I am new to this site but hope someone may have some advice. I listed my house for sale at the end of January and the first couple to see it made an offer that we accepted. The offer was conditional on financing and inspection with 7 days to obtain this. On the last day the buyers backed out with "cold feet" which really seemed to be a financing issue. Since then we have had 3 more offers which we have accepted that have fallen through because the buyers could not get financing approval for various reasons. Each time we accept an offer the house in effect comes off the market for 7 to 10 days while financing is sorted. Our agent says that what has happened is just bad luck but we are really starting to wonder - Is our agent doing her job!? After the first 3 offers fell through she said the market was falling and that we had to lower our price. We did so and the next day got the fourth offer which also fell through this week. I am more than a little unhappy and sick of going through this over and over. Is this a normal situation or is something wrong? How can people keep making offers on houses they can not get the money to pay for and should our agent be doing something to prevent this. I would be happy to hear some opinions on this because everyone we know is telling us to find a new agent.

if the next offer is not at asking price, dont except it. Maybe, just maybe a serious buyer will come back with full price offer...thus may turn your luck around and put you at ease that they can qualify, and do want to purchase...just a thought.

What rotten luck! Four!!! That's really weird! It is not likely the fault of your listing agent.

Afterall, she isn't the one bringing the unqualified buyers - it's the buyer's agents that should be making sure their clients can afford the place before even setting foot in it.

I always ask my buyers to get pre-approved for a mortgage before we go out looking at places. It saves this kind of situation from cropping up.

That said, with prices being so high these days many buyers are not really fully aware of what they can and can't afford. Often, they tell their buyer's agent they "think" they can afford $X, but when the mortgage approval is submitted it comes back lower than they'd expected. Again, good reason for a pre-approval.

The good thing is that your place is desirable and obviously priced right (read: your agent did her job pricing it correctly) since it's had 4 offers!

The bad news is that these offers have all died on you.

That isn't something your agent can control. I know it is frustrating, but don't blame your home team! Blame the other side - the buyer's agents that are bringing unqualified buyers into your home and wasting your time and money.

I hope you get another offer soon and that it goes through for you. Good luck!

Thanks for the input. I was wondering what our agent could have done about this situation. She seemed to trust the agents on the other side and even let the last one know what had happened to us in an effort to ensure it didn't happen again. I guess it really is bad luck.

How about only accepting offers from buyers who are already pre-approved? That way your house isn't off the market for a week only to find out the buyers can't obtain financing.

We thought in some of these cases that they were pre-approved but it seems that the pre-approval that a bank might give you over the phone is not always what you are allowed when you actually provide all of the specifics of your financial situation. I think some of these people may have been about as up front with their banks as with us! I think that you are right though - we will have to insist on financing being in place before we accept anything - otherwise I am sure agents will start to wonder why the house has been conditionally sold so many times without going through.

One further question. Since we have had 4 offers with the latest last week, would you say the price is right? We have the feeling that because the agent is getting a little fed up that she will suggest another price drop. We are not overly happy with doing this but would like this to be over sooner rather than later as we are building a custom home that is set to close mid July.

As an agent normally representing the Seller, I almost always counter, with the condition that the buyer authorizes lender to release any and all information regarding the loan application to the seller's agent.
Your agent then may be able to decipher the credit app or find out exactly where the loan is in process, etc. and Always be prepared to go to plan "B".

[QUOTE]Originally posted by unhappy in ontario:
[QB] We thought in some of these cases that they were pre-approved but it seems that the pre-approval that a bank might give you over the phone is not always what you are allowed when you actually provide all of the specifics of your financial situation.


There is a difference between being pre-qualified adn pre-approved. Pre-qualified is just giving someone your information and they do the math to figure out what you can afford. You want buyers that have been pre-approved, meaning their loan officer has verified at least some of the information they have provided and pulled their credit report. Of course, things can always happen to make a deal fall through, but it's best to start with a buyer that has been pre-approved.

If you have received 4 offers on your house that were close to asking price, I'd say it's priced right.

You may want to tell your agent to stipulate to all buying agents when submitting offers to submit a Pre-qulified letter and nothing less. This may cut the waste!

Is it possible that your home is priced higher than the lenders appraisals? It would seem to me that there is some common reason why 4 deals fell through.

I am not sure that our house is priced higher than the appraisals. It is selling at the same price as others in the neighbourhood even though we have many more recent upgrades such as a pool and extensive landscaping and a newly renovated ensuite bath and new very high end kitchen. The house is also full hardwood floors. The others in the area don't have any of these things and some are even priced higher.

The reasons we have heard for financing falling through are also different in each case. Two of them were situations very specific to the buyers. I guess the only things we are not sure of is if we can believe what we have been told.

