They say there’s a reason for everything. It’s hard to believe this includes when you have to shrug off an offer that fell through. Everything was going fine and then out of the blue, BAM, the buyer rescinds their offer. Well, here’s how to it breaks down.
So, what went wrong?
After I bash my head against a wall a few times, I’m going to advise you to take a deep breath to stave off the panic and frustration that is undoubtedly warring inside of you, too. Then, I will remind both of us that many sellers have been in our shoes and still sold their house.
It does not feel good, but it isn’t the end of the world when an offer suddenly falls through.
Sure, it’s stressful and annoying that closing was within grasp, but if an offer is withdrawn, it usually means there is a valid reason behind the move. It could be that the financing failed, a job loss, or (knock on wood) a serious health issue for the buyer that forces a leave of absence. Occasionally, it is on the seller’s side, like if a major issue with the home arises and the buyer is seriously concerned.
An agent who is a sharp negotiator will minimize as much risk as possible during the tricky offer
Here are some points to keep in mind:
- Even if a full-price offer is made, you are not obligated to accept that offer. Granted, even cash offers usually contain contingencies such as performance dates and inspection contingencies.
- You can accept, counter or completely reject an offer. Contingencies are always built-in for the protection of both sides should the deal fall through.
- If you counter an offer, this is where a little offer-pong happens. Rarely is an offer accepted as written. Don’t resist it. Be open to having a dialogue with the other side. Engage in a little back and forth. With some patience, you will end up with an agreement where everyone is happy.
Even if everyone does their best and something unexpected causes the deal to fall apart, the most effective way to shrug off an offer that fell through is to understand exactly what happened. (Note: These conditions vary from offer to offer and state to state. Please consult the advice of an attorney to see if the same conditions apply to your situation.)
- Minimize the inspection time period. We negotiate all inspections to be concluded within 10 days of the offer acceptance.
- Understand your inspection clause. The inspection period often covers the buyer for any and all inspections of the property and “due diligence.” This means if the buyer is dissatisfied for any reason, not just structural defects, they can withdraw from the contract without risking their deposit.
- Vet their financing. Privacy laws prevent us from digging deeper into the buyer’s financial situation but at minimum, you should have a pre-approval letter from a reputable financial institution. Dig further, call the lender to see if they have verified the buyer has sufficient funds to close and verified their credit-worthiness. Some pre-approvals are based on information the buyer simply told the lender, without verification. You have to ask questions. Even with a cash offer, Require a letter on the bank’s letterhead or a copy of the buyer’s bank statement (please sharpie out all account and social security numbers!) proving the buyer has sufficient funds to close.
- In some cases, it might be a good idea to have the property pre-inspected and make repairs ahead of listing so you minimize the risk of finding unsatisfactory conditions. Mold in the attic and radon are common surprises here in Oakland County, Michigan. Pre-inspections are not always necessary or even a good idea. Seek the advice of experts when looking into this.
There, you have a basic understanding of the offer process and some legitimate reasons why an offer can fall through. Now, on to how to actually shrug off an offer that fell through.
First, regroup and strategize a plan.
- Your real estate agent is going to be your rock during this process. Do your research when hiring a real estate agent. If they sell a lot of homes, they most likely have been through this process before and can successfully navigate this situation for you.
- A good agent will have valuable experience, offer solutions, and have good resources to help you manage problems. A great agent is one that won’t shrink from delivering bad news. It’s never fun to deliver disappointment, but withholding information in order to “protect” the seller is not in the best interest of the seller.
- If the offer falls through and the situation does not fall under any of the existing agreed-upon contingencies, the mutual release and earnest money deposit will have to be negotiated.
- Lastly, your agent should have an effective strategy for re-introducing your home to the market. It isn’t the same for every situation. If you were in a multiple-offer scenario, looking and meeting with those buyers is my next step.
Shrugging off an offer that fell through is tough, but totally doable. Take a deep breath, understand the situation, obtain legal advice if necessary, and work closely and quickly with your agent with a strategy to find another buyer, they have your back!