Priscilla Toomey: Avoiding Dangerous Assumptions in Real Estate: Part III Print


By Priscilla R. Toomey, Licensed Associate Real Estate Broker, Julia B. Fee/Sotheby's International Realty  

Nov. 15, 2017:  This third article in the series explores dangerous assumptions you should avoid after you have received an offer.  

Dangerous Assumption #1:  Don’t assume that once you receive an offer at an acceptable price, you’re home free. An offer must also disclose the buyer’s terms: contingencies such as an inspection and a mortgage commitment, percent of cash to mortgage, a proposed closing date, and anything else you and the buyers need to agree on, and a copy of their pre-approval or proof of funds should be attached. The point is that you need to have reasonable certainty that the buyer is capable of closing the sale before you accept the offer.  

Dangerous Assumption #2:  If you are buying, don’t assume you can make your purchase contingent on the sale of your current property. Sellers in this area almost never accept that term. Figure out if you can go ahead with the purchase anyway or whether you are so sure of your financing that you can proceed regardless. 

Dangerous Assumption #3:  Don’t assume that accepting an offer but agreeing to continue to show your home won’t discourage prospective buyers from seeing it. It will have a “chilling effect,” although some buyers will come anyway.

Dangerous Assumption #4:  Don’t assume that once you have agreed on price and terms the parties are committed to the transaction. Not until there is a contract of sale signed by both buyer and seller and the buyers have submitted their deposit money (typically, 10% in this area) that your handshake is binding. Until that point, either party can change its mind without consequence.   

Dangerous Assumption #5:  Don’t assume that once you or your buyer is pre-approved either of you can change jobs. If you read the fine print in a pre-approval it will tell you that it is contingent on the status quo remaining in place. A job change during this period could jeopardize that.   

Dangerous Assumption #6:  Don’t assume that a pre-approval means you, as a buyer, are good to go ahead with the purchase. The pre-approval means that you are pre-approved. The other part of the process is that the house has to be vetted also, and this is done through the appraisal process, which is designed to protect your lender. So both you and the house need to pass muster in order for the bank to agree to make the loan, which it does by way of the mortgage commitment.   

Dangerous Assumption #7:  Don’t assume that everything will move forward as planned. Make yourself a timetable and monitor all parties to make sure they are sticking to it. It’s your money and your future at stake and you have every right to be involved and stay on top of everyone involved in your transaction. And be aware that in this area, either party can usually postpone the closing of the sale for up to 30 days without penalty, so remain flexible, make a contingency plan if there is such a delay, and stay focused on how happy you will be once the transaction closes!    

Pictured here:  Priscilla Toomey, licensed associate real estate broker, JD, ABR, Top5, certified EcoBroker, SRES with Julia B. Fee/Sotheby's International Realty, 2 Park Place, Bronxville, NY 10708; cell, 914-559-8084; email, CLOAKING .   

Photo courtesy Julia B. Fee/Sotheby's International Realty