Real Estate Market Condition and Financing ClausesJune 18, 2016
With a shortage of inventory in the Boston luxury real estate market, there are multiple buyers for every property. Therefore Boston luxury homes buyers tend to eliminate their contingencies and take risks. This is partly due to the fact that buyers want the property badly and are anxious to get it at all cost and partly because some buyers are “cash buyers.”
As a result, Boston luxury homes sellers are getting more and more used to getting “clean” offers with NO contingencies. I’ve seen recently more resistance from buyers in the marketplace. Some Boston luxury real estate buyers are saying “enough”. They are not willing anymore to take risks and lose their deposits. They would like to proceed in the traditional manner and do their due diligence such as inspection or having a financing contingency in the offer.
However, Boston luxury real estate buyers are experiencing a push-back from the sellers not accepting these contingencies anymore, having been used to “no contingency” offers in the last couple of years. It is a challenge to convince a seller to accept an offer with a financing contingency and explain that it is not out of the ordinary. Granted that we haven’t seen it much in the offers in recent years, but nevertheless, it is not unusual and hopefully the sellers can get more accustom to it. Otherwise, we may run into many properties that may not sell otherwise.
Sellers and buyers have to adapt to changing times and market condition and show more flexibility. I had a coupe some deals fall through due to inflexibility and the properties stayed on the market for months.