Salvage a failing real estate deal with these 3 tips

The coronavirus pandemic continues to affect the way people live and work. Whether it’s the ever-changing travel restrictions, a rise of new variants or uncertainty around the future return to the office, those looking to buy and sell real estate are continuing to transact, despite uncertainties.

As real estate professionals, it is our job to guide clients through every step of the transaction process and make them aware of any nuances to the deal, particularly those related to the pandemic. Here are my top three tips on how best to salvage a deal.

Communication is key

Communication is at the core of this business. While good communication is essential for the success of any deal, there still can be obstacles during negotiations.

As a real estate agent, you must communicate with all parties involved. From your clients, to the agents representing the other party, to the legal, financial and additional industry professionals, I recommend creating a communication outline and timeline. This should include preferred communication methods and the contact details of each party to be shared with everyone from day one.

Let your client and the other individuals involved know what to expect with a detailed projected timeline for the upcoming transaction. Follow and update this schedule rigorously with the aim of keeping everything and everyone on track.

Keeping an open dialogue and consistent communication with each party will help decrease miscommunication and ensure everyone is aware of the process from start to finish.

Study the terms

Educate your client on the terms that should be added to the agreement, especially if there are any future delays due to COVID closures, government restrictions or other issues beyond our control. Always consult legal experts to review all language and add additional addendums related to COVID to protect clients from potential contract termination or delays.

Consider potential setbacks and seek solutions or alternatives. For example, if a client may not be able to attend the closing due to travel restrictions, consider whether an electronic execution is an option in your state and with the other party’s agent and title company.

Additionally, consult legal counsel to consider adding an addendum extending the closing date should this be an issue. Many terms can be addressed in advance and solutions can be made to ensure the deal is not disrupted.

Secure financing

Even before COVID, financing was a common reason for a real estate deal to go south. With record low inventory and multiple offers being placed on one property in markets across the country, now more than ever financing should be secured in advance.

Continue to encourage clients to seek pre-approval and secure proof of funds from financial institutions. Of course, deals can still fall through, but by doing this, sellers will be reassured that your clients are serious about their investment and can also create a sense of urgency.

With properties selling faster than ever, clients need to have all financing prepared to ensure they can close on time and beat out any competition.

My top three priorities when guiding clients to close the deal are keeping open communication, thoroughly reviewing contracts and securing financing. These can be some of the most common culprits for hindering an agreement, and they are often avoidable missteps. Be prepared to guide your clients, especially as we navigate any new hurdles as we do business this year.

Santiago Arana is a managing partner at The Agency in Los Angeles. Connect with him on Instagram.