This is a story about commitment, tenacity, and an iron-clad will to keep moving forward toward the goal. It involves a real estate transaction that I was recently part of, and it has many lessons to teach.
I listed a house for sale and within a week my clients accepted an offer from some willing, able, but not-quite-ready buyers. The contract was a “lease/option.” Here’s how that works:
- Buyer writes an offer to pay a set price for the house, even though it’ll be, in this case, 8 months until closing.
- Buyer puts up, in this case, $10,000 non-refundable option money. The house is off the market to other buyers.
- Buyer signs a lease agreement where, in this case, about 12% of each month’s rent is credited toward the purchase price.
- Seller takes the $10,000 and begins life as a landlord, planning and hoping for a smoothe closing 8 months later.
In this case, the buyer wanted to wait ’til the new year to avoid excess tax on a withdrawal from a retirement account that he planned to use to buy the house. When the economy collapsed, though, that money all but vanished.
Still, the buyer wanted the house, so he listed for sale another house he had in a far-off location. (That basically made our sales contract now a lease/option/contingent contract. Odds of closing, statistically, about 10%).
But a buyer for the far-off house appeared almost instantly, and it came under contract. A smoothe closing, however, was not in the cards for that house.
First, the buyer of that far-off house got snookered by a shady mortgage broker, and was told he’d have to (and he did) put up almost $8000.00 as a “good faith deposit.” (NEVER, EVER DO THIS!!!)
Second, the house was so far out there that the appraiser (and eventually a septic inspector) could only access it by bush plane, (read: expensive and it will take forever — and it did!!!)
Third, there were no Realtors involved in the sale of the far-off house. No one to officiate, collect and communicate material information, negotiate the hurdles, again COMMUNICATE with all the involved parties, and on and on and on. In cases like this, a Realtor doesn’t just “help.” It’s not a matter of merely “making things go a little smoother.” You’ve either got a Realtor or you’ve got a vacuum. And the sale of the far-off house was going to take place in a vacuum. NOT good.
Fourth, there was the shady lender, and there was a more accessible lender handling the purchase of my client’s listing, working for a world-renowned banking and lending franchise, but who wouldn’t communicate to save his life.
As the option period neared the end, we not only had no evidence that we were going to close on time… we had nothing at all. We had nothing material from either lender, we had no Realtor at all involved in the far-off house, we had no idea if the appraisal had happened or not, we had no idea who was handling title and escrow on the far off house.
I had the buyer’s agent, our escrow officer in Bellingham, and myself all trying in vain to get some answers… and we had almost NOTHING.
EXCEPT: We had a willing buyer and a willing seller. And they both agreed to sign a one-month extension while we continued to look for answers.
And as this transaction played out, I would learn with crystal clarity, that as long as you have a willing buyer and a willing seller, ANYTHING can ultimately be overcome.
