Why Would A Buyer Make An Offer And Then Back Out?
I love reading your real estate advice! I have a new scenario for you. My son lives in the San Gabriel Valley and has his home in escrow. Like so many other Southern California sellers he received a lot of offers. The highest offer was more than $100,000.00 over all the others. Of course, he picked that one. When it came time for that buyer to get his money to escrow it never arrived. The money was due three days after he took the offer and when it didn’t make it there, it took another couple of days to determine this buyer changed their mind. His agent then needed to scramble back to the other buyers. His Realtor says this happens a lot. I am hoping you can shed some light on why a buyer would make an offer and back out.
I too have had this happen to me more than once. The real estate contract defaults to allow the buyer three days to get their deposit to escrow. I typically write a counteroffer amending the three days to one business day. When I am particularly skeptical of a buyer or their agent, I further amend the counteroffer that the buyer needs to provide proof the wire was initiated within one business day.
When representing a La Crescenta buyer several years ago, we were out bid by $150,000. The seller’s agent gave my client the opportunity to match the offer. But I advised my client the home was not worth another $150,000. Fortunately, the first buyer did exactly what you mention. His deposit never made it to escrow, and my client got the house. So, why does a buyer make an offer and then back out?
In my situation, I believe the first buyer was overly aggressive and then regretted it. Another reason buyers don’t perform is that they have made offers on more than one home. Currently, the market is so competitive that buyers feel they need to increase their odds by writing as many offers as they can. With offer deadlines and negotiations, it can take days to learn if your offer is accepted.
It’s a shame when buyer’s do this, because we are showing our selling clients a high number then taking it away from them. Best of luck to you and your son.