The Art Of Salvaging A Deal

Every real estate investor knows that a deal is a fragile entity. At any moment, something can change, causing the entire deal to fall through. As an investor, is there anything you can do to prevent a deal from falling apart? More specifically, if there is, what can be done?

In the last few years, homeowners selling houses in San Diego, CA and their real estate agents have been tough on buyers. Recently, some have come up with wild demands. This is most likely the result of overly confident sellers, especially banks with REOs. The market has given them a false sense of security.

Now, some real estate investors and those buying homes in Southern California are reporting challenges with sellers bailing out of their deals. Many are lost as to what the best course of action is to remedy the situation. Let it be known, that each deal will require a large amount of effort to keep alive.

This can happen during any phase of the real estate transaction process. However, it is particularly disturbing when they back out at closing. Sometimes the selling side will even pull stunts after the closing if buyers aren’t paying attention and protecting their rights.

If issues, or even rumors of issues arise, most California home buyers don’t want to let the deal go when they are so close.

So how can real estate transactions be saved in these scenarios, and what if they can’t?

The first and most important factor is to ask why the deal is becoming unstable. If you don’t understand why, and not just the reason, you are not going to be able to approach the situation with a solution. You can’t fix what you don’t know is broken.

Unfortunately, many deals are broken because of third party individuals. Sellers are made aware of something, that may not even be true, and presumably want to back out as a result. This is in addition to media reports that cause many to panic.

People, often with good intentions, give all sorts of misguided advice to the homeowners you are negotiating with. They’ll tell them they should have asked for more, suggest they change some of the terms or conditions, and perhaps even tempting sellers to bail and to sell to them.

When these situations occur during the early stages of negotiations, it can often be wise to stay silent. Let them know you won’t be bullied and that your offer is the best they’ll get. Unless, of course, you simply can’t afford to pass it up.

Sometimes buyers will have to walk away if they are prevented from completing their due diligence or the property isn’t vacated. No one likes to be swindled, yet there will be some cases when buyers will have to come out of pocket or give up concessions to ensure the deal closes.

Put ego aside and do the math. Is it smarter and more profitable to keep the deal alive and closed, or to take the losses and start over from scratch?