Well, 2021 is here, and it does not seem like the real estate market is letting up anytime soon. Certainly, it is a good thing that people are out there wanting to buy homes. At the moment, interest rates are still low, and sellers are considering listing their homes to take advantage of the same. Yet, a robust and competitive market can lead to many pitfalls that people need to be aware of, especially if they are buyers.
Anybody who is looking for a home in the current market can confirm that any good property is being met with several competitive offers which is good for sellers, but not so great for buyers. Many of these competitive properties are going to contract after an exhaustive bidding war, where the buyers are compelled to bid higher than the asking price to secure the property. Even if there is not a bidding war, there seems to be another thing that is happening which also proves to be detrimental to the interests of buyers. It’s called “rushing,” and it’s bad. Don’t do it. Rushing in anything never yields the best results.
It is said that you cannot rush a good thing, and that is certainly true when it comes to purchasing real estate. In fact, it is always better to slow things down so a decision can be made thoroughly and considering all possible options. If it is meant to be, it will be. Too often in the last several months, we have come across well intentioned people who either got caught up in the process or are being pushed in some form or another to quickly make decisions or take actions to which later they decide they are no longer comfortable.
This is problematic because when trying to buy a home, you are still dealing with a legal process. Particularly, a real estate transaction is guided by an enforceable contract of sale. This contract of sale requires financial consideration in the form of a deposit, and after the conclusion of attorney review, the contract is binding. When the deposit is tendered to the seller (typically by being deposited in the Seller’s attorney’s trust account) that amount of money is held pending closing. If a buyer changes his or her mind, and no longer wants to fulfill the contract, then they are in breach of contract. A buyer that breaches a contract will certainly not receive a refund of their deposit, but can also be liable for the Seller’s carrying costs, as well as the difference between the contract price and a subsequent selling price if that selling price is lower.
Without a legitimate basis to cancel the contract, such as not being able to agree on inspection issues or not qualifying for a mortgage, there really is no other reason for a buyer to legitimately cancel a contract. Deciding that the home no longer works for you or not worth the price that you committed to paying is not a reason to cancel a contract. So, don’t rush it.
There’s no reason why anyone should ever force a transaction or rush into it based on the false pretense that they have to buy this house or bust. It does not work that way, and oftentimes, the more relaxed and calm a buyer is through the process, the smoother and more peaceful the process becomes. Certainly, from our point of view as practitioners, calm and peaceful buyers who did not rush into a transaction or force the outcome are good at following our lead to demystify the process and methodically going through it in an optimistic fashion. Ultimately, taking it “day by day” and not forcing the matter always yields to an enjoyable process that culminates in the joy of a new beginning when you get the keys to your new home.
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