Failed Earnest Money

The thing about a changing market is that it can get a little bit choppy and things don’t always go your way. 

Sure, it’s easy to sell a house in a great neighborhood, in great condition, but what happens when you have a house that needs a little more TLC that’s priced at the top of the market… while you and your clients seek to find where that market value truly is?

Last month, I helped a client sell a home that needed some fix-up work. We had a lot of buyers come through, some with early offers who wanted to tempt us to take it off the market early.  The first buyer we worked with offered us everything we wanted, but after he got it under contract, he used his “financing clause” to try to renegotiate with us on price.

We don’t know if this was his plan all along, but it sure seemed that way. We could have negotiated with him, but decided not to reward his duplicity and canceled the deal.

It turned out to be a big win for my seller. 

We put the house back on the market and sold it for even more money the next week. 

It was a close thing, though, the buyer started getting cold feet and wanted to back out of the deal. However, thanks to our air-tight contract, there was not going to be a refund of his earnest money if he did so. We let him know that we’d be keeping his money if he didn’t perform, and now he’s scheduled to close for $40K more than the original buyer.

Although this all worked out very well for my client, having two buyers with cold feet twice in a row is unusual.  It’s an indication that buyers are moving fast, not doing their due diligence, and not sure where the values are… they are feeling nervous about being left out, but lacking confidence in the market.

What can help YOU feel confident in the market as a buyer?

Good information.  That’s why we spend a lot of time teaching our home buyers what’s happening in the market, and what strategies they can use to be successful.

Emily Cressey

Emily Cressey is a real estate broker residing in Lake Forest Park, WA who services the Greater Seattle area including Shoreline, Mountlake Terrace, Brier, Lynnwood, Kenmore, Bothell and Edmonds, WA.

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