“Ready, Willing, and Able” is a term often used in listing agreements to describe the type of buyer that the real estate broker is seeking to find. Sellers and brokers both want to find prospective buyers that fit this description because it means they are dealing with someone that is “ready to go.” But how do you know if the potential buyer you are negotiating with fits the bill?
Black’s Law Dictionary describes this term as, “persons who are legally and financially able to complete any type of transaction. Authorization and approval are not necessary from any other persons or parties.” This article is not meant to give legal advice or even really to make a point about the legality of a real estate purchase. The aim here is to identify the characteristics of a buyer that is truly “ready to go.”
Ready– Is the buyer truly ready to make the purchase? Have they looked at enough properties to know what they want? Are there lingering questions that are preventing the buyer from moving forward with the purchase? One of the hallmarks of a buyer that is not ready to make the purchase is that they continually ask about other properties or are raising objections about the subject property. A buyer that is “ready” will either have done or will be doing the legwork to get loan approval, contract parties for due diligence, and be in a position to make an offer.
Willing– Is the buyer exhibiting the signs of someone who is eager to make a purchase? Are they talking about what they can do with “my” property? Is the buyer under pressure from a spouse or partner to make the purchase, or not make the purchase? “I like the property, but let me talk to my wife (or husband)” is a sign that you may be dealing with a willing buyer, but one that may not be ready or able. There are also plenty of people that are willing to purchase land for sale, but do not have the financial wherewithal to act on it. There are probably many more buyers in the “willing” category than those who are in the “ready” or “able”.
Able– When a buyer has identified “the one” and they are properly motivated, the next step is proving that they are able to perform. This summer I have had several situations where the buyers were very interested in a property, they were ready to make the purchase, in one case they even came to terms with the seller, but they were not able to perform due to a lack of funds. There are many reasons why a buyer may not be able to perform, some common ones are: waiting on another property to close to be able to use those proceeds, waiting on funds from an insurance settlement or lawsuit, or proceeds from the sale of a business, stocks, or personal property are delayed.
Establishing proof of ability to purchase residential real estate is a common practice. Buyers simply get pre-approval for their loan or present a pre-qualification letter when they submit an offer. Auctioneers have long required proof of funds for a bidder to participate in the auction. Most land lenders in my area do not offer pre-approval letters. If a seller is uncertain about the buyer’s ability to consummate the sale, it is prudent to ask for proof of funds from their bank or a letter of credit from their lender. This is even more important in a multiple offer situation or in a scenario when a seller may have to purchase another home or move out of their current home. Proactive buyers will want to remove this possible objection from sellers as quickly as possible.
A buyer that is “ready, willing and able” will be able to provide sufficient earnest money, willing to come to terms with the seller and sign a purchase agreement, and will follow through on the transaction. My hope is that this article spurs some thought for buyers, agents, or sellers regarding the land sales process, and that they will be able to take steps to ensure a smoother and successful transaction.