Many of the reasons for escrows being cancelled can be addressed in advance by careful consideration of details. These tips may help avoid the emotional challenges of having one’s escrow cancelled.
1. Do your own property pre-inspections such as a general inspection, and perhaps some supplemental inspections (such as chimney, sewer line, roof, etc.) so you will have reports available for prospective buyers to review before they write an offer. Hopefully you can open an escrow with the buyer agreeing to accept the property in the condition “as is” described in the reports.
2. Complete fully all required property disclosure reports and have your agent order all necessary public reports about the area before starting the property showings.
3. Have your agent request that any offers be presented with a lender’s pre-approval letter and verification of available sufficient funds.
4. Find out exactly who the buyer actually is and who will be getting the loan if it is not an all-cash purchase. Be sure that the lender has pre-approved the credit and other terms under the name of the person(s) getting the loan.
5. If you have the good fortune to receive more than one offer, try to select the best qualified buyer. Sellers are often influenced by the highest price alone, and may realize later they selected the wrong buyer when the escrow falls apart.
6. Make the effort to create good will during the negotiation process, rather than trying to take every advantage possible. Ill-will from the start can result in difficult escrow challenges.
7. Be flexible in attitude and schedule during the property investigation contingency period. Do your best to make the house available when inspection requests are made, and maintain the property in show-ready condition at least until all contingencies have been removed.
8. Ask your agent to make every effort to have a “back-up” contract signed. This will give you added security. You will then have far less delay in the sale process if the first buyer cancels escrow. Also, the first buyer would be aware that they are at risk to lose the property to the back-up buyer if they do not perform and remove contingencies by the dates agreed upon.
9. Pick the right agent. During your agent selection process, find out how many escrows they have actually closed in the last two years and what percentage of their escrows fall out. Try to determine what skills and systems they have developed to keep escrows intact.
10. Maintain a positive mental attitude and energy all the way to closing day! Escrows are not typically easy – hopefully you will have selected an agent who is a resourceful problem solver, emotional buffer, and maintains a healthy sense of humor regardless of what challenges arise during escrow.
Michael Edlen was ranked number 52 last year in a survey of all agents in the country. By applying the above tips, his escrow “fall-out” ratio has consistently been much lower than the average agents in the Westside. He can be reached at 310.230.7373 or [email protected]