You’ve Got a Buyer! What Next?

Hooray! You may now begin the process of selling your house. You’re done, right?

Not exactly. Now, all you need to do is get yourself and your house ready for the closing, and if you need any assistance with that, we are here to assist you. Let’s plunge in!

Deposits of good faith

If you decide to sell your home to the buyer after they make an offer on it and you accept it, the buyer will send you a Cheque for a deposit that is known as earnest money.

Earnest money is a concept that, at some point in time, baffles absolutely everyone. It may all be summed up in one basic concept: The fact that you are willing to put up this kind of money demonstrates that you are serious about moving forward with the business transaction.

The buyer will often pay between one and two percent of the total sum being offered as a deposit, which will be held by a third party until the transaction is finalized.

Should the transaction be finalized, the earnest money will be applied toward the purchaser’s down payment (or full cash payment). This money is refunded to the buyer if the transaction does not go through because you are unable to fulfil the buyer’s contingencies (for example, with regard to the inspection or appraisal). Usually.

If, on the other hand, prospective purchasers back out of the deal simply because they randomly change their minds, the sellers may be allowed to keep the money despite the added difficulty. Think of it as a sizeable compensation for the inconvenience of having to place your home back on the market.

The disclosure made by the seller

As soon as you decide to accept an offer, you will be required to provide the buyer with a seller’s disclosure, which is essentially an itemized summary of any issues that may exist with the house or the neighborhood. But how much of the information do you have to reveal?

It is all dependent on the legislation in your state. You can get a list of disclosure regulations for each state on the legal website Nolo.com. Additionally, your real estate agent will be able to supply you with the requirements that are specific to your region. In general, you should be prepared to dish the dirt on the following topics:

• Fundamental information about the home, such as its age or the monthly price of its utilities

• Structural difficulties, such as the age and condition of the roof

• Environmental concerns, such as whether or not the property is located in a flood plain

• Known issues, such as water damage in the basement

You are permitted to provide more information than is required, and it may be in your best interest to do so even if the requirements in your state are not very stringent. Cathy Baumbusch, a real estate agent with Re/Max Executives in Alexandria, Virginia, says that she always encourages sellers to add as much information as they can. “I always advise sellers to include as much information as possible.”

Although it may appear counterproductive—after all, you don’t want to scare the customer away—not disclosing information could end up being quite costly for you in the long run. After all, the seller will discover the truth at some point, so it is in everyone’s best interest to come clean right away.

The inspection of the home

A home inspection is something that the buyer will want to have done regardless of whether or not you sold the home “as is,” and sometimes even if you did. It is the responsibility of the inspector to search for issues such as:

• Roof damage

• Structural problems

• Issues with the plumbing

• Major problems with appliances and HVAC systems

• Potential fire concerns, such as faulty wiring or chimneys that don’t work correctly

The report will be given to the buyers because they are the ones who hired the inspector. Trust us when we say that if they find anything awry, you will hear about it, since it may become a subject of negotiation that you will need to iron out before the deal is finalized.

Following the completion of the inspection and examination of the seller’s disclosure, it is possible that the buyer will request that some repairs be made. The repairs have to be for legitimate issues; the buyer can’t simply back out of the deal because the range is old.

According to Baumbusch, “You may be requested to get items repaired, or you may be asked to offer the buyers a credit so that they can pay for repairs on their own.” It may appear like doing it yourself will save money, but offering a credit will get the job done much more quickly; thus, you should think about the additional expenses that will result from the delay.

The valuation of the property

Your purchasers will need to employ a home appraiser if they intend to use a mortgage to finance the purchase of the property.

An appraiser is comparable to a home inspector in that they both visit the property being evaluated and examine it thoroughly from top to bottom. The only difference is in the purpose: An appraiser will not look for flaws or make recommendations for fixes; rather, their focus will be on determining the value of your property so that the lending institution can determine whether or not it is a good investment.

In order to accomplish this, the appraiser will not only conduct a personal inspection of your property, but they will also research the values of recently sold comparable homes in the area (much as a real estate agent would do for you). Everything will work out fine whether the appraiser’s price coincides with the price your purchasers are willing to pay or whether it is greater.

However, if the appraisal comes in lower than the price that is being asked for the property, this could become a problem. In most cases, lenders will not lend buyers an amount that is higher than the assessment amount. The purchasers have two options available to them: either they may pay cash for the difference or they can negotiate a reduced purchase price with you. In the latter scenario, you have two options available to you as well: You can either agree to the lower price for the residence or walk away.

Before you make a decision about what to do, you should first ask yourself how simple it would be to find a new buyer. If you were inundated with offers, it may be in your best interests to move on, but you should bear in mind that you may encounter the same difficulty with following appraisals if you do so. Therefore, unless you are certain that your home is worth more and are willing to start from the very beginning, you might want to consider taking a financial hit in order to keep moving forward.