What to know when accepting an offer
You finally accepted the proposal, there’s a sparkling diamond on your left hand and you’re thinking, “OK. Isn’t life great? Everything is falling into place.”
This scenario may work for a wedding proposal, but an accepted proposal for the sale of your home comes with a whole bunch of obstacles that could trip up the process.
With the real estate market breathing a little easier, 2013 is setting up to be a strong market for sales, but don’t think that just because you agreed on terms and price you’re good to go. It’s not uncommon for transactions to come apart along the way or at the last minute, but being proactive and keeping close tabs on the process will improve your odds.
A seller’s dream is an all cash buyer who is not asking for a mortgage contingency, and therefore, removes the stress of an appraisal and who will likely close faster. In the market we’re in, there are actually a lot of cash buyers since individuals have been sitting on their money waiting for an investment opportunity. Cash buyers know they’re golden and frequently will negotiate hard or ask for special concessions. If you receive an all cash offer which is lower than what you anticipated, you need to think carefully about the benefits of accepting this type of offer rather than continuing to market the property and hope you get a better offer in money and terms.
If you do have an offer that requires the buyer to obtain financing, make sure the buyer has been preapproved. However, even with a preapproval, lenders are requiring more stringent documentation, which could delay the process especially if buyers are unorganized about paperwork. Forty percent of transactions that fall apart are due to financing problems.
Of course, a mortgage will not be approved if the property does not adequately appraise. Appraisers in this market are sometimes overly conservative or just can’t find the comparables to justify the sales price you have agreed to. If this happens, the only way to save the deal is to reduce the selling price or for the buyer to come up with more cash or splitting the difference. Low appraisals are the primary reason you should price your home in line with comparable homes that have sold in the area.
Your accepted offer is also going to be contingent on a home inspection and title search. Even though you may think your home is in tip top condition, it is inevitable that a home inspection will turn up something. Be proactive in this area and get a home inspection at the time you put your property on the market, which will give you the opportunity to make any repairs you were not aware of that could sink a future transaction. In addition, providing the inspection to a serious buyer will make him/her feel more confident about the property. Same with potential title or assessment issues, especially if you are selling a condominium. Advising buyers at the beginning of the offer process that there is a special assessment will enhance your honesty with the buyer and give you both the opportunity to negotiate the handling of the assessment.
The main thing in a real estate transaction is to keep everyone on a tight schedule and move it along. Don’t wait for the agents to get back to you keep them on their toes by staying in close contact.
And finally, if a buyer is looking for a way out of buying your home even though you’re in contract, you may be better off taking them off the hook and looking for another buyer as soon as possible. Selling your home is just like being engaged. If all parties are not committed, it’s time to move on no, matter how much you like the sparkling diamond.