How to Prevent Transactions from Falling ApartNov 16, 2023
The buyer backs out at the last minute for no apparent reason. The appraisal comes in lower than last year’s comps. The inspection report is 182 pages long and neither side wants to negotiate. The untrained co-broke agent forgot to …
I hear this all the time on our coaching calls. And no doubt about it, when a transaction falls apart, nobody’s happy. The seller is back on the market. The buyer is out looking again. And the income you were counting on is delayed at best, and disappeared at worst.
The latest statistics nation-wide show a fall-through rate over 17%.
That’s one out of every six deals that doesn’t make it to the closing table. Lives interrupted. Relationships damaged. Lots of people really, really, really disappointed.
Benjamin Franklin famously advised fire-threatened Philadelphians in 1736 that, “An ounce of prevention is worth a pound of cure.” Clearly, preventing fires is better than fighting them, but how do we protect ourselves and our clients from disaster?
In short, it looks like you can’t. It’s just part of the landscape, part of the job description, cleaning up other people’s messes.
Here are 5 pieces of advice from a recent coaching call with our clients.
- Build a factor of fall-throughs into your business plan. It won’t prevent them from happening, but when they do and you have anticipated them, they are much less psychologically and emotionally draining. And set aside a portion of your commissions as a rainy-day fall-through fund.
- Verify everything. If you are told that the buyer is pre-approved, verify it with the lender. If you are reassured that the title work is being done, verify it with the title company. Got it?
- Take over. You may have to work both sides of the transaction. In the case of a new or untrained or incommunicative co-broke agent, you may have to do parts of their job, just to be sure. Better to step lightly on a few toes and apologize, than end up with egg on your face because of something someone else didn’t do.
- If you see something, say something. In other words, intervene at the first sign of a hiccup. And keep everybody in the loop. When forward progress toward closing happens, let everybody in the transaction know. And vice versa. When a stumbling block appears, get the word out. Someone else may have a quick solution.
- Beware of scams. Lots of these around lately, especially with so much of what we do being done remotely and digitally. If it sounds too good to be true, it probably is.
In Marvin Gaye’s classic Motown hit, I Heard It Through The Grapevine, he sang, “Believe half of what you see and none of what you hear.” I think Marvin and Benjamin were on to something with their advice.
We may not be able to eliminate fall-throughs completely, but with a little vigilance and forethought, we might be able to get a few more all the way to closing.
One of the best ways to get more is to lose fewer.
The Floyd Wickman Team Blog by Mike Pallin
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