We all want that feeling of closing our first sale on a home.
The relief experienced after a long, nerve-wracking process. The joy that spreads to your soul after a successful negotiation. The feeling that anything is possible for you moving forward.
But in order to achieve your dreams of selling a house and starting the next chapter in life, you need to prepare your mind for the emotional stress up ahead.
Selling a home means leaving behind countless memories of family time inside, despite knowing an exciting future lies ahead. And more so, the anxiety of not knowing exactly what happens during a home sale cripples us into feeling uneasy and unconfident.
So how can you fix that?
When the offers start coming in, how do you stay calm and choose the best option?
And how do you do that with the utmost confidence?
We’re here to help you harness the power of negotiation and leverage, turning you from a home novice to a real estate savant.
Here are 6 tips to evaluate offers on your home like a professional, so that we can close the deal and pursue your next dream.
Is the Buyer Pre-Approved?
Once we have a few offers on the table, we need to learn as much as we can about the buyer’s position and what exactly they are offering.
The first step?
Finding out if they are pre-approved from a mortgage lender.
If none of your potential buyers are pre-approved, you need to discuss their financial situations with your agent and determine what parameters to set for them to get an approval done.
If they are pre-approved, what type of mortgage do they have? Study up on the pros and cons of different types of mortgages and how they affect you as a seller. Some mortgages don’t require buyers to put any money down, which can immediately affect your cash flow situation in the short term.
The type of mortgage also affects the amount of closing costs you’ll have to fork over at the end of the sale, so it’s paramount to learn about the benefits and drawbacks of each.
It’s important to discuss these financial details with your real estate agent, so that way you have a clear picture of what to expect.
Are There Any Buyer Contingencies?
Some buyers may ask you to make a few repairs to the property before agreeing to purchase. Some may ask you to purchase a home warranty policy. While others may waive these contingencies entirely.
Understand each contingency and what the cost entails for you, because any repairs made out of your pocket dwindles your net profit on the sale of the house.
If you didn’t begin your selling process with a home inspection, most buyers will have some contingencies related to different possible inspections. These include radon, structural, pest, and septic inspections. While these costs will be your responsibility, they are necessary to understand prior to the sale of your home.
What’s the Size of the Down Payment?
An offer without a down payment is a sheet of paper and a promise. But an offer with 20% down or more? That means cash in your pocket.
If you’re using the money from the sale of your home to finance the next house, pay attention to the size of the down payment. Furthermore, ensure that the payment comes from more liquid assets, as opposed to frozen ones tied up in stocks or banks overseas.
Keep things as simple as possible when nailing down the right offer.
Who Pays the Closing Costs?
Both buyers and sellers have responsibilities when it comes to closing costs at the end of a sale.
These include home appraisals, title searches, and real estate agent commission. But many times, buyers may ask the seller to cover some or all of these costs. Pay attention to any notes in the offer regarding closing costs, as these can range anywhere from 2-5% of the total home price for the buyer, and 6-10% for the seller.
And if the buyer’s offer asks you to cover those expenses, that’s more money out of your pocket.
Who Gets the Furniture?
Often, the major appliances in a home stay put after a sale, such as the refrigerator, oven, and air conditioning units.
But if you’re moving across the country and don’t want to haul your couches and beds, or the buyer fancies the love seat in the living room, you can negotiate the price of all of the furniture in the home as part of the sale.
Know the worth of all of the furniture in the home to better prepare yourself for this potential negotiation. The money included from this part of the sale can go towards filling up the rooms in your next home, and you don’t want to be left in the red.
But be sure to take the rug from the entryway that you bought at a vintage market.
Do You Have a Sell-By Date?
Maybe you’re taking on another job on the east coast. Or perhaps you need to move in time for the kids to start school at the beginning of the semester.
Plan out your move-out deadline if needed. And when you do, focus on the proposed closing date in the offer.
Does that closing date align with your sell-by date? Does the lender have a rent-back policy so you can stay in the home longer if needed?
Things get complex quickly when closing a sale, so we always recommend working with an experienced realtor who can lay out all of your options to make the best decision possible.
Recap
Knowledge is power.
When we take the time to understand the complexity of a home sale, we feel more prepared to handle the potential stress that can arrive with the process. And with that preparation, we gain confidence.
So if you’re getting ready to sell your home, take pride in the fact that you know how to handle receiving multiple offers. You can sift through the jargon and unserious offers and pick the offer that will manifest your dreams.
You’ve got this.
