What NOT To Do In A Home Sale
Congratulations! Your home is under contract. It may seem like you’ve run a half marathon to get to this juncture, but the end is in sight! You’ve managed to find the buyer for your home. So now you want to see it to the end, right? You don’t really want to blow it up… I admit, I’ve sensationalized the title of this post… but not by a wide stretch. We’ve seen a few transactions blow up over the years. It’s best to be aware of some of the things that can possibly sabotage your home sale:
Mistake #1: Don’t make the effort to fix things that break.
If a fixture or system in the home breaks when the home is about to be purchased, sellers must make the repairs. It’s unfortunate, but sometimes it happens. If a major system of the house fails, get a professional to fix it, and let the buyers know. When you fail to maintain the home, the buyers will probably lose confidence in the condition of the home and back out of the sale.
Mistake #2: Don’t use licensed contractors
If your contract requires you to do something before the sale, do it. If the buyers make the sale contingent on certain repairs, don’t do cheap patch-jobs and expect the buyers not to notice the fixes weren’t done properly.
It’s unfortunate, but sometimes sellers try to cut corners, when repairs have been agreed to. Sometimes we see that they’ve called in “handy uncle Joe” to fix items. If the home inspection negotiation has been signed by both parties, and the buyer requests a licensed contractor to make the repair, it is an obligation. Using a licensed contractor is in the best interest of the buyer and the seller. They are bonded and insured, and there is usually some kind of warranty to their work. It will be in everyone’s best interest to not only keep the home sale on track, but to mitigate against future problems that may arise.
Mistake #3: Ignore contingencies
Contingencies have deadlines. The first statement in the Maryland contract reads “time is of the essence.” That means when time runs out, you are out of contract. The buyer has no obligation to go through with the purchase. If you don’t meet contracted deadlines, the contract becomes voidable. Treat deadlines as the law. If you have three days to accept or reject the home inspection, make your decision within two days. Always leave a buffer for problems that may arise.
It’s not a good idea to assume you can just extend the contract. Sometimes buyers will think that you are not serious and might just walk away. Often buyers have hard deadlines that must be met: loan locks that expire, move out dates from their current residence, or a deadline for a new job, just to name a few.
Mistake #4: Become Rigid about further negotiations
Once you’ve negotiated a price, it might be easy to start your calculations about how much money you’ll walk away with from the closing table. However, problems uncovered during the home inspection may have to be fixed. The appraisal may come in at a price below the contracted price and the buyer and seller will have to negotiate what steps to take and what to do about the difference. Remain flexible throughout the transaction and remember that the negotiations aren’t over until the documents are signed and the key is delivered.
Mistake #5: Hide liens from buyers
Did you forget to mention that you owe six months of homeowners association fees or that Uncle Sam has placed a tax lien on your home? The title search is going to turn up any liens filed on your house. To sell your house, you have to pay off the lien. It’s great if you can do that with the sales proceeds, but if not, the sale probably isn’t going to close, and you’ve wasted a lot of time and energy and emotion.
Disclosing everything fully from the beginning will be your best opportunity to find out if there are solutions that will make your home sale possible. That’s much better than crossing your fingers and hoping.
Hopefully, no one will run into any of these issues. But it helps to go into the home selling process with information about the many possibilities, and an open mind. When the unexpected happens, you want to have a game plan and a game face to get you through to the finish line.
What To Do Right to Keep Your Home Sale on Track
And now that you know what NOT to do, here is a collection of great articles to help you keep your home sale on track:
- In this article, The Typical Issues in a Home Inspection, Jeff Knox shares the 10 items that most often show up as problems. This would be a big help to look out for these things and get them fixed right away.
- How To Prevent Home Closing Failure. Paul Sian, Realtor in Greater Cincinnati, OH and Northern KY, has some good advice for both buyers and sellers about preventing a blow up before settlement. It’s worth mentioning that sellers would do well to have an experienced local agent who knows how to vet the buyer’s financing. This can help mitigate against the possibility of their financing not going through.
- Selling Your Home and the Buyer Cancels. Yikes! It can happen, although it’s not often. Debbie Drummund, Las Vegas Luxury Home Sales, has some great advice on what to do when a home buyer backs out of the purchase.
- In this article, Top 8 Reasons A Real Estate Deal Falls Apart, Kyle Hiscock, Rochester NY Realtor, points out the typical problems that cause a deal to fall through. Notably, not using an experienced listing agent. Having an experienced and competent real estate agent working on your behalf will give you the best odds that your deal will NOT fall through!