Most discussions about real estate transactions concentrate on the needs of the Buyer. However, Sellers have needs, too! Lately, the residential real estate industry has experienced a slight increase in transactions falling apart. The majority of transactions failing to close seem to be limited to homes that are of lower value and/or older homes. There are steps that Sellers can take to avoid a transaction from “blowing up”. Here are a few tips to assist on ensuring the transaction makes it to the closing date:
1. AVOID THE UNQUALIFIED BUYER: While most Florida real estate contracts provide a “loan contingency,” the failure of the Buyer to qualify for a loan AFTER the contract is signed can be very frustrating for the Seller. To avoid this frustration, we recommend that the Seller request a Pre-Qualification letter and in some instances, proof of funds, to give them additional assurances that the Buyer is capable of getting the funds to close.
2. GET AN PRE-CONTRACT APPRAISAL: As the Seller, sometimes it is difficult to accept a price that is recommended by a Realtor. Often times, Sellers believe their property is worth more than it really is, and therefore they set the sales price higher than the market value. Pricing your property too high can sometimes prevent qualified Buyers from looking at your property. Also, once the property is under Contract, the Buyer’s lender will order an appraisal and you, the Seller could be surprised by the result. Surprises are fun when they are related to a party, but not when you are trying to sell your home. We highly recommend that you obtain what’s called a “Pencil Appraisal” to give you an idea of what your property is worth, before you put the property on the market.
3. CONDUCT A PRE-CONTRACT INSPECTION: Most real estate contracts provide the Buyer with an opportunity to inspect the property immediately after signing. This opportunity to inspect is limited to a certain period of time, usually 10-15 days after the contract is executed. When a Buyer inspects the property, their inspection might reveal defects, damages and issues to which the Seller had no knowledge. However, a Pre-Contract inspection from a licensed inspector will help you avoid surprises that might be revealed by the Buyer’s inspector. The Pre-Contract inspection will permit you discover and make necessary repairs before they are brought to your attention by the Buyer’s inspector. This will lessen the probability of a deal falling apart due to the condition of the house.
At Khani & Auerbach, we are doing our very best to remain at the forefront of the real estate market. We will continue to educate ourselves, our clients and real estate professionals. If you have any questions, please feel free to ask us!