Articles Tagged "closing on a home"

Selling a home can be a tumultuous process. While some offers may seem great upfront, it does not signify the process is almost over by any means. Between offer and closing, there is the actual sale that requires lots of time and persistence to make it through. It is often a rapid-fire time of answering and responding to emails, questions, and inquiries about credit histories and property values, and other things that can derail a home sale at any point before closing. Find out some of the top reasons why pending sales fall through and how to navigate this with an experienced realtor.

Pending Sales

Terminology is key when talking about property sales. A sale is considered to be pending when a seller accepts a buyer's offer until the sale is closed. Some agents also call this 'being under contract' or 'contract pending.' There may be contingencies that come up in the process, meaning either buyer or seller has requests that must be fulfilled as part of the contract. This prevents them from getting into the deal and being stuck if major repairs are needed. 

Mortgage Application

A common reason for pending sales to fall through is the buyer cannot qualify for financing. Most buyers finance a home because they don't have enough equity to purchase one outright. A letter is often submitted that they are pre-approved or pre-qualified for a loan. This is not a guarantee, but an estimate of how much the bank believes the buyer can afford. This means checking credit history, getting verified documents of income, and making sure they have enough money to continue making payments after the purchase goes through. 

Home Inspection

The home inspection is often where good sales deals go wrong. A professional home inspection can reveal concerns or problems a buyer is not aware of, maybe even the seller, until the report comes back. Some common issues they look for:

• Mold
• Foundational issues
• Roof damage or lack of upkeep
• Interior hardware like furnaces and water heaters including the age of these appliances

Buyer's Sale

When buyers look for a new home, they are usually trying to sell their primary residence. Doing this at the same time is tricky. If they find a home they love, they might write up an offer and include a home sale contingency. They will have sometimes up to 60 days to sell their home and keep the current offer on the table. Market conditions are important to this process to see if there may be other, better offers, or if the person is definitely a good candidate to sell their home, also, and move forward with the process.

Prevention Tips

When you know what to look for, you can often take preventative steps to keep the process going smoothly. Explore some proactive measures that might be helpful:

• Keep contingencies in mind: some sellers require a pre-approval letter and proof of funds prior to moving forward. A strong letter and good down payment are signs the buyer can get a mortgage without major issues
• Pre-inspection: this step will alert you to problems that might hinder the sale of your property and give you time to fix them before trying it out in the market. The older the home, more repairs there will so be/ aware this can actually save money in the long run
• Appraiser: give them a fact sheet with things like square footage and comps in the neighborhood. The appraisal may be subjective but let them know you are aware of what local averages and ranges are so you feel you get the best appraisal for your property
• Keep a list of repairs: if you made repairs and upgrades, you are on your way. If you have a good school district, this is often a selling point for families. Consider this a selling point and look at all the things that have been dong as potential upgrades to a buyer

Real estate transactions come with real risk and uncertainty. To have more certainty in the process, it helps to have some ducks in a row ahead of time to make the process go more smoothly on the back end and sell your home or buy the potential home of your dreams. 

Trying to make the process easier is the job of a real estate agent, but there are some things sellers and buyers can do ahead of time to make it go more smoothly. If you are ready to jump into the transaction part of the journey, we will help you navigate the process of selling or buying a property. Choice Properties has experienced agents ready to answer questions and help you get started on the process. Call us to get started. 

Buyers looking to get into a home are often looking to finagle their way to a good deal just as much as the seller wants top dollar. Each one has to compromise and meet in the middle when it comes to negotiations. Finalizing the offer can often be a tough road, but once both parties come to an agreement, the real fun starts. When a seller accepts the offer, there is still a lot to do. Find out how to navigate this road to complete a home sale. 

