Are you thinking about selling your home? Here is a list of common miscues, which if properly addressed, will not only secure the transaction, but will maximize your profits and eliminate any unnecessary aggravation.
BEFORE you actively sell your home, find out exactly the future net proceeds of the transaction. Learn typical seller closing costs and their associated fees. Also keep in mind mortgages and taxes are paid in arrears. Example: your May 1st mortgage payment is actually for April. If you close May 15th, you will actually owe a half month’s mortgage payment at closing. It is extremely important to calculate your approximate net prior to accepting an offer especially if you need a bottom line dollar figure to move onward.
For the transaction, use a standard neutral real estate contract. Beware of “seminar” contracts that are pro buyer, containing lengthy option periods and numerous escape clauses. With all legitimate contract offers, a buyer pre-qualification letter from a lender should be included with the name of the lending institution, the Loan Officer name and contact information. In conjunction, request written permission from the buyer(s) which will allow your inquiries about the applicant’s loan status.
On the contract, limit your home inspection liability even if you think your home is in great shape (inspectors always find deficiencies). Also, the buyer should always conduct a home inspection very early in the contractual period because this is an easy “out” clause from contractual obligation.
To prevent a buyer from “walking” from a contract, always require a sizable escrow deposit. Quite simply, the more money down, the less likely the buyer will “walk”.
Additionally, on the contract, the closing date should never be scheduled for a Friday or the last day of the month. Both days are very hectic for mortgage and title companies and in case the closing is not consummated, the closing will have to be postponed until the next business day. A Friday closing means you will have to wait until Monday. A closing on the last day of the month would get postponed to the 1st day of the next month which could create a new set financial consequences for the buyer.
During the actual contract term, it is vital to follow up on the buyer obligations such as securing insurance, ordering the survey, appraisal and termite inspection, etc.