You have worked hard. You have lived in your home for months as if you were living in a china closet so that you were ready “to show” at a moments notice. Heck, your home should have been on “HGTV”! You and your Realtor have negotiated the sale contract so that everyone is reasonably satisfied…now, what could go wrong? If you have an astute agent you should be able to avoid some of the pitfalls that are outlined below.
1. Make sure the “deal” is real: For instance, if the sale is contingent that the Buyer’s house most be sold before closing on yours, their home should already be on the market in order to avoid protracted delays in your closing or outright cancellation, as the Buyer has not been able to sell their property and cannot qualify for a mortgage without the sale of their property.
2. “Show Me The Money”: Before you counter-offer or sign the Sale Contract your agent should ask for “Proof of Funds” for the escrow deposit and the funds necessary for closing/whether a cash transaction or financed. If the property will be financed, the buyer should present you with a “Pre-Approval” letter from a lending institution for the amount they have preliminarily been approved for. (Not “Pre-Qualified” but “Pre-Approved”. This is not by any means a guarantee, but this does meet a higher level of credit worthiness)
3. Home Inspections: Please get them done early! 10-15 days from the time everyone signs the contract (Execution Date) should give the Buyer plenty of time to schedule the inspections. If you know of anything that needs to be repaired-address it-assume the Inspector will find it. A licensed Inspector is paid to find it! If there is something that you know of and are not willing to address it disclose it, even if your contract is an “As Is” contract. Being pro-active and up-front is always best.
4. Appraised Value: If your Buyer is applying for a mortgage, know that the lending institution will preform an Appraisal in order to establish the value of the property. The lending institution will not lend the Buyer more money just because you painted it the most designer forward architectural color or have the most beautiful flower beds. Be realistic in your conversation with you and your agent in order to establish the correct market value. If your home does come in with a low appraisal, you can have another, outside, appraisal done (more than likely at your expense) present it to the lending institution-they might accept it, lower the price or the Buyer can bring more cash “to the table” if feasible. Any one of the remedies may be used or a combination of all three might be utilized to finalize the deal. Remember, if the Bank’s appraisal came in low, you will probably face the same issue with the next Buyer, if they are financing.
5. Homeowners and Condominium Association Documents: Sellers must make the By-laws, Amendments and Financials available to the Buyer preferably before they make their final offer. If something comes up that the Buyer cannot live with (i.e. can’t park their boat or motorcycle in the driveway or no pets, their Attorney or CPA is uncomfortable with the language or the financials) you are not taking your home off the market just to re-list it a couple of weeks later.
At all times follow the guidance of your Realtor. Their experience is what you are paying them for.