Recently, I had two buyer escrows and two listings fall OUT of escrow. Not the direction I like to see things go and always frustrating for both the buyers and the sellers. I'll briefly outline what happened and offer up my best advise on how to avoid "rubber escrows".
The first one is my listing. The buyer was well qualified and their loan was strong. However, the buyer was from out of the area which was concerning as my listing is a foothills property with the normal kind of stuff you find in a 60+ year old home which hasn't sold in 30 some years. I advised the buyer's agent that homeowners insurance was a bit of a challenge in the area. After a couple of weeks, the buyer cancelled based primarily on the price of homeowners insurance in the foothills and the cost to install a well for irrigation.
My advise: Please make sure that you choose an agent who is familiar with the type of property you are buying. In this case, the bump of insurance escalated into a deal breaker when it really didn't need to.
The next is my buyer who is very familiar with the area and chose me (an agent in the same area). The property is tenant occupied and there were several items that were undisclosed until our home inspection. Had we been told about the issues up front,in the disclosure paperwork, we may have been able to adjust our offer, negotiate a credit, or work out some reasonable solution. To have numerous very costly items dumped on us at once without a reasonable concession broke the trust that the buyers had and they had no desire to move forward.
My advise: Just disclose items you know about. Broken appliances, water leaks, costly maintenance items, easements. These things will be uncovered. Period. Better to inform the buyer and offer a solution that works for everyone.
The last two are connected as my seller put in an offer for his replacement property only to have the buyer's lender fail. The lender had known all along that my seller's home probably wouldn't meet their criteria but they stalled everyone and side stepped direct questions until the buyer was out inspection costs and lost part of their deposit. When this escrow fell apart so my client's purchase.
My advise: No matter how much I try to ensure the lender is going to perform, as the listing agent I can only do so much. My sellers now require that my more challenging listings get a preapproval from a proven lender. I always say - I don't care if the news is bad or challenging, just be honest so we can find a solution.
I guess my take away from rubber escrow season is 1) put together an honest team, 2) educate yourself to be part of that great team, and 3) every escrow is going to have a challenge or two. Every escrow.
However, if the buyer wants to buy and the seller wants to sell, there is a suitable solution for everyone.
