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Are your sellers prequalified?

By
Real Estate Sales Representative with Deeb Realty

I was recently at a seminar where the speaker was giving tips to more successful transactions. He spoke of prequalifying sellers as well as buyers. His steps included:

Ask what the sellers owe currently

Prepare a sellers net sheet so they know what they will potentially get

Do an ACCURATE market analysis

Do a preliminary title search to have all liens/issues discovered

Have the sellers do a home inspection

Explain radon and the costs involved if their house has high levels

Suggest an appraisal if their price is extremely high compared to the market analysis

My thoughts:

Five years ago I never asked a seller what they owed on their mortgage, now I ask all of them. Sometimes they decide right there and then not to sell saving them heartache and me time.

Five years ago I rarely prepared a sellers net sheet for a listing appointment, now I always do. This is a good idea in any market as money is always the most important thing to sellers.

I have always found market value two to three different ways to find an overlap value. Market value is harder to determine where prices are still falling but it is still possible to get an accurate range.

The prelininary title search sounds great in theory. I have yet to find a title company who will do a search on a property that may or may not sell and where the buyer may insist on a different title company. Title companies are too busy to do free work.

A pre inspection of the home is usually a good idea. We often reimburse sellers for the inspection at closing because it aviods unpleasant surprises after we get the contract and there is a big ticket item on the home inspection.

Radon is a huge issue here in Nebraska. Iowa and Eastern Nebraska have the highest levels in the country. I have had trouble with sellers saying radon is a scam and they won't pay for mitigation. I now address it up front and show them an article citing the EPA linking radon to lung cancer.

I always explain that if we price the home too high, even if that "magic buyer" comes along and offers close to asking, we still have to get a bank appraiser to agree on value. Sometimes having an independent appraiser come in and reiterate the value to the seller helps them accept it more easily.

I hope some of these ideas will help all of you in 2010 and beyond.

Please give me any of your thoughts and experiences.

Best Wishes

Renee

Damon Gettier
Damon Gettier & Associates, REALTORS- Roanoke Va Short Sale Expert - Roanoke, VA
Broker/Owner ABRM, GRI, CDPE

I was just listening to a David Knox series on how to work with buyers.  There are several ways that we fall short in prequalifying our buyers.  Not just with the bank.

Jan 31, 2010 10:53 PM
Mandy Buchholz
Benchmark Realty, LLC - Murfreesboro, TN

Lots of good points. I remember a seller we sat with suggesting we do a net sheet. He knew how much he owed and we were told there was not a second. It wasn't till we got a contract he remembered he had a second for $15,000. We did get it closed, but I often wonder do they think the title company won't find they have a second?

Jan 31, 2010 10:57 PM
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

What is the seller's motivation to sell. Like the timing of the buyer that can not buy until they sell their present home, the ability to buy, desire to sell are the two ends of the real estate rope to pull together, tie off and head to a closing. Fair market value is easy to determine if you study the sold comps, competing listings value. Good post.

Jan 31, 2010 11:13 PM