Unhappy –

Sorry you’re having so much trouble.

There’s no advantage to an agent making up reasons for the deals to collapse.

And 4 buyers agents didn’t intentionally waste their time either.

Did any of the Buyers carry out the home inspection ? Just wondering.

It sounds like you feel your home is priced to the market, maybe even showing better value than the competition, which is a good thing. The fact that you’ve basically had buyers standing in line for the last week tells me the market feels price is not an issue.

However, you may want to look at sold prices for similar homes – your agent can do this for you. If your market has experienced a quick jump in values – the homes currently for sale may be priced expecting that trend to continue. An appraiser looks at what buyers have paid – not what sellers are asking.

In certain markets – entry level and move-up homes have gained so much in value that the families that would want to buy them are reaching to their limits to make a deal. If the home is priced above the recent sales – (not over priced) - and if the buyers are at their maximum – there may be a void between the banker and the appraiser that can’t be filled. Young families with huge mortgages seems to be a trend – some get scared.

If that’s the case - you wait for the market to support your price – or you lower to allow the appraisal to work. It depends on you situation.

Cheers and Good luck -------- Happy April Fools Day Dave

Thanks for the input. On the inspection issue, the people who made the first offer did do an inspection that we did not hear the results of. Because we were worried that there might have been something there that we did not know about we hired an inspector ourself - the most respected one in the city who is also an engineer and the former head of engineering at Carleton University. He said that the house was in very good condition for its age (12 years) and that things such as the roof, furnace etc. were so well maintained they should last longer than the usual expected life. All in all he thought it was a great house in great shape and he was particularly impressed with the level of upgrades.

As for houses selling in the area/price range, it would seem that from what we have heard our house is the most desirable and the only one getting offers. Some have sold at both higher and lower prices but they are all different so I am not sure how to compare. We have been told by our agent that our location is better than the others for sale in this range right now.

It certainly sounds as if you have a great house in a desirable location that is probably priced competitively. If that is true, then you need better qualified buyers!

I second the idea of requiring a lender letter with any offer; not a prequal and not from a broker, but a full fledged commitment letter from a lender who has verified credit, assets and employment. Will it limit the number of offers? Yes, but offers are of no value if the buyer doesn't have the means to purchase your house.

Granted, I'm in a market where I don't write an offer without a lender commitment, but even in other markets, this is a good idea if you want to avoid wasting a lot of time. Sort of separates the wheat from the chaff, as they say.

Unfortunately, In Ontario the financing process is different.

The banks don’t commit to a specific home until an agreement is in place.

Even if a person is “pre-qualified” or “pre-approved” the banks will not commit without examining the documents and the property the mortgage will be registered against.

That’s likely where the deals are falling apart. In some parts of the market – home values are going beyond the buyers ability to pay.

It’s a very bad sign.

We’re seeing more and more buyers using the 95 % or even 100% financing options just to get into the market. Banks are being very careful about how they put these deals together.

Having associates in the Ottawa area I know the market is nuts right now - Not knowing the price range, I can only assume your stuck in the area between desire and affordability.

Every area has a ceiling for CMHC financing – if you’re on the edge of the max., and offering great value you may be attracting too many people who “just can’t quite put it together”. It may actually be to your advantage to raise your price, eliminate the borderline shoppers. You will reduce the pool, but may get better qualified buyers looking. Again, it depends on your situation.

……………. Dave

That's interesting and very different from this area, where the lender commits to the client, not the property.

Of course, we have a contingency for appraisal, which can be waived by the buyer (but the appraisal will still be done; it's just that if the property doesn't appraise, the buyer will pay the difference as the lender will not finance it).

Still, you're saying the lenders will not even do a full approval on the buyer without knowing the property? That is tough on the sellers!

Sorry - I guess I didn't say that very well.

Up here the lender will commit to the buyer – but only after they have satisfied themselves that the investment is sound.

That’s exactly what I think the problem may be. Not all buyers can fund the difference. Young families, move-up buyers with limited cash coming in may not be able to bridge the gap. We see lots of buyers with good incomes but minimal (sometimes no) cash.

............. Dave

Just read about this 7 streak losing effort...what a fiasco.

Although I do hope it sells..its never as easy as putting a sign in the lawn.

Since you now seem to have a preinspection done, relist and start from scratch. Every home seller I deal with gets pre-inspected upfront due to the collection of stories like this I have in my presentation.

As far as pre-qualified goes...that can change with the wind. You want 2-3 days max for financing and a good chunk upfront for deposit. Make sure the bank's value of your home is within 10% of yours.

