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We have not bought or sold real estate since the new due diligence rule went into effect. Our house is under contract (took 2 days). Due diligence is 21 days. I feel like a hostage. I can’t show my house I can’t pack for my move. So my question is - how often do buyers actually walk away for no reason? I get it if the inspection found something horrible. Or if the house was way under on appraisal - but do many buyers just say, we’ve changed our minds? I’d love some reassurance.
Unfortunately other people's experience mean nothing. Some transactions close with no problems, other fall apart for strange or never disclosed reasons. Did the buyer put up any due diligence money?
I've sold 3 houses under the due diligence contract rules. All closed smoothly. On the other hand, I know of lots of horror stories.
A lot depends on how much due diligence money they put down.
This pretty much. I could imagine if their DD was like $800 (for example) but an inspection turned up something terrible like foundation problems that'd cost $10k to fix, there'd be a good reason to bounce from the deal.
In this market though, I think most people are pretty committed to their offers so I wouldn't be overly worried.
They put up $1000 in due diligence and $3000 earnest money. The inspection is scheduled for Monday. Closing attorney contacted me for closing information. So stuff has been going on since we went under contract. DD ends 3/30 and scheduled to close 4/18. I guess I’m looking for some actual statistics (which I am confident someone in NC real estate keeps) like 20% of buyers walk for no reason or something. I’ve bought and sold 7 houses in the last 35 years and I’ve never been this anxious.
We sold last year, so I'm not sure about the "new" due diligence rule. We did have some showings after going under contract, and we were moving out of state regardless so I was packing. And our buyer ended up walking away, for some of the dumbest reasons I've ever heard of. Nothing major found during the inspection -- nothing. But the inspector wrote down a bunch of tiny, piddly things like "relabel electrical panel" (because it was a little faded, not because anything was wrong) and "service HVAC" simply because the unit was 8 years old even though there was nothing wrong with it (and in fact we performed maintenance on it regularly). Several other very, very tiny things. Some of them we did (we sprayed for bees, we replaced an electrical outlet), others we declined, simply because they were not big items and we were under a massive time crunch to get out of our house at the time. It was a horrible feeling when the buyer walked... but temporary. The good news is that in this market, there is so much competition that it wasn't long at all before we were under contract again, and this time with much more reasonable buyers.
The bottom line was that the first buyer was going to be a first-time homeowner and must have gotten freaked out about the fact that he was going to have to do a few minor "homeowner" things, at some point in the first year or two of owning the house. There was nothing we could do to fix that person's perspective -- I think he just wanted a brand-new house. Luckily, more reasonable people came along and I think I felt better about the sale in the end. And although every hour felt agonizing, in the big picture, we got to keep the DD money, and it all worked out. So even if the "worst case" that is currently in your mind happens (buyer walks), I think you're probably in a best case as far as a seller's market goes. I understand how scary the whole thing is, but I hope this reassures you at least a little.
If you've bought and sold seven houses before it's probably safe to say your house isn't what most would consider a "starter house". I'd imagine that first-time buyers who are unfamiliar with the whole process and who may get overwhelmed/anxious about the different expenses and other things that go into purchasing a home would account for the majority of buyers who back out "for no reason".
FWIW....I was one of those people. I was under contract for a townhome in Carrboro in 2014 which would have been my first home-purchase and was very anxious about it. That's actually how I started out using this forum!
I forfeited the DD money and backed out before even having the inspection. The loan application process and all of the upfront costs I wasn't expecting didn't sit well and it just didn't feel like the right decision at the time so I walked away after being under contract for about a week. The townhome went under contract again less than a week after I backed out and it actually ended up selling for more than I had been under contract for.
Two years later after maturing a little more and feeling more financially secure AND picking a Realtor who I knew and trusted....I went through with the whole process much more comfortably and ended up buying a condo in Chapel Hill.
All that to say....if your buyers are not purchasing your home as their first-time buy and aren't going through any major personal life issues (divorce, illness, etc.)...you probably don't have to worry about them backing out of the deal.
Last edited by TarHeelNick; 03-14-2018 at 09:30 PM..
In this market? I wouldn't worry about it. It sounds like you suspect something will come up on the inspection. I'd still be showing the house and I'd still be packing. I started packing my last house before it even went on the market, not sure what that has to do with anything. You're moving one way or another.
Stats are meaningless without some context. In different markets and at different times people will walk for different reasons. You actually are likely to have a decent amount of "walkers" in a hot sellers market as people make emotional offers and they also make offers they really can't afford (see Nick's post above). When we were buying our first house we got a ton of calls on houses we offered on where the deal fell through because people were bidding on houses they couldn't afford.
This is where a good realtor comes in - they will make sure -working with buyers' realtor - that that deal actually has financial life. When we sold our last house our agent helped us work through our offers to take the best one that would close the deal.
Could you be dealing with such people? Possible, but it's not worth losing sleep over, again barring some major issue that comes up on inspection if your first offer came in that fast your backup would likely do the same.
You could always assume that they will back out, and then be pleasantly surprised if they don't!
My motto when selling a house is that it's not sold until you leave the closing table with everything signed and done, and the money on the way to your bank account.
We recently sold out of state, and I know that feeling of anxiousness, looking for any sign that it's going well or not going well. You can drive yourself crazy and make things harder on yourself, because you just don't know yet.
What I did was think about the two possibilities -- deal falling through, and deal not falling through -- and then I'd think about what I could do now to prepare for those situations. I put my energy into researching movers, giving away or selling items I didn't want to move with, etc.
It didn't completely remove the anxiety but it prevented me from wallowing in it. Good luck with your sale!
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