A number that we should be concerned with right now in the market is 16.1%.
So what does 16.1% represent?
It represents the number of transactions that were canceled last month. The last time we saw a number that high was at the beginning of COVID when buyers really didn't know what was gonna happen. March, April, when COVID really went into full effect in our country in 2020. That's when you saw this same level of cancellations. And that's what we're seeing again right now.
So how do we tighten down offers so that sellers have some clarity that they know they're gonna get to closing?
I'm gonna give you several things to think about. You might have a few more. But one of the things is getting the disclosure statement signed as quickly as you can.
Most states require a disclosure statement. This is where we're the seller's gonna disclose everything they know about the house to a buyer. But not waiting around, not delaying getting that thing signed, and getting that cleared off the deck, removing that contingency as quickly as you can.
Second is putting tighter time limits on inspections. Don't have inspections lasting too long. Time is poison in transactions.
Third thing is requiring earn money to go non-refundable, maybe after conditions or contingencies or inspections are met. Thinking that through saying, is this an appropriate time for earnest money to become non-refundable? Increasing earnest money if the buyer is requesting work repairs to be done could be appropriate, and maybe a way to tighten the offer down.
Another one is be careful of the lender selection. Don't go with any fly by night lender. Make sure you're choosing a lender that gets sales done, gets things closed, and is familiar with the local landscape. Someone who knows the appraisers and escrow officers and is connected. Sometimes we can't control that, but hopefully we can influence them to some degree.
Having clarity on conditions and contingencies, so that everybody has a meeting of the minds and everybody knows kind of what the landscape is of the transaction. So there's no ambiguity. Everybody is clear, they have clarity.
Another one is mapping all deadlines, not just on your side, not just the things you need to get done, but what both sides need to get done in order to get that transaction closed.
And last is not over-reliance on your TC. This is especially true of teams where they kind of throw that transaction to a TC, and just move on to the next transaction. We have to be touching that, reviewing that at a high level regularly with our TCs and making sure that we're gonna be able to get this transaction to that finish line. And watching for red flags and always touching in with the buyer with the seller on a regular basis.
Communication is by far the number one thing we should be doing with buyers and sellers because people don't bail out because of contingencies. Often they bail out because of anxiety because they get fearful. Because they get confused. Or maybe they're hearing different voices. They need to know that you are right there with them. That you're the trusted counselor, that you're the expert in the industry, and that you can walk them through any anxiousness or any panic that might set in overnight.
So these are the things that will may help you keep this transactions together. I hope this helps you. Have a great day and good selling.
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