My Friend Wants to Buy My House…

Pictured home: 79 Halaulani Pl. Hilo, HI 96720

When your guests visit they always sing high praises for your house. In fact, one couple loves it so much that they’re emphatic about wanting first crack at it if you ever decide to sell. Naturally, they are so impressed with the house that you don’t expect them to quibble about the price…that is, if you EVER decide to sell. You aren’t surprised. After all, you have put lots of love into your home and as far as you are concerned it’s perfect. It should fetch top dollar even in any market. Trust me, I know the entire conversation by heart!

Don’t Delay…

Unfortunately, when the time comes to step up to the plate, most who expressed interest aren’t as sincere or as capable as the seller hoped. With visions of saving commissions dancing in their heads, sellers often want to delay listing until the prospective buyers make their final buying decision. Because this day may never come, it’s good to know there’s a reasonable solution that will allow the property to be listed while at the same time preserving the right to sell to someone who expressed interest prior to listing.

Act Now…

In other words, there’s a simple way to have the best of both worlds. After all, keeping the property off the market when you really need to sell isn’t the best way to move toward your selling goal. While our standard listing agreement isn’t structured to make such an accommodation, sellers can usually request that their agent include a specific prospect as an “exclusion” to the listing agreement. Simply inserting the prospect name as a special term which notes that “no commissions (or reduced commissions) will be due if sold to “x,” should be enough.

Time is Running Out…

But don’t expect the exclusion period to last forever. Because I start spending money the minute a listing is signed, I generally limit the exclusion period to 60 days or less. This should be ample time for a potential buyer to decide if they want to move forward. In fact, knowing the property is listed on the open market should actually motivate them to perform. Also, a notation should be made in the Multiple Listing Service that parties are excluded on the listing agreement. Cooperating agents should know that commissions won’t be paid for designated buyers. After all, your “friend” is probably looking at other properties with an agent while they are considering yours.

Wait, There’s More…

But here’s the thing. Even (or especially) in today’s market, finding the buyer is still the easy part. The things that must happen to hold a transaction together once a buyer decides to commit have certainly not gotten easier. Loans have gotten so complicated that choosing the proper loan program and lender from the get-go could make or break to the transaction. Even cash purchases can have major challenges. The thing is that when roadblocks appear, sellers don’t hesitate to call their agents for advice. They forget that answering seemingly innocent questions could establish an agency issue and create liability for the agent.

Agents must be very cautious about how involved they become when they represent neither buyer nor seller. Still, excluding specific buyers is the most reasonable way to begin marketing the home while waiting for them to make their purchasing decision. After all, if the property is not on the market, your friend is basically the only one who CAN buy your house…no one else will even know you decided to sell!