Still a seller's market, but some home sellers getting burned

Still a seller's market, but some home sellers getting burned
When it comes to residential real estate, sellers are still in the driver's seat.

That's one reason many prospective buyers are nervous. In some cases, nervous enough to leap before they really look.

Brent Williams-Ruth and his partner knew they had a hot property: Two bedrooms, two full baths with a great living and entertaining space in the popular South Lake Union neighborhood of Seattle.

Offers for the condo came quickly. The first, which they accepted, came six hours after the home was listed.

"It was full cash," explained Williams-Ruth, "and they wanted a quick closing."

Full cash meant no need for an appraisal. They figured it was a slam dunk. They took the place off the market and started packing. No more lock-box on the door. No more keeping the place in pristine condition for showings.

Then a week later the buyer backed out. It turns out the overseas buyer was planning to use the condo as rental investment property and was concerned the condo association might change their rental policy down the line.

Williams-Ruth not only lost the sale, he lost other potential buyers by taking the condo off the market. What's more, the back-out buyer got to take back their $20,000 in earnest money.

Seattle real estate broker Shari Kruse says stories like Brent's are not uncommon.

You really have to have an agent that looks at all the conditions on your purchase and sale agreement," said Kruse. "Most purchase and sale agreements are really written in favor of the buyer, even if the buyer makes a full-price offer."

Kruse and other real estate experts say the current demand for homes has some buyers making offers -- just in case -- and then backing out when they change their minds.

You've got to scrutinize your buyers.

"Make sure that the conditions have been met. That the buyer has approved your disclosure form," Kruse stressed.

It's also important for buyers to make sure they understand the disclosures and contingencies in the contract. And even if you accept an offer, don't take it off the market. While you must clearly disclose that the property has a contract pending, keep showing it and accept back-up offers because deals can and do fall through for any variety of reasons.

Real estate experts say taking your home off the market before a deal closes can cost you tens of thousands of dollars in missed back up offers. That's why it's critical to get an agent who knows the market, is experienced with pricing properties like yours, and really knows what they're doing when it comes to details.