Profitable Home Selling
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Appraisal, Due-Diligence (Inspection) and Financing Contingencies
Finally, after all the work you have put into preparing your home for sale, you
receive an offer. Depending on the market conditions and the temperaments of the Agent and their Clients, navigating this process can be an emotional roller coaster. It can be a clash of forces; the Seller’s desire to maximize their profits and the Buyer’s need to get the best deal possible. If this process is not managed properly, it can lead to sleepless nights, as well as some hurt feelings for everyone involved.
Unless you are selling your home “as-is”, Buyers have the right to request repairs of items found during inspection. This part to the sales process is referred to as Due-Diligence and can impact the net return you walk away with from the closing table. This is a period of the contact where all aspects of owning the home can be inspected and evaluated by the Buyer. This can include, but not be limited to inspections of the home, septic system and pool, as well as specific tests for radon gas or mold. Review of neighborhood bylaws and use restrictions can be included as well.
The Due-Diligence normally lasts 10 to 15 days. Resolution of smaller defects found during inspections typically results in repairs being requested by the Buyer before the closing date. If more serious or extensive issues are discovered, a reduction of the sales price or termination of the contract can occur. This is why proper preparation of your home before listing it for sale is so important!
The next contingency that can stop a deal dead in its tracks is the Financing Contingency. This only applies to Buyer’s who must obtain a Mortgage to purchase the house. Cash offers are exempt from this contingency. It can run 21 to 30 days from contract signing, depending on the loan processing time required by the financing institution. If the Buyer cannot qualify for the loan, they can terminate and be refunded their earnest money. This is why understanding the Buyer’s financial situation, as best you can, is critically important before accepting any offer to purchase your home. An unqualified buyer can eat up a significant amount of your market time, and the loss of a qualified Buyer who bypasses your home and purchases one down the street. Understanding these points can help you and your Realtor develop a more successful sales negotiation strategy.
Preparing for the Home Inspection and Appraisal
If your home has been prepared and priced properly, these phases of the sales transaction can be less stressful. Getting through them is somewhat like the point of a roller coaster ride; when you decide to throw your hands into the air, releasing your fear and letting go of the bar. Focus on putting your best foot forward.
When you prepare for Appraisal and Home Inspection consider following:
Ensure the house is “show ready”.
Cage or remove your pets so they don’t become a distraction.
Make sure all doors throughout the house are unlocked.