Thanks for the input. Are you suggesting we switch to another agent and re-list? We had the inspection done within the first few weeks of listing and after the first deal fell through. Every buyer since then has used the inspection report and not opted to do their own.

As for the bank's value of the home we had it appraised about a year and a half ago for the purpose of a line of credit to finance our new construction. While I know prices have gone up since then and we have made further improvements to the house since that time, we are still within 10% of that appraisal.

Also, what are the implications of going with a new agent. When we listed our agent told us that we could get out of the deal at any time if we were not happy. However, two questions come to mind -- what happens to the deals that have failed but not totally. In the cases of two offers the buyers say that if they can get their financial matters straightened out they will back with unconditional offers. One of them has even gone so far as not to have signed off the mutual release and taken his deposit back even after over a month has passed. Given the amount of time I am not sure he will be able to do it but I still wonder. Also, what is the deal with the holdover period? Even though she lets us out of the deal, is it normal to insist this continues?

Whoa, it seems like not much was explained to you upon the signing of the agreement. Ethically speaking, your agent owes you 4 things: competence, obedience, good faith and disclosure and accurate accounting.

Your best bet is talk to the broker and mention "specific performance" and how (it seems) that you were not properly trained for this event.

No agent can control who other agents show your home to, or weather those people are able to buy your home.

You have been exposed to the open market and received a number of offers from sincere buyers. In Ontario as a matter of standard practice, finance conditions are not written with escape clauses.

It sounds like your agent has done a decent job so far. What could another agent have done differently ?


You can’t be half pregnant ....... You either have a deal or you don’t – as per the language in your agreement - after the conditional period, if the conditions are not satisfied – the agreement collapses and the buyer’s deposit is returned – without interest or deduction. The mutual release is simply the 2 parties to the contract (buyer & seller) giving the broker the authority take the moneys from the trust account. It has no bearing on “keeping the deal alive”.


The hold over clause will only apply if you don’t relist your home with a realtor at the END of this listing.

Also ... "Specific Performance" is asking the courts to force someone to fulfill their contractual obligations – but if the offers don’t firm up you have no contract - I don’t see how it has any relevance to this discussion.

Hope this helps ........ Dave

I agree with everything you have said - I am not sure if the agent could have done more on any of these deals. Also, on the mutual release, we have also been operating under the assumption that it does not matter because we accepted another offer while the other person's unsigned release and deposit were still sitting there. I guess I wonder why someone would leave the deposit there. In any case we consider the deal dead but you never know. On the specific performance issue I also agree and was puzzled that it was brought up because I wondered performance of what? Once they say they do not have financing, then there is no deal.

The one thing I was interested in though is that the holdover period does die with the end of the listing. We were clearly told that we could back out at any time and to my mind cancelling the agreement means cancelling the whole agreement - holdover clause and all. If this could not be done then why would any other agent want to take our listing -- this is what concerned me.

Anyway I am not sure what I want to do with all this. Clearly, the fact that the house has been listed for 2 months and has not sold is of concern as it may appear stale to new entrants into the market. If they knew the whole story they would know that it is not a "problem property".

Thanks for the clarification, Dave. We run into the issue regarding appraisals here all the time and it is a big problem for first time home buyers who do not have enough cash.

For those who have enough cash to make a substantial downpayment, then the appraisal is not usually an issue, but for those who want to use 100% financing or only 5% down, they are typically out of luck as many offers do strike the appraisal contingency, which these buyers are not in a position to do (unless they are feeling bold!)

So, Unhappy, do you know if the appraisal has been an issue for any of these buyers? I think you said the issue for a couple of buyers was specific to the buyers (which sounds as if they possibly were not qualified to buy the house in the first place), but what of the others? Did the house not appraise at your selling price?

I think the appraisal value is actually very close to the selling price on the house and no one has brought it up as an issue. The last two deals with the odd circumstances involve someone in the midst of a divorce who is not yet able to officially prove to her bank the amount of money she will take from the sale of her house. We have been told that even though her house sold for more than twice the price of ours in another market, without some confirmation from the lawyers involved in the divorce the bank will not approve financing. The other case involved a very young person with a 30% downpayment but no credit history - the bank was willing to give him a mortgage but at almost twice the going rate. The other two circumstances were equally unique.

If the appraised value had been an issue would the buyers not have raised it and tried to have the price adjusted?

Yes, I think you should have heard (or your agent should have found out)if the appraisal was an issue in your case. With that said, it seems to me (and bear in mind, this is just my perspective, based on how things are in my market, so take it with a grain of salt), that no one has yet delivered to you an offer from a qualified buyer, which is a reflection, quite frankly, on the buyers' agents as well as the listing agent.

