The period from the moment that a seller accepts an offer for the sale of real estate and a contract is signed and delivered can stretch for weeks in New York.
Factor in the time that can pass before the transaction is completed and months can pass. The variables include the approval process by a co-op board as well as the diligence that lenders require for clearing the release of funds before the deal can close.
Anything can happen until settlement, so sellers and brokers are constantly on edge.
If the transaction doesn’t close for any reason, sellers lose a great deal of time in a market when older listings may appear stale just because the clock keeps running on number of days on the market. To buyers, “stale” translates into desperation and desperation becomes a potential bargain.
A failed transaction can cost sellers plenty besides time — for example, money and the cancellation of plans that are as relatively minor as moving arrangements and as major as a closing date for their new home.
For insurance, many brokers like to keep showing properties that have accepted offers and even are under contract. In the time it takes for contracts to be executed here, perhaps a week or two on average, the danger is especially acute that a buyer experiences remorse and all is lost.
We brokers debate among ourselves how long is appropriate to keep showing a property, given a seller’s commitment to a buyer. The period from the moment that a seller accepts an offer for the sale of real estate and a contract is signed and delivered can stretch for weeks.
(Representing buyers, we sweat whether a better offer that comes along in the interval between offer acceptance and signed contract will cause a seller to pull back.)
In my view, it is fine to continue to allow prospective buyers to see a property right up until the closing.
But I have two conditions:
- The status of the property — accepted offer, contract signed, awaiting board approval — absolutely must be kept up to date (and often isn’t, despite rules by which members of the Real Estate Board of New York are supposed to abide);
- Through the selling broker, buyers must be informed of the open door policy, at least as a courtesy. Such communication also has the advantage of inoculating sellers against any retaliatory measures that upset buyers may pursue, including withdrawal of an offer or an attempt to void the contract.
Although some buyers and their representatives may feel uncomfortable knowing that the property they want seems to remain on the market, sellers have a right to protect themselves against the real possibility that buyers and banks often have a way of changing their minds.
It’s a rational way of dealing with a situation overflowing with uncertainty.
Tomorrow: Manhattan’s housing market is boring?
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022