Wednesday, August 16, 2017

Reasons Why Home Sales Fall Through and What to Do If It Happens to You

An offer is accepted and all parties have signed the required documents to begin the process of selling your home.  Then bam! The deal falls through and you’re back at square one and wondering what happened and what should you do now.
Contracts are not fail proof.  Especially real estate contracts which are full of contingencies that must be met before the deal can be finalized. The most common contingencies that fall through are the following.
Loan Contingencies
Unfortunately, if the buyer is unable to secure a mortgage loan, the seller is the one to suffer.  Hopefully, the seller’s agent has back up offers ready to fill in the gap. If not, then the home goes back on the market which can lead to misconceptions about the property. 
A home that is on the market for 0 to 1 days is attractive to buyers but one that is on the market for weeks or months gives the impression that there are issues with the home even if that’s not the case.
To avoid this pitfall, work with buyers who are already pre-approved for a mortgage loan that meets your selling price or with buyers who are paying cash.  Today, it’s common for buyers provide pre-approval letters to sellers and is highly recommended by real estate professionals.
The Home Inspection Reveals Problems
The home inspection may reveal multiple issues or a large ticket repair that may cause the buyer to back out of the contract.  This leaves the seller with a couple of options: pay to fix the issues or negotiate with the buyer to share the costs.
This is a tricky contingency to avoid.  If you as a seller are aware of issues, make sure you let your agent know so they can be included in the disclosures. Then the buyer is aware of the issues before committing to a contract.
If you are not aware of the issues until the home inspection, then try to negotiate before ending the contract. Make sure your agent is a skilled negotiator. This can save you thousands of dollars.
The Buyer’s Home Sale Falls Through
Occasionally a sale is contingent on the buyer selling a home. If you’re willing to hold off your sale, you can renegotiate and provide more time for the buyer to sell his/her home. Otherwise, there’s not much you can do in this situation.
 The Appraisal Is Less Than the Selling Price
When the home is appraised less than the selling price, you can split the difference with the buyer or lower the selling price to meet the appraisal. 
If the home is located in a market with bidding wars, the appraisal may come in higher in a short period of time so negotiating with the buyer is optimal.  If not, then lowering the selling price may be the best option.
How to Minimize the Risks
Avoiding all risks when selling a home is unrealistic, but you can minimize the potential of a contract falling through.
First, request mortgage pre-approval letters with each offer.
Second, get a home inspection before listing your home. You can make repairs before listing or include any issues in your disclosures.
Third, work with your real estate agent to make sure your selling price is comparable to the market.
Finally, make sure you have an experienced and trusted real estate agent who communicates with you throughout the process and who has strong negotiating skills.

Be an informed seller by knowing your contract and minimizing the risks ahead of time. Work closely with your real estate agent and go sell your home!

Thursday, July 13, 2017

Don't Make These Home Selling Mistakes

Selling a home can be difficult and emotionally draining especially for first time sellers.  Strangers will be coming into your home, poking around your stuff, and looking for faults.  Being prepared before listing your home will alleviate some of the stress from selling your home and make the process easier.
Being too emotional
It’s easy to let yourself get emotional about letting go of your home, a place that reflects who you are.  Try to change your mindset and think of yourself as a business person conducting a transaction and not as a home owner. Look at the transaction from a financial aspect focusing on how much you can receive at the end of the process.
On the other side, remember how you felt when you were looking for your home and concentrate on what the buyers are feeling.  Focusing on selling that image or dream for the buyer can help you overcome your own emotional ties to the property.
Selling without an Agent
Unless you have a lot of experience selling homes, not having an agent can be ill-advised. An experienced real estate agent will do the following for you:
·      Provide a market analysis for your home and advise on a fair and reasonable listing price
·      Act as the middle person between you and potential buyers weeding out the serious buyers from the window-shoppers.
·      Will handle all negotiations potentially getting you more money in the process
·      Will professionally handle any problems or issues that arise during the process
·      Guide you through the mountains of paperwork explaining what each contract or form means and how it relates to your process
Agents can be expensive, asking up to 6% in commission but in the long run, you can have the potential to make more money on the sale than if you sold your home on your own.  In addition, they can help to alleviate some of the stress associated with selling a home.
Not Preparing Your Home for Selling
It’s understandable that once you make a decision to sell your home, you want to put it on the market right away. However, take your time and prepare your home for selling. First impressions can increase the dollar value of your home making prepping one of the most important steps in the process.
Clean and Declutter
Too much clutter and personal items can distract buyers from picturing themselves in the home. Spend a little money to have professional cleaners come in and clean the house, including flooring and windows.  Start packing up your personal items as soon as possible and soon the home will be decluttered.

Repair and Upgrade
Chipped paint, cracked walls or sinks, or water stains can be a red flag to buyers.  Paint, repair holes or cracks, clean carpets or replace if needed. 
Stage Your Home
Buyers like a home that is bright and airy. If you have dark drapes or curtains, open them up or replace with lighter colors.  Remember smells are be a nuisance also. Be aware if you have pet smells in your home. Or yet, bake cookies before an open house or if you know buyers are coming over.  As an added incentive, you can offer the cookies to the potential buyers also creating a warm, open atmosphere.
Not correctly evaluating all the offers made
In today’s market, most home sellers have multiple offers in a very short time a home is put on the market.  If that’s the case and you have an experienced agent working with you, be sure to correctly evaluate each offer.  It can be helpful to create a spreadsheet so you can see each component of the offers. Just remember the highest bid may not be the best offer submitted.
Even though you may follow all of these recommendations, there may still be glitches along the way.  So prepare yourself emotionally and financially for any potential issues. However, being prepared ahead of time, can alleviate some of the stress of the home selling process and provide a profitable sale for you.

Let me know if you or anyone you know is interested in selling their home today!