If you're getting ready to sell your home, you need to be prepared for the potential of failed buyer's contracts. While most homes that go under contract actually reach the final signature stage, there are some that may not, and often it's due to contingencies in the sale. Here are a few of the things you should consider now to reduce the chance of this affecting your home when it's finally on the market.
Pay For Your Own Home Inspection
Before you list the property, it's a good idea to spend the money on an initial home inspection. Since most buyers will list an inspection as a contingency of the sale, having one done ahead of time will allow you to discover and address any issues before the house hits the market. That way, you can be sure that there are no surprises.
This is important because sometimes the home inspection will identify serious issues that need to be fixed, such as roofing or foundation damage. If you don't know about them until your potential buyer does an inspection, you will find yourself in the negotiation stage again and potentially losing the buyer due to the problem. Identify any inspection issues ahead of time and have them addressed right away. That way, you'll be able to get the best possible price for your home without risking having the deal fall through.
Have A Property Appraisal
Another common problem for home sellers is when the property is listed at a price that is considerably higher than the appraisal value of the home. Most banks won't approve a mortgage for more money than the home is appraised to be worth, because that could cost them a loss on their investment if the home is damaged.
If you want to avoid the risk of contract failure due to a discrepancy between the appraisal value and the sale price, consider having the home appraised yourself before you list it for sale. And, you can talk with your real estate agent about proper pricing for your property. They can help you price it according to your local market, the home value, and other comparable homes for sale.
Clear Any Additional Liens
If there are any liens on your property other than the mortgage you'll pay off with the home sale, you'll need to pay those off in order to sell your home. Otherwise, the additional liens will show up on the title search during the sale process and you may not be able to sell it. If you need to sell the home to pay the lien, make sure that the account in question is included in your title insurance. That way, the lender knows that they're buying something they have all of the rights to, because most lenders won't approve the mortgage for the property unless it is clear in the title search.
Ask For Pre-Approval Letters
When you're booking showings, you can always request a copy of a mortgage pre-approval letter for the would-be buyers. That way, you can eliminate the risk of accepting an offer from someone who can't qualify for the mortgage, whether because of credit, income, or other reasons. A pre-approval letter tells you that the individual has been evaluated according to the bank's credit terms and has passed that portion of the mortgage application process.
With these tips, you can minimize the risk that you'll be facing a failed home sale. These are some of the most common problems that home sellers encounter, and avoiding them means addressing the issues before you list. Talk with your real estate agent today for more ideas and about new homes for sale.