I would consider neither of those two people you described above as qualified to buy your house and neither should their agents.

I realize markets are different, so the ways real estate agents work in your market may be different, but at the end of the day, a good agent should not be wasting time writing offers for people who are not qualified to buy a home.
And they should know that before they put them in their car.

If they want to ride around showing them neighborhoods and houses -- and have that kind of time on their hands -- that's their decision, but they should know better than to write offers their clients cannot fulfill.

As a buyer's agent, I would not have been out showing houses, much less writing offers, on behalf of the first client, who was not even in a position to get a mortgage right now, it appears, nor would have I have been showing houses to the second person, who despite having a down payment, was not able to get a mortgage at rates acceptable to him. All of these factors should have been discovered by the buyers' agents prior to ever showing them anything.

Further, as a listing agent, I never consider an offer until I have had a long discussion with the lender qualifying the buyer. Now, again, I realize not all markets are the same, but honestly, I would expect a listing agent, regardless of the market, to do some due diligence in determining whether or not the offer is coming from someone who has the means to fulfill the contract. To me, an offer from someone who is not qualified to buy your house is not an offer. It's just a waste of time.

While it appears you have certainly had your share of unique experiences, at the end of the day, they all share one thing in common: all of the offers came from people not qualified to make an offer in the first place. If your house inspects well, is well priced and *should* be selling, then your house is not the issue.

p.s. I realize I should have worded something differently -- as a listing agent, I would have done some due diligence before advising my client, not before considering an offer. It would not be the listing agent's offer to consider, of course...my fingers were going a little faster than my mind!

Is your listing agent doing any targeted marketing of your home? If so, perhaps that is not quite hitting the right target.

On average, in our market, anyway, people typically move up 1.5x the value of their existing home (from $400,000, for example, to $600,000). And, typically, statistically speaking, people who call on your house from a sign cannot afford it; people who call from an ad can afford more. It may be the LA's marketing plan needs a little tweaking in order to assure you are getting truly qualified prospects.

As far as I can tell the listing agent has no plan and that is what we are a little frustrated with. What she seemed to be relying on was calls based on the sign. We live on a crescent and not a main street so that surprises me. We went with her firm because they apparently had contracts for relocations for several large employers in our area. We have not seen any business from this at all. The explanation we have received is that the transfers which should have happened in March are not happening until April. In all, of all the people who have seen the house, her group has only brought us two people.

What should we realistically expect in terms of a marketing plan? All that we have seen is an ad for the house in a real estate paper for the province and the MLS listing. I have not seen it in the newspaper ads or anywhere else. When we ask what she is doing she says there is a lot going on behind the scenes that we do not see. However, we have to prompt her to follow up with other agents such as the offer that fell through last week to see where they stand (we have done this because they said they were trying to sort out the issue with the lawyers and would come back with an unconditional offer once it was sorted). We are at the point now that if we do not see any positive effort on her part over the next week, we will have to find another agent. My husband is also at the point of not believing what she tells us and I don't think that is a good situation.

Some agents take a more passive approach than others; by passive, I mean putting a listing in MLS, putting up a yard sign and running an ad in the paper. Okay, so how is this different than what one could do themselves??? Clients rely on agents to do what they cannot do themselves!

Ads and signs typically account for less than 10% of sales. Open houses often offer a plethora of opportunities for agents to pick up new clients, but don't sell houses more than 10-15% of the time (these are regional figures, but I suspect they apply somewhat uniformly).

Broker opens work extremely well for me because I want to expose my listings to agents who have qualified buyer clients and I want multiple contracts coming in on my listing for my seller's sake. I find that if I do a broker's open house, I have a contract before I have a chance to do a public open.

I do "frequent flyers" (not necessarily available in your area, but it's an idea) -- a relatively low cost way of sending a flyer out about YOUR house to every real estate agent in the area. The agent provides a flyer, the advertising company distributes it to each agent. This is usually done in correlation with a broker's open.

I would do postcards to targeted neighborhoods where I think there is a possibility of someone "moving up" to the neighborhood where I have a listing. In other words, if your house would be suitable for someone who is perhaps starting a family and needs a little more room or wants an established neighborhood, I would target families in smaller, started homes...whatever the demographics suggest. (I say I "would do" because in this market, I have not had a listing last long enough to get a postcard designed and in the mail before the listing went under contract, but if things start to slow a little, I would definitely do direct mail).

Phone calls, emails or faxes to every agent in town describing your home is a good start! Phone calls to appropriate neighborhoods is also effective (and a good way for an agent to pick up a new listing, perhaps).

