I was having a conversation with one of our buyer’s agents last week and, yes, we were doing a little venting. Finally, in exasperation over a particularly frustrating situation, she said, “What is wrong with people?” It wasn’t what she said but the way she said it which made me laugh out loud.
But, now that you mention it…
It happened again this week, and it is happening all too often lately. A buyer canceled escrow. This is not pandemic, but it is not big news. When escrow was notified, their only response was, “What’s going on? Everyone is canceling contract today.
Here is my frustration, which I will share in the form of a sincere plea to would-be buyers – Please be sure you are sure before committing to a purchase. Recently, Offers to Purchase have, too often, become recreation. Purchase agreements have become scratch paper, and I see too many buyers with the mind set that these doodles can easily be discarded when they are no longer amused or entertained by the activity. It is the return policy absent a restocking fee which I wrote about here, a policy about which pcguide.com had this to say: “I don’t expect anyone else to pay for my mistakes.”
As is so often the case for agents lately, our cancellation came a full week after the contract had been consummated. And, allow me to offer a refresher. Once you enter contract, you have essentially fired the gun at the starting blocks. A lengthy chain of events is initiated, and dozens of people spring in to action on your behalf. Disclosures are prepared, packaged and sent for signature. Natural Hazard Reports, Homeowners Association Documents, and CC&Rs are ordered and billed. Termite inspections and property inspections are scheduled and attended. Escrow officers send and prepare instructions and grant deeds, they request seller lender demands, and they order title reports. The buyer’s lender begins loan processing and orders appraisals. These playful distractions are just representative of the time and effort being spent by the agents, transaction coordinators, escrow and title officers. The seller is also and obviously involved and effected.
The seller, by virtue of accepting an offer, has now taken his home off the market. There will be missed opportunities to expose and ultimately sell his home to other interested buyers. He suddenly finds himself buried in an avalanche of documents. He is now amusing himself with finding replacement housing within time frames which you, the buyer, have prescribed in your agreement. He is scheduling repairs and fumigations and movers and utility transfers. A thirty-day escrow passes quickly, so time is of the essence.
The language of the Purchase Agreement generally favors the buyer. In California, the default terms allow for 17 days within which the buyer may perform his due diligence. If within that time, the buyer decides for whatever reason to change his mind, he is entitled to do so – to take his money and go home. The intent is discovery, discovery of material issues which may influence the decision to buy or not buy. These issues can be significant; if the inspector discovers burial remains in the bonus room, this might be of concern. Most often, however, issues are not so troubling and can be easily addressed.
What we see too often these days, unfortunately, is the buyer treating the “opening escrow” ritual as a casual event, an event marking the beginning of their decision-making process. By this, I mean decision-making in terms of “Do I really like this home very much?” Too many times in the past, I have heard a buyer remark that he would use the 17 days after acceptance to keep looking for another home, just in case he finds something he likes better. This is clearly not the intent of the contingency period, nor is it fair to the many people involved. It is an inappropriate mind set for such an important transaction.
So, to buyers, please remember that you are not buying a pair of shoes. When you are offering to purchase a home, you are offering to purchase someone’s home. The act of entering contract should not be taken lightly. The contract allows you time to discover facts not known at the time the offer was made. If you are simply unsure about the desirability of a property based on what you do know, however, you are not ready to purchase this particular home. To commit before you are committed is not fair to the seller, to the professionals who will be working on your behalf, or to yourself.