You’ve negotiated terms of the sale of property and the property is now a pending sale. How do you move from a pending sale to a successful closing? Bob Nelson, Eugene real estate investment broker with Pacwest Real Estate Investments and Marcia Edwards, Eugene residential broker with Windermere Real Estate, break down the process of a successful closing in a five-part series.
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As a seller, you expect when you go off the market that the buyer will deliver as promised—with the terms and price that you have arranged. In fact, things rarely happen exactly that way. A buyer may make an offer and then later discover that there are issues concerning the property. In that case, the buyer would request a price reduction, because they would need additional money to address those issues—money they hadn’t factored in when they made the initial offer.
The Discovery Process
Bob Nelson, Eugene Commercial Real Estate Investment Broker:
What you can tell a buyer about your property early in the discovery process will help get you to close of escrow. It is important to present the property to attract the right buyer. Be upfront: If this is a fixer-upper opportunity, you don’t want buyers that are looking for a turn-key ready or hands-free investment.
If you present an investment property to the market in its exact as-is condition, you would scare away the majority of buyers. Instead, think about presenting it differently: as a fixer-upper opportunity. Yes, it’s a bit beat-up, but if you acquire the property and apply your talent and your money, consider what you might be able to do.
Buyers do not like to discover surprises as they’re doing their due diligence in the pending sale phase. This often sets the scene for stressful and uncomfortable negotiations that are likely to fail.
The Due Diligence Period
The due diligence period is financial, especially in investment real estate. It’s looking onsite at the property, and it’s looking at the title report to see what is attached to the property as an obligation.
In addition to that, buyers of an income property need to evaluate the leases to ensure that those in occupancy and paying rent are paying rent in accordance with a contract that the buyer approves of. The financial side is most significant for an investment property to ensure the property is delivering what the buyer perceives is being delivered at the outset of the opportunity.
The Pending to Closed Sales Successfully Series is from Bob Nelson and Marcia Edwards “Real Estate Today ” Eugene, Oregon, radio show, which airs at 5:30 daily on KPNW.