Why it's a mistake to commit to a buyer too early

Private property sellers often make one mistake: they are too optimistic. This starts with underestimating the effort involved in a sale and often ends with committing to a buyer too quickly. This isn't a problem if the buyer is actually solvent and proves to be as reliable as expected. But things can also turn out differently.

The list of reasons why a potential buyer might back out at the last minute is long. Here are two typical examples.

Example 1: The loan has fallen through

During the viewing, the Bürger family was so enthusiastic about your property – you were immediately convinced you'd found the ideal buyers. The Bürgers were undoubtedly determined to buy. They would have been ready to pay your asking price without hesitation. So, in a fit of enthusiasm, you promised the lovely family your property and turned down all other interested parties to avoid keeping them waiting unnecessarily. But even the nicest families are dependent on the bank when buying a property; the bank has to approve the financing. As a self-employed individual, Mr. Bürger apparently also had an existing business loan, which he naturally didn't mention to you. The bank deemed the success of his small company too uncertain, and his available equity too low – and just like that! The dream of homeownership was over! When the Bürger family delivered the bad news, you even had to comfort them! Meanwhile, you yourself are now facing a complete mess and have to start the search for buyers all over again.

Example 2: The love affair has ended

A young couple, Nora and Frank, were determined to buy your property. You found them incredibly likeable, and they were so enthusiastic as they immediately started making plans during the viewing. They carefully considered how they wanted to design the rooms and where they would put the children's room. They thanked you profusely for letting them bring their dog along, as they were sure he would love the large garden. To demonstrate that you were dealing with financially sound prospective buyers, they brought along a wealth of trustworthy documents to the viewing appointment. Shortly afterward, Frank even presented you with his bank's financing commitment. What could possibly go wrong? So you turned down all the other interested parties. But suddenly—just before the notary appointment—Nora and Frank had second thoughts. They had reconsidered and realized the house wasn't quite the right fit for their current life situation. In other words, Nora and Frank had broken up. And you've learned another unpleasant lesson: buyers can seem ever so determined – as long as the purchase agreement isn't signed, they can still back out. Example 2 also occurs more frequently than you might think.

Even if it's not the easiest solution, it's advisable to stay in contact with other potential buyers, even after you've chosen one. Working with a real estate agent offers several advantages: you don't need to compile stacks of phone numbers and regularly contact potential buyers to keep them interested. The agent takes care of that for you. Furthermore, potential buyers won't feel strung along if a final rejection comes only after a considerable delay. After all, the agent can show them other properties. In addition, an agent checks the creditworthiness of potential buyers beforehand, thus saving you from unpleasant surprises.

Don't have the time to handle all potential buyers, conduct negotiations, and check financing options? Contact us now; we'd be happy to help you sell your property.

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Legal notice: This article does not constitute tax or legal advice for any specific case. Please consult a lawyer and/or tax advisor to clarify the facts of your individual situation.

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