Understanding Risks in Real Estate Deals: What Sellers Need To Know

By Travis Bard

We have a simple goal - impact the lives of our clients and change the lives of our agent partners. The PLACE.com business platform allows us to do both and we could not be more excited about the future.

What are the risks involved once we enter a real estate transaction, and what keeps us from closing? As sellers, it’s understandable to ask this question to identify and mitigate these risks effectively. There are a few things we can work through and talk about upfront.

Financing is always an issue in large financial deals like buying or selling a property. Luckily, over the last few years, underwriting standards and appraisals haven’t been an issue. This means lenders typically aren’t the reason we fail to close a deal.

Inspection items can also cause a deal to fall through. If a buyer requests repairs, the seller might not be willing or able to make those changes, leading to a disagreement. Rarely do I see a situation where a buyer just flakes out and doesn’t close, but when it does happen, it can complicate things.

In these cases, the seller has options. For instance, earnest money can come into play. If a buyer backs out, that money becomes nonrefundable, and the seller can keep it. We can also use different mechanisms to encourage the buyer to close if they’re hesitant, but this doesn’t happen very often.

Due diligence with the buyer’s agent is important. Understanding the buyer’s motivation and financial situation is crucial. We lay the groundwork for conversations about inspections and any items that might matter in the transaction.

Moving forward, we expect some buyers will want to represent themselves. While it’s their choice, that’s always going to be a risk. Without a buyer’s agent on the other side, we lose that third party who can help us work through those details and bring a voice of reason during the transaction.

As the real estate landscape changes, it’s more important than ever to work with professionals on both the selling and buying sides. We’re here for you, whether you’re ready to list now, have already listed with us, or are considering doing so in the future.

Our goal is to mitigate those risks and work on your behalf. If you have questions or concerns, don’t hesitate to reach out at (928) 710-7007 or travis@legacyren.com. Let’s make your real estate experience as smooth as possible.