When a deal falls through and someone else ‘buys’ the property, what do you do?
Properties are selling fast, the market is buoyant and the competition between buyers is hot. It’s not just investor v. investor, you’re up against anyone who is looking for their next home too. So, you’ve made an offer and the answer is ‘Sorry, someone else has made a better offer and it’s been accepted.’ Now what?
Most people write that one off and go on to their next deal. But what if you haven’t actually missed out on the deal?
Did you know that one in every three deals fall through?
The sale is not complete until contracts are exchanged and that can take weeks - usually months. As the saying goes ‘There’s many a slip between cup and lip’ and in property that is very true.
People don’t complete the deal for lots of reasons - they may have a change in personal circumstances, find another property they like, are unable to sell their current place, are stuck in a chain that means they’re forced to wait - you can probably think of dozens of reasons people drop out.
You may be thinking, ‘if the deal I offered on falls through, surely the agent or vendor would get back to me?’ And you’d be wrong! For whatever reason that isn’t how most people think - let’s face it, that’s how you’re thinking isn’t it? The responsibility for your next deal is yours - not someone else’s.
Follow up on your hard work
When you get your offer turned down, it’s easy to file and forget, but now you’ve done your due diligence and invested time and effort in researching the deal, that’s like money down the drain - and it doesn’t need to be.
The secret to increasing your property investment successfully is a system. Put a note in your diary to reconnect the seller (whether that’s the agent or the vendor themselves, whoever you were originally dealing with) every month or so. Ask if the deal has completed yet and only file and forget the property when you know that the contracts have finally been exchanged.
If you offer on 20 properties over the course of a year, you’ll probably get a second bite with at least a third of them – and that’s an awful lot to just walking way from.
To add to this, be the estate agent’s friend. Make sure they know that you are always ready to revisit the deal if it falls through. If you’re using bridging - also ensure they’re aware that you can buy quickly, close the deal and exchange in less than a month and they get their commission in this month’s figures. That doesn’t means there’s a guarantee they’ll get back to you, but it will improve the likelihood that you’ll get a heads up if there’s potential.
Perhaps you already know about going back to check on deals that went elsewhere - but are you actually doing it? It’s easy to forget - so get a diary system going, put the deal, your offer and a follow up date in 4-5 weeks after your offer was turned down.
If a deal has fallen through for the vendor, they may even be ready to come down in price too.
Get more mileage from the hard work you’ve invested. Don’t take a rejected offer as a ‘no’ until the deal is signed, sealed and delivered.