Eleanor Osborn's Blog
Selling a home takes patience. Especially when you’re balancing your time between settling into your new home, and keeping up with your work and family life. So, when you’ve finally gotten to the point of accepting an offer on your home, you’ll probably breathe a sigh of relief--and you should! However, there are still a few more things that will need to happen and a couple of things to consider before closing the deal on your home sale.
Contingencies on the purchase contract
A purchase contract typically includes contingency clauses that are designed to protect the interests of both the buyer and the seller. These clauses mean that the contract is contingent upon the actions being completed before it can be legally valid.
There are three main contingencies that will likely be included in the purchase contract before closing--inspection, financing, and appraisal.
The inspection contingency allows the buyer to have the home inspected by a professional before closing (the time should be specified within the contract, but the inspection should usually occur no more than two weeks after you accept the offer). A home inspection lets the buyer know what to expect in terms of repairs that the home needs now or will need in the near future.
Since the vast majority of buyers will be purchasing their home through a loan, a financing contingency is included to allow the buyer time to secure their mortgage. Getting pre-qualified and pre-approved makes this process easier, but the buyer will still have to finalize and close on their mortgage before their financing is official.
This clause exists to protect the buyer in the event that their mortgage application is denied, ensuring that they aren’t penalized.
The third contingency most often found in purchase contracts is a home appraisal. The buyer will order an appraisal and then the appraiser will reach out to you to find a day to come and value your home.
If the home is then appraised at the amount agreed upon in your contract, this contingency is met. However, if the appraisal comes up lower than the purchase amount, the buyer can renegotiate the price.
Walkthrough and closing
Once the appraisal and inspection have been met and financing secured, the buyer will have a chance to do a final walkthrough of your home. The walkthrough usually occurs no more than two days prior to closing on the sale. A walkthrough allows the buyer view the home one last time to ensure that the condition of the home hasn’t drastically changed since the home was inspected or appraised. So, make sure the buyer is aware of any changes you planned to make to the home before closing.
Now you’re ready to close on your home sale. You’ll receive a disclosure form to review (read it carefully!) and sign. Once closing is complete, ownership of the home is officially transferred to the buyer.
While the closing process does include several steps, it’s important to be available and cooperative along the way to ensure a smooth sale and transition into your new home.
If you receive an offer to purchase your home, you may have only a limited amount of time to decide whether to accept this proposal. As such, there are several factors you'll want to consider to determine whether to approve an offer to purchase your home. These factors include:
1. The Price of Your Home
If you established a competitive initial asking price for your home, you should have no trouble determining whether an offer to purchase falls in line with your expectations. Thus, if an offer to purchase your home is at or above your residence's initial asking price, you may want to accept a buyer's proposal and move forward with a house sale.
Of course, if an offer to purchase your house falls below your residence's initial asking price, you should still evaluate the proposal closely. If you feel the offer to purchase is the best proposal you might receive, you may want to accept it.
2. The Current State of the Local Housing Market
Examine the current state of the local housing market – you'll be glad you did. If you discover you are operating in a buyer's or seller's market, you can assess an offer to purchase your home accordingly.
If you find a buyer's market is in place, you may be more inclined than ever before to accept a competitive offer to purchase your home. Because in this market, the number of sellers exceeds the number of buyers, and rejecting a homebuying proposal does not guarantee you will receive better offers to purchase in the near future.
Comparatively, if a seller's market is in place, you may want to take a wait-and-see approach to any offers to purchase your residence. In this market, the number of buyers exceeds the number of quality houses available. As a result, you may receive dozens of offers to acquire your residence if you wait for the local housing market to develop.
3. Your Home Selling Goals
You should feel good about accepting an offer to purchase your house. Therefore, if an offer to purchase enables you to achieve your home selling goals, you may want to accept it sooner rather than later. By doing so, you can take the next step to finalize your house sale.
As you debate how to proceed with an offer to purchase your house, you may want to consult with a real estate agent too. This housing market professional may be able to offer housing market insights that you won't find anywhere else. Plus, he or she can provide honest, unbiased home selling recommendations. And if you ultimately decide to accept an offer to purchase your residence, a real estate agent can guide you along the final stages of the property selling journey.
There is no reason to settle for a subpar offer to purchase your house. But if you consider the aforementioned factors, you can make an informed decision about whether to accept, reject or counter a homebuying proposal.
Ready to submit an offer on a home? Putting together a proposal that stands out in a home seller's eyes is key.
With the right home offer, you can improve your chances of securing your dream house without delay. Plus, dedicating time and resources to put together a home offer that works for both you and a home seller is sure to accelerate your journey from homebuyer to homeowner.
How can you improve your chances of submitting an offer that a home seller is sure to accept? Here are three tips to help a homebuyer submit a standout home offer.
1. Get Pre-Approved for a Mortgage.
In many instances, a home offer may be contingent upon financing. And if a homebuyer has to secure financing after submitting a proposal, this individual could risk missing out on an opportunity to purchase his or her dream house.
Comparatively, a homebuyer who gets pre-approved for a mortgage will have the necessary financing in place when he or she submits an offer. As a result, this individual's offer may stand out from other proposals, particularly to a home seller who wants to speed up the home selling process.
2. Consider a Quick Home Inspection.
Don't ask the home seller for 15 or 30 days to conduct a home inspection. Instead, be ready to conduct a home inspection as soon as possible.
You may need only a few days to set up a home inspection. As such, if your offer includes a request for five or 10 days to complete a home assessment, it may stand out from others.
Also, if you find your dream home, you may want to consider purchasing the house "as is." Doing so may allow you to forgo negotiations between a homebuyer and home seller after a home inspection.
If you submit an "as is" home offer, you will be able to learn about the condition of a property before you buy it. However, after a home inspection, you will be unable to ask the home seller to complete repairs. At this point, if you find the house fails to meet your expectations, you can either walk away or buy the home in its current condition.
3. Add an Escalation Clause to Your Offer.
An escalation clause can help you compete against other homebuyers in a fierce real estate market. It enables you to increase your offer by a set amount over any other bids to a certain level. As a result, including an escalation clause in your home offer can help you avoid the risk of overpaying for a house and improve your chances of securing your dream residence at the same time.
Ask your real estate agent to include an escalation clause in your home offer. Your real estate agent can help you submit the perfect proposal, and ultimately, boost your chances of getting a "Yes" from a home seller.
Use the aforementioned tips, and you can bolster your chances of getting the right house at the right price.