It is entirely possible there is a lot going on about which you are not aware - fine - BUT ask her to sit down with you and outline in great detail what exactly she IS doing to generate interest. Perhaps she is waiting for the transfers to happen, but for what it's worth, my opinion is you should never "wait" for anything to happen. You MAKE it happen.

At the very least, have her sit down in person with you and tell you exactly what she is doing, what she HAS done and she plans to do.

Don't accept "behind the scenes" as an answer. That's like my scheduling an appointment for mid-day because I don't like getting up in the morning, but telling the client I have a morning appointment! (Yeah, with the pillow!) It's very easy to create a flurry of activity when, in fact, it may not be activity which is effective.

Next offer you get, counter it with the clause that the lender is authorized to release any and all information requested by you or your agent. Then you will find out the "Rest of the Story"

SusanScuba,

Wow, I wish you were in this market. I asked our agent at the beginning about an agents open house because I had heard that was the first marketing opportunity. She said "We do not do that anymore". I was surprised and asked why and she said it was because of the hot market - there was no time for that. Well, it turns out that the market in our area, although hot for the last two years, is dead this year - or at least that is what we have heard from her and a few other agents in the city. I think we will take your advice and call her on this and ask her again about her plans. My husband asked her Friday and all she said was that we had to be patient with no indication that she would do anything but sit and wait. She was supposed to follow up with two agents who dealt with offers that had fallen through but were in the process of trying to sort out the difficulties. Because she had done nothing as of the time my husband called her this morning (she had been out of the office since Friday morning and was only back at 11:00 am this morning)he got on the phone and called the other agents and got more information than we had ever got from her. She keeps saying she can't get hold of them but twice now he has picked up the phone and been able to talk right away and candidly with both of them. We really wonder why we have her at this point!! Because both of the agents he spoke to think that their clients problems should be cleared up by the end of the week, we will give it until then but if things don't materialize or she continues to fail to follow through I think she will be history.

This whole experience has left us quite bitter. We have done everything that everyone says you have to do to sell a house - it is magazine quality with new kitchen (dark cherry with built in Europenan appliances) and bathrooms, pool, extensive landscaping and decorated to match the taste of the most discriminating buyer - which is what our listing says, along with the fact it is the best the agent has seen (again words taken from the listing). I know that most of this is fluff but clearly it is more than your average house and much more than what you would see in the area in which we live. So somewhere something is wrong - unfortunately we fear, it is our choice of agent.

Anyway sorry for the rant but it is all very frustrating. Thanks again for your advice. And to those who have commented on financing, I appreciate your thoughts but if you go back in this web to comments by other Canadian agents, things unfortunately do not work the same here as in the U.S.

There may be a few variables working against your right now. With regards to appraisals, in our area we are seeing less homes appraise for the selling price, the appraisal community has been front and center in the news of late and I suspect are being a bit more cautious in what they produce.

Mortgage companies have had a short history of defaults on loans that are just starting to drop. However, I suspect the sting is still there in their approval process.

If your home is considered to be in the range of starter homes in your area, which I haven't seen indicated yet, the buyers agents are probably bringing first time buyers, or marginally pre-approved buyers. With the recent uptick in interest rates, the lower end of the mortgage business is effected greater than the rest. An increase of 1/2 a point is not such a big deal for a high end or middle cost mortgage to swallow, but the lower end of the mortgage business has a hard time swallowing that big of a jump in a mortgage.

Hence, I suspect, along with the other things I've seen mentioned here, you have several potential problems to overcome.

You may want to consider having a clause put into your contract that requires a buyer to provide written proof of a failure of qualifying for a loan so that you will be able to see exactly what the issue is.

Price drop will certainly allow more buyers to qualify, at your expense. The other option is patience, to allow the right buyer to come along.

It sounds like your agent has done a good job of bringing you buyers. I would encourage her to do more of the same and work with her in her efforts.

Best of luck

I had to laugh about not doing opens in a hot market. I'm not sure any market is any hotter than our market right now (DC area). The holy grail for us seems to be getting the days on market to equal 0. ;-)

It's a little stressful at times when you're working with a buyer because you literally have to drop what you are doing to scramble to see the property and write an offer immediately...

I had this happen on Friday; a property went on the market Friday at 3. By 4, I was at the house with my buyer, in the office within the hour writing an offer, which we faxed over within a couple of hours of seeing the house. On Sunday evening, we had a ratified contract, for which we were very grateful as it was a competitive situation.

Anyway, sorry I digress, but the above is to illustrate how our market is moving and WE are still doing Open Houses! LOL

Hopefully you'll get your situation all sorted out, but it does sound as if you are doing all the right things...and your house sounds gorgeous!!!!