Saved! Buyer almost Walked Away from the Closing Table -by Chris Whittaker

Yesterday I was 2 days from the closing date on one of our listings in Summerlin in the Las Vegas area of Nevada. The escrow was a 60 day close (which frazzles my nerves to begin with, but we had a non-refundable earnest deposit) and we had taken care of everything the buyer requested. I was at the property waiting for the carpet cleaners--we did go above and beyond on this one, an immaculate corporate home to begin with--and as the carpet cleaner was pulling up I got the call we all dread as real estate agents. "Hey Chris, we've got a 911 emergency. I'm at the title company ready to sign documents with the buyer and he wants to walk," said the buyer's agent. I was not prepared for that kind of call. I calmly asked a lot of questions, mainly what's causing the cold feet of the buyer? The buyer's agent said the buyer had seen a house on the internet in the same neighborhood with more upgrades for $10K less. I immediately called my wife to search the neighborhood on the computer for that home and drove by it. It was a similar lot but closer to the freeway and not as neutral as ours as far as the paint went (plus ours has an extra bathroom). I maintained my calm demeanor with the other agent when I called him back, just explaining the consequences of his buyer potentially losing his earnest money deposit and reminding him of the positives of our property. The buyer's earnest money deposit was about 1% of our sales price and I just couldn't see a person walking away from a few thousand dollars to save a few thousand more. Without losing my cool, I put it to the buyer's agent like this: his buyer was talking about potentially saving literally a couple of dollars per day in a payment and risking the home he originally fell in love with, the loss of thousands of dollars, not to mention the cost of the appraisal, and time spent to redraw the doc's and qualify for the new loan. That was the rub. The buyer didn't realize that he couldn't just roll his loan approval to the new house he found. He didn't realize that he'd basically have to start the whole qualifying process all over. It's our job to educate our clients and to be rational in this scary, emotional process for them. We don't know what they don't know until we start asking lots of questions.   

The buyer was under the impression that buying a home was like getting a car loan from the credit union. With a car loan you get approved for the loan amount and go find the car. Not so in the home loan industry. According to the buyer's agent, the lender ran the numbers for the other home at the lower price, but because of the changes in the lending industry and loans for 100% financing, his interest rate would have jumped from 8% to 9.25%! The buyer's monthly payment would have been higher for the home that was actually listed for less! (And, I still maintain that waiting for the bottom price isn't the smartest buyer strategy. Rates can and do go up. In ten years, you'll be amazed at the price you paid for your home compared to current prices.)

Thank goodness I didn't postulate with the buyer's agent and actually got him working for us to try and save this deal. The buyer's agent called me to let me know that we still had a deal and they were signing today. I was relieved at this point, then he sprung another one on me. The lender said the appraisal went to review and came in for $7000 less than our accepted price. I was at my wits end but had no energy left to get angry, and it's not his fault anyway. I just called the lender and listened to the multitude of reasons why underwriting had a problem with the value and the original appraisal. I just wanted to make sure they counted all our upgrades and the additional bathroom.  

My day ended with a delightful conversation with the seller telling him about the appraiser's value and how he has to give up another $7,000 or else we don't have a deal. The buyer doesn't have any money to be able to come up to our price. The downside is if our seller doesn't take it, we risk the house selling for less later on. I feel like coming down to the appraised value is the only thing to do. I didn't yet tell him that we almost lost the deal anyway because of the other home in his neighborhood that just came on the market.

What I have learned over the years, in selling Las Vegas Real Estate and in negotiating with other agents is to not let the ego get involved. Figure out the way to come to a WIN-WIN. Talk everything out. It's not always easy. The first thing we do on our team when we get an offer on a property is write a letter to the buyer's agent letting his clients know how lucky they are to have such wonderful representation, we know the agent will show this letter to his clients. We do everything we can to get the other agent on our side so that we have a positive transaction and can negotiate a stronger deal on behalf of our clients. This negotiating tool has worked for us tremendously. Afterall, it is our job to put our clients' needs above all else...within the means of the law of course.