Hello, Robbyn Battles here! Today, I’m excited to share a new perspective on real estate transactions, something I like to call the “Anatomy of a Sold.” Often, we see those flashy “Just Sold” postcards, but they rarely tell the full story. Let’s dive into what really happens behind the scenes, from listing to closing, using a recent sale as our guide.
Listed at $779,000 – Sold at $804,600
The Journey Begins
- Listing and Marketing: This property was listed at $779,000 and was on the market for 10 days, featuring two open houses. The buyer was actually found at one of these open houses, showcasing the importance of these events.
- Offer and Negotiation: The buyer proposed a credit for closing costs. To accommodate this, the sale price was tactically increased to $804,600, ensuring the seller’s net remained favorable. This common strategy in real estate negotiations balances buyer requests with seller needs.
Navigating the Inspection and Repair Negotiations
- Inspection Period: Inspections were completed within the contractual 7-day period. This phase is crucial for identifying any potential issues that need addressing before the sale proceeds.
- Repair Negotiations: Some issues were identified, but the sellers stood firm on not making certain repairs. This is a delicate part of the process, where both parties must weigh the cost and benefit of repairs versus moving forward with the sale.
The Terms of Sale
- Seller’s Possession: A unique aspect of this sale was the seller’s possession for 59 days post-closing. This is often negotiated for various reasons, such as finding a new home or simply needing time to move. In this case, a fee was agreed upon for this period.
- Lender Challenges: Due to the lender’s delays, the intended 30-day escrow stretched to 73 days. This lender delay was solely due to a lack of communication and proper handling of the buyer’s file. The buyer was performing as required. Why did we not switch lenders? The appraisal was done, with a cost to the buyer of over $700, and this was a lender referred to the buyer from within their family. The buyer wanted to remain with the lender. This highlights the importance of choosing a reliable lending partner. The seller was compensated for this delay by the buyer, covering the additional days’ worth of mortgage payments (PITI).
- Buyer Paid Seller Costs:Since the buyer insisted on staying with the lender, the seller could not be left simply waiting for the lender to perform. There were three extensions of time requests, and each extension became more costly to the buyer. The first 15 days were at no cost. The next 20-day extension involved two key elements. The partial release of the buyer’s deposit is non-refundable, and the charge of a per-diem. The per diem was based on the seller’s PITI. The third extension was a continued charge of the per diem. This cost to the buyer was expensive.
Closing the Deal
- Finalizing the Transaction: Despite the extended escrow period, the transaction closed successfully. The buyers and sellers maintained a good relationship, although the lender’s performance was less than satisfactory.
- Understanding PITI: PITI stands for Principal, Interest, Taxes, and Insurance. In this case, the daily PITI was calculated and paid by the buyer to compensate the seller for the extended escrow period.
- The Importance of Open Houses: They are not just a formality; real buyers do emerge from these events.
- Negotiation Skills: Adjusting sale prices to accommodate buyer requests while maintaining seller net is a delicate balance.
- Inspection and Repairs: These can be deal-breakers or deal-makers, depending on how both parties negotiate.
- Understanding Terms: Terms like ‘rent-back’ agreements and PITI calculations are crucial in understanding the financial implications of a sale.
- Choosing the Right Lender: Delays can be costly, emphasizing the need for a reliable lending partner.
Every real estate transaction is a unique journey with its own set of challenges and triumphs. By understanding the anatomy of a sale, buyers and sellers can navigate the process more confidently and effectively. Remember, it’s not just about the ‘Just Sold’ sign; it’s about the story and strategy behind it.
I hope this breakdown gives you a clearer picture of the real estate process. Understanding these dynamics can be incredibly helpful whether you’re buying, selling, or just curious. Stay tuned for more insights into the world of real estate!
Are you curious about the twists and turns of the real estate world, or just in the mood for a good property chat? I’m always ready to dive into a conversation and share what I know. Feel free to call or text me at 818-388-1631, or send an email, email@example.com my way.
Thanks for joining me on this real estate journey – I’m looking forward to our next conversation! Take care, Robbyn Battles
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