Sign the Purchase Agreement

An offer on a house is considered 'under contract' when it is accepted and signed in writing by both the seller and potential buyer. This written contract is called a purchase agreement. Think of it as the first step in finalizing the sale of the property. There are some things to keep in mind about what it means:

• Financial details are outlined like earnest money deposits, financing, and closing costs
• Contingencies
• Timelines are laid out
• Closing date is agreed upon

Lots of little details are figured out at this point like the condition of the home, disclosures, and any seller concessions, repairs or credits. Once the agreement is signed and money deposited, the buyer has the right to purchase the property.

Negotiations

Sellers ultimately want to get the most for their house value. They are often willing to negotiate lots of things to get what they want, but the buyer also wants a good value. A counteroffer may be thrown out there at this time but a seller may not want to make requested changes. When thinking about negotiation, consider the purchase price and down payment, adjusting the length of closing, modifying contingencies and reviewer any credits being offered. When accepting a home buyer's offer, make sure all the cards are on the table to make it the best sale possible. 

Backing Out

Trying to get out of a purchase agreement can get kind of messy, a bit in that gray area of the process. Withdrawal of the offer if agreements are not made can be tricky. What determines how things go really depends on where things are in the process and the reason for backing out. Negotiations can always be made, but it might be better for both parties to re-negotiate than lose out on the sale and purchase of the property.

Acceptance of an offer might seem like the endless days of finding the perfect home has come to an end. However, it is the start of another journey to finalize everything and close. Until close, anything can happen. Work with your agent to establish a game plan and prepare the way for things that can happen between an agreement to the final closing. A home buyer's offer can be accepted with lots of contingencies to finalize, so be aware of all these walking into it and have an open mind until the day of close to being open to the process for the best outcome.

Looking for the best real estate professionals to help in home purchase and sales can be difficult. Look no further than Choice Properties to help you finally end that search and give you what you need. With all the options out there, we work with you to determine what you want and how to get there. Contact one of our top notch realtors at Choice Properties who specialize in your local market to find the property that is right for you.

Buyers and sellers in the housing market have many fees to consider when purchasing and selling a home. One of the costs, closing fees, can be confusing to understand who pays for the fee. Learn more about closing costs when buying or selling a property.

Buyer Costs

Closing fees can be present for both buyers and sellers. Typically, the buyer is faced with more line-item expenses than the seller (who typically pay more). Most buyers are getting loans to make the purchase of a home and many charges stem from the loan itself. A buyer should receive something called a loan estimate form early on in the sale process. The document spells out all approximate costs a buyer will face when making the purchase of a home so there are no surprises at closing. Some buyers may use the information on the loan estimate to shop for different lenders, interest rates and costs.

Buyers getting a loan will see some of the following costs:

• Appraisal fee

• Origination fee

• Prepaid interest

• Prepaid insurance

• Flood certification fee

• Tax servicing fee

• Credit report fee

• Bank processing fee

• Recording fee

• Notary fee

• Title insurance

It is prudent to go through all listed fees line by line with the mortgage professional to understand what the fees include and how they apply to the loan. Aside from expenses of getting a loan or buying a home, some expenses (such as property taxes or HOA fees) are pro-rated and paid at the time of closing. If an individual is buying a home and closes toward the end of the property tax period, it is likely the person will need to pay the balance of taxes upfront. This also includes prepaid loan interest. If a person closes toward the end of the month, the lender may ask for first month's payment up front.

Negotiate Sharing Costs

Part of the negotiation on a home sale can include asking the seller to pick up some of the closing costs as part of the negotiation. Credit for $5,000 reduction in purchase price can save a fair bit of money in the closing costs up front, even if it only saves a little bit monthly over the life of the loan.

Sellers Commission

The seller will usually bear the biggest brunt of fees: the real estate commission. Commission is based on a percentage of total sale price. In addition to real estate commission, sellers may have to pay the balance of property taxes, if it has not already been done, as well as any prorated homeowners association dues.

It can pay big dividends to pay attention to closing costs so as not to get charged fees which can be negotiated or lowered. Any real estate agent will be happy to work with individuals and families on home closing paperwork to provide the most for overall satisfaction.

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