When the buyer backs out

This year we are noticing an uptick in home buyers making an offer on a home for sale and then backing out during the inspection phase. 

Often buyers do not have much of a chance to look at or think about their purchase. Houses sell quickly and often get multiple offers. Sometimes they make offers on a house and then as they have time to think about it get cold feet.

Usually, the house can be put right back on the market and if there were multiple offers the seller can accept another buyers offer. Home sellers can and should keep collecting offers until the sale closes.

I wish buyers wouldn’t back out and the best advice I can offer is if possible buyers should ask for a second showing to see the property again before actually making an offer. Most of the time when the buyer backs out there isn’t anything wrong with the house itself, the problem is with the buyer.

There really isn’t any way that home sellers can prevent a buyer from backing out. Even buyers who offer a lot of earnest money will occasionally back out but usually before their earnest money is at risk.

Sometimes home buyers will ask for a lot of repairs as a way to back out of a purchase. I had some buyers that did that a few years back. Instead of telling me that another home was on the market that they liked better they came up with a lengthy list of repairs and upgrades.  When the sellers said no they canceled the purchase and go their earnest money back.

Fall might be better for homebuyers

I got kind of excited when I noticed that the number of houses on the market in St. Paul has crossed the 600 mark. We haven’t seen that since November of 2017.  That by no means signals the end of the seller’s market. but it is an indication that the seller’s market may be weakening a bit.

We used to see more homes on the market in the spring than in late summer or early fall. It is beginning to look like we will see an increase in the number of homes for sale. Closed home sales have been trending downward the past few years but that is only because there have been fewer homes for sale.

With interest rates back down to all-time lows maybe the next few months will be a little better for home buyers.

Other people’s clients looking for a second opinion

realtor_r_blueIt happens all the time. Home sellers and buyers who are under contract with a real estate agent want a second opinion so they call or email another agent. It is easy to second guess another agent but I won’t do it. I don’t know the whole story and I am not comfortable judging someone else. There are all sorts of situations where people want free advice . . . because it is free.

Sometimes people get their second opinions from friends and family via Facebook or other social media sites. That isn’t where I would ever go for a second opinion but for a lot of people when they need advice even medical advice that is where they go.  It is pretty easy to find a real estate agent who will give free advice to other people’s clients.

People who are having trouble with a real estate agent should talk to that agent. If the agent isn’t doing his or her job as outlined in the buyers or sellers contracts buyers or sellers can ask the agent to cancel the contract.

If that doesn’t work or isn’t an option the next step is to call the real estate company and ask to talk to the broker. Real estate agents work under real estate brokers and the broker is responsible for the agent’s actions. Most brokers will defend whatever their agent does because . . . that is what they do.

If the agent is a Realtor® (Member of the national association of Realtors) and has done something unethical consumers can file an ethics complaint through the Minnesota Association of Realtors. There is a code of ethics and the specific article that was violated needs to be stated in the complaint.

Which should you choose, house or neighborhood?

Some home buyers are open to many architectural styles and others have a specific style and even floor plan in mind when they go house hunting. Homebuyers who have there heart or budget or both set on a certain neighborhood may find that their favorite style of home isn’t there.

If you are looking for a rambler or a split level home with a two-car attached garage I would not bother looking in the downtown area but you might find some in the western part of Highland Park and in the battle creek and Eastside neighborhoods.

If you like Tudor style homes look along Summit avenue or in Merriam Park or in the Cherokee heights neighborhoods because those are the areas with the biggest concentrations of them. I have clients who specifically want Tudors or Craftsman-style bungalows or even Ramblers.

When choosing a neighborhood consider the housing style and when choosing a housing style consider the neighborhood.   When you find the right combination you may find that you can not afford the style of home that you want in your favorite neighborhood.  Homebuyers sometimes end up compromising on style or neighborhood or both when they don’t match.

People who want new construction won’t find much in St. Paul and if they do it will be large and expensive because that is what gets built.

In recent years people have been buying houses in their favorite neighborhood, tearing them down and building the kind of home that they want which is of completely different size and style than what is usually found in the neighborhood. Thankfully that isn’t an option for everyone.

6a00d83451d6cf69e20115713d580f970c 500wi
Tudor style house – Merriam Park

Humans are exposed to mold indoors and out

I drew this myself

There is a 100% chance that the home you live in and the one that you buy in the future has mold in it. Mold is everywhere.

This is what the Minnesota Department of Health has to say about mold testing:

Poor reason for testing #1 “To find out if there is mold”

A complex mixture of mold particles normally exists in all occupied indoor environments. If appropriate testing is done, it is expected that molds will be found. There is, however, an important distinction between the normal presence of mold particles, versus mold growth and accumulation indoors. Unfortunately, even when it is done well, testing may not be able to distinguish between “normal” and “problem” conditions and it may even give misleading results.”

To lessen mold growth in your home, seal up any leaks, dry everything out. Clean or remove moldy surfaces. The Minnesota Department of Health website has information about how to clean up mold using bleach and water. 

I know it was just last month that I wrote about Lead-Based Paint because it is safe to assume most St. Paul houses including my own contain lead-based paint.

Real estate is still local

Home sales were down nationwide in June by 2.2% year over year. It isn’t like it was during the great recession. Home sales are down because there are fewer homes for sale.

In Chicago, land home sales are down by double digits. Experts are suggesting that Chicago home buyers may have lost confidence in the economy.

In St. Paul home sales are down 4.5% from last year. In the Twin Cities metro area, it is still the shortage of homes for sale that is keeping home sales down.

Some real estate trends reach from coast to coast but they vary by location because real estate is local.  Most of the real estate news comes from the West coast which is another factor to consider when reading real estate news and advice.

graph of home sales
St. Paul home sales