Why have so many deals fallen apart this spring? We watch the market and see homes that sell and then come back on the market – what is happening?
You have unknowingly picked up on one of the flaws in the Pennsylvania Standard Agreement for the Sale of Real Estate. In the inspection contingency contained in this agreement, the buyer has the unilateral right to terminate the agreement of sale if they find any condition in a home inspection unsatisfactory to them. It does not have to be a major defect as it did in prior years. It does not have to be a safety related concern. It does not have to rise to a particular threshold of cost to repair. ANY condition whatsoever that they find unsatisfactory – a scratch on a floor, a dented garage door, a stain on a carpet — and they can terminate. They do not need to give a seller an opportunity to repair the item – they can just say “sorry, we don’t want your house.” They get their hand money back and the home is back on the market.
Unfortunately, this year buyers have begun to abuse this right to terminate, treating it like an option to buy a home. And when they do this, it stigmatizes the home for future buyers. I have seen deals terminated for items as simple as non-operational dimmer switches and puddles in the driveway, without giving the sellers the opportunity to repair. In other words, these are not serious buyers, and something they liked more probably came on the market. They terminate, wasting everyone’s time and energy.
This is a terrible trend, but sellers, you don’t need to sit back and let this happen. When negotiating an offer on your home, you can negotiate any term, and you would be well advised to indicate that buyer’s right to terminate before even asking the seller to repair should be stricken from the agreement. The buyer is still protected because they retain the right to terminate if the seller refuses to make the desired repairs, but this solution provides a more appropriate playing field for all parties.
REAL ESTATE SERVICES
401 Broad Street
Sewickley, PA 15143
Office: 412-741-2200 x238