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VOL. 45 | NO. 44 | Friday, October 29, 2021

The Terminators: They’ll be back to kill more deals

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The 2021 real estate market is a paradoxical mélange of sales juxtaposed with contract terminations, some houses selling in minutes while some homes linger on the market for months.

Buyers are forced to walk the tightrope of impetuosity and patience, waiting for the perfect – or almost acceptable – home while pulling the trigger the second the property enters the market.

Sellers are swamped with offers and forced to wade through the mirky verbiage and determine which is best, while buyers must pander to the sellers while protecting themselves.

In a world where many homes are bought by buyers who have never seen the home, sellers are forced to determine whether a facetime viewing carries the weight of a physical showing. Even with the mountains of photos, videos, drone photography and all of the wonders of Google, buyers may have failed to notice the fatal flaws of the houses.

Once the on-site inspection occurs, the buyer might realize there is a feature of the house that forces them to terminate. Recently, one such shortcoming of the house was that the cost of adding a swimming pool was too high. At that point, the buyer utilized the pass/fail inspection to terminate the contract.

Of course, the pool excuse was not mentioned, but all houses have some deficiencies the inspector might discover, allowing buyers to walk away. In many cases, once a buyer has seen the ease of terminating a contract and having the earnest money returned, the buyer converts into a serial terminator, contracting for house after house, only to terminate each time.

All of the real estate world is indeed a stage, and buyers and sellers are merely players. The real estate contracts often read like scripts from a play with the playwrights – Realtors – having their own styles. Some are forthright, others loaded with symbolic, obtuse language.

There are companies floating through the internet that sell leads to real estate brokers willing to pay for the contact information of investors eager to enter the Nashville market. In this case, the characters have no knowledge of each other, with buyers able to vet their Realtors only a much as any search might reveal.

In most cases, any information accessible on any Realtor is self-generated and prone to hyperbole. The investors are often hidden behind some corporate veil awaiting their cue to spring into action with small earnest moneys that seldom arrive on time and vague clauses allowing them to jump out of contracts as quickly as they entered into them.

Within the myriad offers, there is one that should be accepted. And it’s often not the highest but the one most likely to close.

How is that determined?

Many buyers’ agents feel a “pre-approval letter” from a lender – any lender – is as solid as cash in the bank. In their eyes, a lender is a person who can create a logo and sign a letter filled with disclaimers. Often, they have no idea about the financial wherewithal of the buyer, many times not even having run a credit report. The buyer is merely a name on a screen. What’s in a name?

Somewhere along the way, new Realtors have been trained that earnest money should be 1% of the offer amount. That means there remains 99% of the sale price for the buyer to gather and allocate to the sale.

If the buyers are so worthy of credit – and the contract says they are investing 20% in the property and closing quickly – it seems a larger earnest money amount would be in order. If a buyer has even 10% of the sale price being held in escrow by a third party, they are less likely to walk.

Sale of the Week

If a discriminating homebuyer had a budget capped at $325,000 and a desire to live in Green Hills, the chances of finding a two-bedroom home with two bathrooms are slim.

267 Hillsboro Place

If the buyer demanded hardwood floors, a newly updated kitchen with stainless steel appliances, a wood-burning fireplace, a mantle fashioned of reclaimed wood, shiplap walls and a swimming pool 100 feet away, the odds of finding such a home are incalculable.

Yet, it happened just last week, and a magical week it was with the underdog Atlanta Braves winning the National League pennant and the Tennessee Titans decimating the Kansas City Chiefs and Buffalo Bills.

There is a condominium located in the Hillsboro Station development with all of the features associated with upscale living that sold for $319,900 within hours of hitting the market.

Listed by Allen Perry of Keller Williams, the 1,048-square-foot condo delivered all of its splendor for $305 per square foot. Although, the upgrades are astonishing, the price set a record for the neighborhood, as Perry’s listings usually do.

Lauren Graves, whose license is with Exit Realty 615, represented the fortunate buyer, who will set the record for highest sale once again when it is time to move.

Richard Courtney is a licensed real estate broker with Fridrich and Clark Realty, LLC and can be reached at richard@richardcourtney.com.

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