Anyone who’s ever sold a home knows that great feeling when a buyer makes a good offer. But before that offer becomes a sales contract, a problem might come up that could kill the deal. Knowing about the most common “deal-breakers” can prepare you either to head them off or to solve them quickly, before the buyer walks away.
These potential pitfalls fit into three broad categories: financial, physical and psychological. You may not be able to do much about human nature, but problems in the other categories can be managed.
Two financial obstacles can usually be avoided up front.
Poor pre-qualification means the buyer can’t get a mortgage for the sale price. And that means the offer doesn’t have much value.
A good way to avoid wasted time, and missed opportunities to get offers from other buyers, is to ask for a pre-qualification letter as soon as you get an offer. This comes from the buyer’s mortgage provider. It’s based on such important factors as the buyer’s income, debt load and credit ratings. The letter will tell you what price range the buyer can afford.
An appraisal that doesn’t match the offering price can stop a sale in its tracks. While a disappointing appraisal won’t always kill a deal, it will require reopening the negotiation to lower the price, or force the buyer to come up with more cash for a down payment. The best way to avoid this problem is to be realistic about your asking price. Trust your Realtor to advise you about what comparable properties are worth.
The house’s physical condition can also be a barrier to closing the deal. A house needing significant repairs can make a buyer walk. Physical flaws have to be corrected, or at least factored into the sale price. Sometimes a buyer with high expectations will insist that every small issue be fixed. And sometimes sellers will dig in their heels and refuse to correct problems discovered late in the sales process.
I advise that any major repairs needed be made in advance, at the seller’s expense. These almost always pay for themselves. The higher asking price for a home in excellent condition will more than cover the cost of repairs. This work also makes it more likely that a good offer will get made sooner.
A seller can stay in front of this issue by hiring a home inspector to discover anything that might be a problem. I have more to say about home inspections in an article from March 2014.
One important area a home inspector will check out is the crawl space. This out-of-sight, out-of-mind area can be a problem if it has excessive moisture. That can encourage termites or mold, or lead to structural decay. All of these, obviously, are problems a buyer doesn’t want to worry about. An inspection will tell you whether the source is from an external drainage issue, a plumbing leak or dripping air conditioner, or just dampness rising from the soil. Each of these problems is easily correctable with a little advance notice.
The final reason deals fall through, unfortunately, isn’t as easy to solve. People can be unpredictable. Buyer’s remorse, conflicts between a couple, or other impossible-to-predict human-nature issues can also make the best-looking deal fall apart without warning.
For those problems, we just have to be philosophical, tell ourselves it wasn’t meant to be, and move on. We’ll find you the right buyer!
Have a question about buying, selling or any other real estate matter? Let me know and I’ll address it in a future article.
Michelle Clark is a broker with Intracoastal Realty, based at the Wrightsville Beach office. She is an Accredited Luxury Home Specialist, ALHS and also a Short Sales and Foreclosure Resource. Whether you are buying, selling, or investing, know that Michelle and her team will go the extra mile for you. To learn more about Michelle and Intracoastal, go to www.intracoastalrealty.com. You may contact Michelle at [email protected] or 910-367-9767. Like Michelle’s team on Facebook at www.facebook.com/MichelleClarkTeam.
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