Not so fast there, Mr and Mrs Homeseller...
A lot of sellers think that the sailing is going to be smooth after they go "Under Contract". After all, the hard part is getting an offer, right?
Maybe... Maybe not...
Actually, I have dealt with a rash of buyers falling out of contract lately. Inspections haven't been good to a couple of sellers. The specific issues aren't as important as the concept here. The home isn't sold until you clear the closing table.
Homes fall out of contract for a variety of reasons.
- Inspection issues
- Buyer financial problems
- Buyer's remorse
- Appraisal comes in too low
- Seller can't produce title
- Lender changes standards
And of course there are always strange and unique ways for sales to fail.
What can a seller do?
One of the things I always recommend is for a seller to get an inspection... just like the buyer would. This gives the seller the opportunity to look at the property through the eyes of a buyer. And then act on the results. The BEST time to take care of inspection issues is BEFORE the buyer has them.
While, as a seller, you usually don't have the ability to derail financial problems on the buyer side, or buyer's remorse... and certainly not things like changes in lending standards... and even title issues (the closing attorney will find them), YOU CAN often figure out if there will be appraisal issues.
Appraisers are VERY conservative in the current environment. While I wouldn't tell every seller to run out and drop another $300 on an appraisal, it wouldn't be a terrible idea to get your agent to check with one of their lenders to see what the AVMs (Automated Valuation Models) say. Check Zillow, too. It isn't the last word, but it gets you in the realm. Most homes are fairly easy to value. There are similar comparables in the same neighborhood, so an appraiser can grab those, make a few adjustments and come out with a value.
But, in addition to your real estate agent's CMA (Comparable Market Analysis), getting a real appraisal may be a good idea for an unusual home. Remember, though, appraisers issue an opinion, so while one might assign an agreeable value, another may not.
The best tactics are to go into the process aware of the pitfalls, and do what you can to minimize the poor outcomes. Keep your property clean and neat and in good repair. And be flexible with the buyer... Sometimes the next offer is just as good as the first one, but we often see the best offer is the first one to hit the table.
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