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VOL. 39 | NO. 19 | Friday, May 8, 2015

Do we have a deal? Yes, until we don’t

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People are angry now. Angrier than ever. In the past, there may have been a slight skirmish or two, but now there are battles that often escalate into full-scale wars.

Buyers feel they have paid too much, and sellers feel they are being waterboarded during the inspection process.

With the Realtor army having grown from approximately 2,400 to nearly 3,500 recently, one third of those in the line of fire have no battle experience. It shows.

Some firms have hundreds of troops under the management of one person, with the result being no chain of command and, at times, a lack of leadership.

So what happens? Deals crumble.

In 2006, there were nearly as many transactions as there are now, of course, there was much more inventory so the overall vibe was less intense.

A principal broker at a successful firm recently compared the conditions of the two markets. In 2006, he recalls, he signed one earnest money release each month on average. Earnest money is released when a sale is unable to close- usually based on one of the contingencies in the contract.

Now, he says, he sees one a week.

When a contract is established, there is a certain amount of money placed in escrow by the potential buyer to show the offer to purchase in serious, or earnest. That money is held in the escrow account and can be refunded if any of the contingencies of the contract are not met.

Traditionally, these contingencies included stipulations for financing, inspection and appraisals. If the home does not appraise, the person was unable to get a loan or the inspection uncovered deficiencies, the buyer is able to request – and in almost all cases receive – a refund of the earnest money.

These days, that is not always the case.

Understandably, sellers are disappointed – to say the least – when buyers walk. The inspection period is 14 days on average, and most lenders will not order appraisals until the inspection period has passed and the buyers and sellers are still in the game.

Scott Ractliffe, the venerable senior loan officer with Pinnacle Financial Partners, has captained a number of battles in his day and often waits for the sellers to surrender on the buyers’ inspection demands before ordering the appraisal since he does not want to subject his borrower to the expense if the transaction is going to be terminated.

In many situations, buyers have been forced to buy homes in “as-is” conditions in order to succumb to the demands of the sellers in this seller-friendly market.

When the inspection reveals issues that the buyers feel the sellers should have disclosed on the Tennessee residential Property Disclosure, they ask the sellers to make the repairs.

‘No way,” the sellers say. “You bought the house ‘as is.’”

“But there are roof leaks, and you did not disclose them.”

“Those are old leaks. I fixed the roof. No leaks.”

“Well it still leaks.”

“Does not!”

“Does too!”

“OK. I want my earnest money back!”

“Well I’m not giving it to you!”

And so it goes.

I miss Kurt Vonnegut.

Sale of the Week

“New Orleans meets Rosemary Beach” is the description given to homes at Woodmont Hall Place, represented by Steve Mabee and Nathan Weinberg, the Realtor/development team from Parks.

There are no two less-similar locales than the trendy Rosemary Beach and the history-soaked city of New Orleans.

Having achieved success in East Nashville and Inglewood, this endeavor is the Mabee/Weinberg team’s first in Green Hills. Green Hills and East Nashville are about as similar as the beach and the Big Easy, so why not?

As unlikely as the sisterhood of these cities, the combination is working, and Mabee and Weinberg have produced a winner with the Rosemary Beach theme.

The development is a huge success, with two more of the eight homes under contract. This 3,270-square-foot home sold for its list price of $699,000, with buyer’s agent Alexander Brandau IV representing the buyer.

These homes are quite green in the sustainable sense, with Belgard pervious pavers, according to the listing agents, who note that the community includes “rain gardens, tankless water heaters and Energy Star windows to go with its four bedrooms, four baths and two half-baths.”

All of the kitchens in the eight-unit neighborhood have the amenities now required of new construction with the custom cabinets, stainless appliances and double ovens.

The NOLA architecture, combined with the modern seaside style, is working on Woodmont. Next up, the Big Apple meets Dodge City.

Richard Courtney is a real estate broker with Christianson, Patterson, Courtney, and Associates and can be reached at Richard@richaerdcourtney.com

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