Most sellers today must sell their current home before they can purchase a new home. The proceeds from sale #1 are used for sale #2. This is referred to as a “piggyback” sale. If you are fortunate to have found a home and buyer at the same time, consider yourself very lucky. Often times, the closing for #1 is in the morning and #2 in the afternoon.
Recently, I listed a home for a client who had found her dream home first. Understanding the short window of opportunity she had to capture a buyer in the real estate market at this time provided a challenge in preparing the home for sale. An undertaking that took her 3 weeks to complete, would take the average person a few months. She was totally motivated!
After a few weeks on the market, an offer was produced and the grit of the transaction that lay ahead was revealing itself. The interested buyer had their home on the market with an accepted offer, however, a home inspection by their buyer had not been done just yet. Furthermore, their buyer was preapproved for a USDA loan, a mortgage option with an exacting underwriting process. Not a type of loan you normally see, but the option this buyer chose to go, most likely for personal reasons and beyond anyone’s control.
After an in-depth conversation between me and the buyer’s agent about the viability of their buyer, my client decided to engage her buyer to allow her the opportunity to acquire her dream home.
So, now we have six sides of a real estate transaction with four realtors involved, and as a realtor® I have a fiduciary responsibility to protect my clients personal information and deposits while helping them achieve their desired goal. Therefore, limited information can be shared to get you to the end result without compromising the client.
Once this boat sets sail, there can be upwards of 16 additional professionals involved in this sale – buyer, seller, loan officers, home inspectors, appraisers, attorneys and contractors, if needed, so careful orchestration was paramount in coordinating the contingency dates and terms (including price) in the offer.
When managing a sale transaction, the cooperating realtor is now my best friend. In a regular single sided transaction emotions can and do run high causing the possibility for the deal to derail. With so many touches here, you can imagine the need for patience, awareness and sensitivity of all the parties situation. The offer deadlines approach fast and I am not a supporter of allowing the need for an extension. Extensions are an opportunity for the deal to break, so communication and coordination are key elements in keeping the transaction together.
Fast forward … the 6 sides of the deal came together with multiple hurdles along the way that we were able to overcome. Two that I can share were the need for additional negotiations for unexpected home inspection issues on two sides of the transaction and the banks diligent underwriting process requiring the parties to jump through additional hoops. This didn’t cause any delays in meeting our required deadline, just a little more stress.
The looming threat of the foundational buyer, the one with the USDA loan, not being able to receive their commitment letter was with us every day from the beginning. The final walk throughs were scheduled and the closing date came, but an unexpected twist changed things for some of the parties. Was the looming threat going to be the structural crack that brings the multiple home sales down?