Eric P. Feichthaler

Mr. Feichthaler:

I have had my house on the market for about four months now. I accepted two offers, only to have them cancel at the very end of the inspection period. I really need to sell the house and find a legitimate buyer, any suggestions on how I can do this?

Steven N.

Dear Steven:

I have many clients in this same position. There are so many “investors” out there looking for a deal, they will indiscriminately make offers on hundreds of properties in the hopes they can flip it prior to inspection ending. As a result, the seller removes the property from the market, the buyer often cancels and disappears and you are back to square one.

There are several steps you (and your Realtor, if you have one) can take to protect yourself from these types of buyers, and to complete your transaction in a timely manner. First, requiring a reasonable escrow deposit is important. If you are selling your home for $500,000, and the offer includes a $1,000 escrow deposit, this is a sign your buyer may not be a serious one. As a rule of thumb, for a home, I would require 5%, and no less than 3% under any circumstances. A reasonable escrow deposit tends to show a serious buyer.

Second, only allow a reasonable inspection period for the buyer to determine they wish to proceed. The typical time period for a home is 14 days, which provides the buyer plenty of time to have inspections done, check with the city on any issues that may impact the property and to make any other investigation they wish. Buyers requiring 30, 60, even 90 days often want that time just so see if they can flip or assign the contract to another buyer.

Which brings me to another thought. If you have a serious end-user buyer, they will not require that the contract be assignable at all. If the buyer is willing to proceed with a contract and make it unassignable, this is a strong indicator they actually want to buy your home.

Another strategy you can employ is to require a certain amount of the deposit to be non-refundable after the inspection period is complete. This can be particularly important if the buyer is requiring a long closing, like 60-90 days. If a portion of the deposit is nonrefundable, this can at least pay for your carrying costs for the home while it is off the market. Only serious buyers will agree to a portion of the deposit being non-refundable.

There are other options to consider. I remind all clients that the contract is THE way to protect yourself, and your sale, from a wide variety of problems. You can negotiate any term that benefits you if the other party agrees. It may take a little longer to find a quality buyer, but this will save you time and money overall. Good luck!

Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Cape Coral to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, and Cape Coral Kiwanis. He has been married to his wife, Mary, for 22 years, and they have four children. He earned his board certification in Real Estate Law from the Florida Bar, and primarily practices in real estate law and wills and trusts. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney.com, or 239-542-4733.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.