Multiple Offers, Momentum Shifts, etc.
Unbeknownst to laymen, there is a predictable ebb and flow in the course of each housing transaction, whereupon each side is most (and least) vulnerable to the other.
For a Buyer, the point of maximum vulnerability comes early: that would be after they have verbally come to terms to buy a newly listed home that is well-staged, priced, and marketed ” but before the Seller has signed everything and delivered the executed contract to the Buyer’s agent.
Until that happens, the Buyer risks the emergence of one (or more) competing offers, throwing the house into multiples and effectively voiding any terms they may have verbally agreed to with the Seller (Realtors split about whether it’s ethical for a Seller to do this, but legally it’s quite clear that only written, fully executed contracts are binding).
Which is why Buyers’ agents hustle to finish off deals in such situations (or try to; if the Seller drags their feet signing everything, the Buyer’s only real recourse is to withdraw their offer).
Maximum Seller Risk
So, what is the point of maximum risk for Sellers?
Much later in a deal, when the Written Statement deadline ” signifying that the Buyer’s financing is in place ” occurs just before the closing.
That frequently happens in deals with a quick closing, which I’d define as 4 weeks or less.
Because a Written Statement conservatively takes about three weeks (especially during the busy Spring months), it’s possible for the Written Statement to be due literally the day or two before closing.
Unfortunately, most Sellers can’t wait that long to move out, disconnect their utilities, etc.
So, the risk is that if the Buyer’s financing falls through at the last minute, the deal’s off and the Seller’s left with a now-vacant home.
Compounding matters: in such a situation, the Seller is obliged to return the Buyer’s earnest money. See, “You Mean, There’s No Deal AND They Get Their Earnest Money Back?!?“