Sometimes agents sell a home before they submit it to the MLS. This is known as sold before processing. These transactions can get complicated, especially when one agent represents both the buyer and the seller. Inventory remains low in premier Los Angeles markets such as La Cañada Flintridge, Glendale, La Crescenta-Montrose, Burbank, and Pasadena. As a result, buyers and agents compete aggressively for available homes.
I recently listed a probate sale home in La Crescenta. The owner has passed away.
As most sellers tend to do in this crazy real estate environment, we started preparing the home for sale. We hired a gardener to get the lawn in shape. Then arranged to have the interior painted and the outdated exterior peach trim repainted.
We took action by placing a For Sale sign and adding a Coming Soon sign rider, and the result was a constant stream of phone calls. Almost every real estate agent in town had a buyer eagerly searching for a La Crescenta home. While we preferred to avoid frequent visits during the painting process, one resourceful real estate agent from a different brokerage managed to gain access. The buyers represented by this agent submitted a non-contingent offer.
This particular La Crescenta home buyer took the bold step of waiving several contingencies. Firstly, they waived the loan contingency. If you have obtained prequalification from a reputable lender, this poses minimal risk. Additionally, they waived the appraisal contingency, which would require an increase in their down payment if the appraisal came in low. However, their most significant commitment was waiving the investigative contingency, which pertains to the home inspection. Once the buyer’s earnest money deposit entered escrow, it became at risk if they failed to close (due to the non-contingent offer).
It’s much easier for a Realtor to advise a home seller how much to list for than at which price the home will sell. Many homes in the Los Angeles Foothills, San Fernando, and San Gabriel Valley are selling 5-10% over the asking price. So why did the executor accept this offer when I told him he might likely sell for more?
- We didn’t have to continue sprucing up the home and saved a few dollars here.
- We didn’t need to wait until the work was done, send a professional photographer, and then get listed in the MLS. We sped up the timeline by about a month.
- The home needs updating; there could be plumbing, electrical, or other issues that would become known during an inspection (remember the buyer waived this contingency).
- When a homeowner dies without a trust, the process becomes lengthy and complex. The executor grew tired of the delays. He wanted to move forward and close the estate. He pushed for a faster sale to settle the property and get on with his life.
Buyer takeaway:
- If your Realtor isn’t out there every day searching for your home, fire them and find another real estate agent. Read the Top Ten Reasons You Should Fire Your Realtor
- Your Realtor should be local with good relations within the Realtor community. If you choose to work with an annoying or slacker Realtor, don’t be surprised if your offer gets passed by.
- The seller (in my situation the executor) calls the shots. I had a marketing plan. I knew when we would be live in the MLS and when I was going to hold the home open. But as soon as this offer arrived it was my fiduciary duty to present to the executor. Just because the listing agent has a plan doesn’t mean it can’t or won’t vary. This agent took the time to write an excellent offer – an offer the seller didn’t want to refuse. The real estate agents and buyers waiting for the open house and my timeline sadly missed the boat because the seller had other plans.
