After all of the components of the home buying process — negotiations, appraisals, inspections, and insurance — it’s very exciting to (finally) get to closing. But do you know what really happens during this final appointment? Closing on a home can be nerve-racking simply because many first-time buyers don’t know what to expect or what to bring along.
Q. What should I do to get my home ready to sell?
A. You want your home to be in the best condition possible before you list it for sale. But now, there is an even more compelling reason to do this.
Borrowers are getting more thoroughly examined for a loan than ever before, but also the properties themselves are being scrutinized as never before.
Many lenders are now considering the physical condition of a property to be just as important as the value of the property.
Historically the FHA and VA have been more stringent than conventional lenders with respect to the condition of a property but now real or perceived deficiencies in the property’s physical condition may cause as much of a problem for a conventional loan as for one that is FHA or VA.
In point of fact this is not a bad thing. The institution that is putting up the lion’s share of the money for a home purchase certainly has a right (perhaps even an obligation to its investors) to require that the security for the loan is in an acceptable condition.
Many appraisers are no longer just doing the things they’ve always done – measuring property, drawing floorplans, etc. They are conducting their own mini-inspections, which may not affect evaluation, but, if flagged, could become a condition of loan approval.
Loan underwriters may ask to see a copy of the home inspection and property disclosure to see what the seller has disclosed to the buyer about the property’s condition and history.
Even if a deficiency has been revealed through a home inspection that a buyer chooses to ignore (perhaps because they are going to remodel anyway), the lender could insist it be remedied before they’ll approve the loan.
I’m here to help in any way I can and, of course, answer any other questions you may have about real estate. Feel free to call me.
Posted by: RET Staff
In March, roughly one-third of all sales were cash, meaning a large number of buyers are not dependent on lender financing, the sale of their existing home or a settlement that might be 45 to 60 days in the future.
Instead, they can act quickly and, in many cases, seek properties which can be bought today and occupied tomorrow.
To ready a home for sale in today’s marketplace, Forsythe says owners should consider six basic keys to selling success.
Six Keys to Success
1) Curb appeal counts. Most home buyers want homes which look great from the outside. It’s not just a question of curb appeal — it’s about perception. If a home looks good from the street, it probably means the property is ready for a new occupant without a lot of cost or hassle.
Buyers tend to pass on a home that doesn’t appeal to them from the street–not even bothering to look inside. An experienced local REALTOR® can show you how to generate the most curb appeal with the least cost.
2) A clutter-free home. With the new emphasis on cash sales and speed, owners must show homes which are free and clear of clutter. A clutter-free home will make interior spaces look larger and eliminates the need to get rid of stuff when you are in the throes of moving. It makes sense to donate or reduce clutter before a home is placed on the market — not only as a sales tactic, but also as a practical step toward relocation.
3) Working condition. Having your home’s systems in good mechanical condition is an advantage in today’s market. Most distressed homes can’t compete when it comes to such basics as working heating, plumbing and air-conditioning. Properties that can readily pass a professional home inspection are often easier to finance, and are generally more appealing to buyers who don’t want to face the unknown costs and delays sometimes associated with major renovations.
4) List and negotiate properly. According to Forsythe, “A seasoned REALTOR® can show owners how best to market a particular home according to such factors as location, price, condition and financing. Owners want to work with us because our experience brings value and confidence to a transaction, factors that are enormously important in a changing marketplace.”
5) Seek prequalified buyers. While many sales may be for cash, the majority still require financing. It would be frustrating to enter into a sales contract with a potential buyer who ultimately cannot obtain financing to purchase your home — meaning you have lost time — and potentially money — and then you have to start over. When a home is shown by appointment, the buyer should have a pre-qualification letter in hand.
Such letters from lenders are not binding, but at least show that the purchaser sat down with a loan officer and has some realistic sense of what he or she can reasonably afford.
6) Distressed properties. Roughly 30 percent of today’s home sales involve “distressed” properties — a term which includes short sales and foreclosed properties owned by lenders. You need to consider the distressed properties in your neighborhood when pricing and marketing your home. These properties typically sell at discount, especially in major foreclosure centers and sometimes require substantial repair and rehabilitation.
“Home sellers can compete with these offerings,” according to Forsythe. “There’s no question that a large number of distressed properties in a local market will impact prices, but price is not the only factor buyers consider. While distressed homes work for some purchasers, they’re not the right choice for buyers who want homes that offer move-in condition — homes in better shape that can often command higher prices.”
While the housing market is just in the beginning stages of a recovery, it’s still possible to successfully sell your home by making sure you’re catering to the kind of buyers in the market today, and by making sure that you — and your home — are ready to move as quickly as these buyers are.
To view the original article, visit RISMedia.com.