It’s interesting to observe that when interest rates were at their lowest during Covid, it was a heyday in real estate and everyone wanted to buy and sell properties. Prices shot up because of all the increased demand. Post Covid, interest rates shot up. With high interest rates, sellers with locked in low rates have incentive to hold on to their rates by holding on to their property, and they have incentive not to sell. Low inventory keeps prices from going down, even with high interest rates. The combination of high interest rates + high prices creates a reaction of caution + tension around house purchases, even as buyers bid way over the asking price on special houses priced to sell. Low inventory also makes houses priced below market get multiple offers and sell over asking. The combination of high prices and high interest rates puts us in a climate where emotions run high on all sides and every nuance and detail matters to everyone. We find ourselves feverishly working around the clock to organize and manage details, expectations, emotions, and most importantly outcomes. This week Friday it felt unusual that we sent out 3 Notices To Perform for our sellers to agents representing buyers on the other side.
The first notice was to remove all contingencies. The buyer has no loan or appraisal contingency (because the purchase is all cash). The inspection contingency period was up on Wednesday, February 21. The buyer sent a Request For Repairs to the seller and the seller signed, agreeing to the buyer’s request. When the buyer got to the point of removing contingencies, she decided to run the deal by her lawyer to get a blessing to proceed. The lawyer wanted to do diligence and not to just give a blind blessing. We quickly provided all requested details and the personal cell number of our title officer and the lawyer approved the buyer sending full contingency removal.
The second Notice To Perform was to a buyer to remove their loan contingency. We moved past inspection and appraisal contingencies and the last piece to the deal is loan approval. The loan contingency was up on Monday, February 19. The agent represented that loan contingency removal was imminent so we sat tight. On Wednesday morning the buyer’s agent texted that they’d remove the contingency by the end of day. Wednesday night turned into Thursday morning. Thursday they said it would be “today”. By the end of Thursday, it turned into “tomorrow morning.” I told the agent that we’d be sending a “Notice To Perform” and she asked if we could wait to send it until next week. And then they shared that the lender is asking for clarification on some line items on the buyer’s tax return. I believe that if a lender needs an extension, it’s ultimately more effective if the lender is upfront and honest that an extension is needed, with an explanation and a length of time. We often see lenders say that loan approval will be “today” for extended periods of time to avoid the risk of getting a “no” to an extension request. In general in life I believe in braving the truth and risking a difficult conversation rather than skirting it and hoping the conversation never happens. Sending a Notice to Perform is the seller’s side starting a conversation.
The third Notice To Perform was to a buyer to remove an inspection contingency. The buyer’s inspection period was up Monday, February 12. It was raining on Monday and Tuesday and the buyer wanted to do one last foundation inspection post rain. The inspector was only available Thursday so we agreed to accommodate the inspection at 10 am. The inspection report was supposed to be delivered to the buyers by the end of day Thursday. It was delivered at noon on Friday. We sent a Notice to Perform end of day Friday to put a deadline of Monday at midnight for resolution of the request and the response. As soon as we sent out the notice, the request for repairs came. The buyers are excited and they want to buy the house, albeit responsibly with written reports and money from the sellers to cover necessary repairs.
On our buyer deal, we removed all contingencies (14 short days after acceptance!!), having worked past inspections (that uncovered many necessary repairs!), loan, appraisal, and insurability. The business day after we removed all contingencies, we got a surprise email from the listing agent titled “Amendment to AVID”. In the email, the listing agent shared that the next door neighbor just informed the listing agent that in 1990 the neighbor and the previous owner made an agreement on their property lines and where their shared fence was placed and the boundaries are now different than they show per city records. I’ve never received or sent a disclosure post full contingency removal. The whole disclosure is that in 1990 one owner decided to give 2.5 feet of her property to her neighbor and the shared fence went up per their agreement; it would have worked better to have all disclosures before contingency removal versus after.
Public posted interest rates are 7.875% for a 30 year fixed!!! Our buyers in escrow are both securing 5.5% fixed interest for 30 years and one of them is putting only 15% down. Both are in escrow for way over the asking prices. Both are buying incredible houses that are worth every penny and both are hyper excited about their beautiful new homes!!! My family makes fun that I squeal and whoop when we get an accepted offer as if this is all brand new to me.Â
My mom was an incredible cook and baker. She cooked a lot by instinct and experience, but she also loved to collect recipes from her Gestetner sister in laws who were incredible Hungarian cooks and bakers, and she cut out popular recipes weekly from the Sunday edition of the LA Times and from magazines like Good Housekeeping. I always loved to experiment with recipes from cookbooks. I’d host My Mom often for meals and then she’d go home and use the recipe I made as a base, but she’d improve on every part of it and take it to the next level. My daughters and I love to experiment in the kitchen like My Mom. This week I made Miriam’s Sourdough Pita Breads, Sourdough Oatmeal Cookies, and Miriam’s most shared + popular Rib Recipe. Raizy says I have to try her Homemade Healthy Granola Bars and Pretzel Rolls. Like My Mom, my girls believe that half the taste of the food is in the way it looks (and also in the extra salty seasoning.) Before My Mom died, she said she was so sad to miss Miriam’s and Raizy’s weddings. If Mom was here, she would definitely make those Pita Breads and Pretzel Rolls the most perfect of everyone! We never stop missing people we love (even when they outdo us every time)!
Wishing everyone an awesome week ahead!!!
Xoxoxoxo,
Sheri
