Deal Killers to Watch Out For

By
Real Estate Agent with Sarah Miller - RE/MAX Bryan College Station

You have just negotiated a deal with a buyer and managed to sign the sales contract.  The good news is that you’re almost there.  The bad news is that you’re not quite there.  Even though the buyer has signed the sales contract, there’s still room for the deal to fall through.  Two big parts of the for sale by owner housing transaction still lay in the balance – the inspection and the buyer’s mortgage.

Housing Inspections

With most standard sales contracts, the buyer has the right to have the  property inspected.  If these inspections aren’t satisfactory to the buyer, the deal could end up turning bad.  There are three major types of inspections that the buyer can have completed.

  • Termite Inspection.  Depending on your state’s laws either you or the buyer could be responsible for the termite inspection.  If it is your responsibility as the seller, then you must have a letter from a licensed pest control company that states your  home does not have any termites.  Whether you or the buyer pays for the inspection, it is your duty to clear up the problem before closing.
  • Roof Inspection.  Should the roof inspection result in repairs to be completed, you are required to cover the repairs.
  • General Inspection.  This is an inspection of major appliances, air conditioning, heating, plumbing, and electrical systems.  As the seller, you are required to repair or replace any of these items that fail inspection. 

Avoid inspection problems by having your own inspection completed before you put the home on the market.  That way you have time to make the repairs before a buyer’s inspector catches them.  In many cases, it is cheaper to make these repairs when your own inspector finds them.

Alternatively, you sell the  home “as is.”  Such a stipulation must be included in the sales contract. 

Mortgage Fall-Through’s

Your buyer’s ability to purchase the for sale by owner home is contingent upon his or her approval for a mortgage.  If the buyer does not get approved for a mortgage that is large enough to buy your , it is a major deal killer.  Without financing, it is impossible for the buyer to purchase your .  You certainly aren’t going to give it away. 

What can you do to avoid this problem?  Pre-qualify your buyers.  Ask prospective buyers for a pre-approval letter from a lender.  Serious buyers will have already gotten pre-approved for a mortgage.  Make sure the amount the buyer has been pre-approved for will cover the sales price of your  home. 

You might also work with the buyer to obtain financing.  If you are working with a real estate attorney, he or she might be a resource that can assist the buyer in contacting a lender or mortgage broker.  Alternatively, you can contact a local real estate agency to get recommendations on lenders or brokers.

It is a good practice to work only with those buyers that have been pre-approved for a mortgage. This diminishes the likelihood of a deal-killing surprise later on in the for sale by owner housing transaction.

 

To get the best buy and sell out prices, refer to Sarah Miller and see your property appreciated for what it is worth.

Posted by

If you have questions about the real estate market in Bryan College Station or about buying or selling a home in Aggieland, please contact me, YOUR College Station Realtor!

Sarah Miller

RE/MAX Bryan College Station

http://www.sarahmillerinc.com

979-255-1904

 

 You TubeRealtor College StationRealtor College Station

 

Comments (4)

Laura Murray
Weichert - Silver Spring, MD
Search Montgomery Co., MD for homes www.MDRealEstateOnline.com

Around here 50% of contracts do NOT make it to closing due to problems with financing.  I am always surprised by the number of folks who want to find a house first and then find out if they can afford the house - seems backwards!

Jul 13, 2012 02:03 AM
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

A lot of deals fall out as you put for many reasons.  To know of issues ahead of time help to be prepared and give the buyers a full understanding of the property.  Therefore, it creates a less likely opertunity of a colapse sale.

Jul 13, 2012 02:04 AM
David Farrell
David V. Farrell Co. - Garden City, NY
Licensed NY State Real Estate Broker

Sarah,  I like your article very much.  I've always been on the fence about having a house pre-inspected.  Once I know something as the broker, I must disclose it to everyone looking at the house.  I always feel there might be some minor issue than nobody notices or cares about and the Home Inspector misses.

On another note, I always make sure to point out the problems in a house that are clear.  For example, if the house has fuse box electric or an ancient boiler, I tell the purchasers that their offer took those issues into account.  I try to make it very clear that the Home Inspection is for their edification, not a negotiation strategy, unless something serious is noticed (like a leaky oil tank).

I honestly don't know which is better technique.  But, you don't seem to be doing too badly, so I'm sure it works well for your sellers.  Best wishes.

Jul 13, 2012 02:06 AM
Pat Champion
John Roberts Realty - Eustis, FL
Call the "CHAMPION" for all your real estate needs

Great post and information for all buyers to know before deciding to purchase a home. Pre-qualifying is the first step of the process.

Jul 13, 2012 02:14 AM