Friday, February 10, 2012

“Open House” to Closing: Set Up Your Sale for a Successful Close: Part 3

Getting ready to sell this spring? These days, as many as a third of all deals falling apart before closing. This week we’re reviewing the steps you can take to set up your home sale from the beginning for a successful closing. This is the final installment in this series; scroll back in the blog to read the prior entries.
Yesterday’s post was about setting an asking price that would hold up to scrutiny by the lender’s appraiser. But what if the problem is with the buyer?

Buyers may think they qualify for the mortgage they need to buy your house. They might even have a prequalification or preapproval (here’s the difference).
But if the buyer has been sloppy with managing his credit, or if his income has been erratic, that preapproval might not translate to a loan. A lot can happen between when a buyer starts househunting and when that buyer makes a firm offer.
Secondly, your buyer might have less equity than expected from the sale of her first house. If she bought within the last decade, and used a full-commission agent to sell her house, she might not have any equity at all. If so, she has to rely on savings for the down payment to buy your house. And if she comes up short, the lender will let the deal die.
Don’t waste time with a buyer who isn’t qualified.
  • Insist on proof of current mortgage preapproval before you start negotiating. Don’t take the buyers’ agent’s word for it. Require written proof.  
  • Insist on a substantial amount of earnest money – at least $5,000. If the buyer doesn’t have it, he may not have enough to support the loan, either.  
  • Continue to market the house even while you are negotiating and under contract. Knowing that you have a backup offer in the works can motivate your first buyer to do anything it takes to get the deal over the line.
Image courtesy of Morguefile contributor dubois.

1 comment:

Darlyn said...

This is a great culmination for your "how-to-article." Thanks a lot! I badly need tips for an upcoming takeover of our broadbeach resort. Looking forward for more posts.