The buyer already in a deal has some leverage because what the sellers usually want most is performance by the buyer in escrow, especially once the deal is past inspections and the buyer has the cash to close. A seller has the option to cancel and to start over with a new buyer (and that happens) but when a buyer clearly wants the house it’s a tough choice to cancel and to start over while the buyer in escrow weighs financial options.
A real estate deal is always a dance between the needs & wants of the buyers and the sellers. The real estate agent guides the dance in the most strategic and smart way that represents their clients’ interests best. I absolutely loved representing my sellers through this never-seen-before scenario and getting the deal to the finish line. I miss all our joint strategy sessions and navigating the twists and turns of their out-of-the-box deal together.
I also miss all my kids, in-law kids, and grandkids who were here for the holiday! I cried as I strapped my grandson into his car seat as the first carload of the day left for the airport. The best thing I did while everyone was here was taking my 2 toddler grandsons to The LA Zoo (sans parents!!) the day before the Passover Seder, (correctly) figuring we’d do fine without one more chicken or vegetable dish but it would be invaluable to spend the day with the babies at the Zoo. I loved marveling with wonder (alongside the wide-eyed little boys) at the chimpanzees munching red peppers, the giraffes chewing hay, the flamingoes dipping their webbed toes into a pond, and the striped zebras congregating together. By the time we arrived back home, both babies knew all the hand motions to “The Wheels on the Bus Go Round and Round” (and we made sure to practice the new skills over the holiday.) This Passover was extra special because it was a huge treat for our family to spend our very first holiday all together, new members and old. The most wondrous part for me was observing the new dynamics, culture, and vibes of the newly assembled clan. It’s interesting to see all the personalities, roles, and contributions of each individual, and their place in the new whole. It feels like life flies by in the blink of an eye and it behooves us to savor each moment because we blink and in an instant it’s just a memory. I love to be a Grandma as much as I love to be a Real Estate Agent; thankfully when the grandkids go home, there are houses to be sold!
Wishing all an awesome week ahead!