Sellers beware! If you’re selling your home then as a seller it’s important to understand the different types of buyers that you’re going to contract to Title. We want to be cautious when receiving an offer from buyers coming in with little to no money down. We also want to be aware of receiving an offer with Earnest Money that’s below real estate standards. There are two distinguishing facts that might make the deal a little insubstantial. Firstly, if your offer has no money down, chances are you’re dealing with buyers that can’t afford this house with the exception of making the monthly payments. During the Escrow period in the event that the lender requires more money from the buyers, there’s a good chance they might not have the liquid assets to move forward. Secondly, when receiving an offer with Earnest Money, you want to make sure that you get at least 1% of the purchase price. If your contract in escrow falls apart due to buyer reneging, what happens then? Hopefully, the Title Company reviews each party and you the seller will get the 1% Earnest Money due to non-compliance from the buyers. Having this ensures your compensated for the time your home has been off the market.
What about the aggressor types that just want a deal? Those bullies will give you a negotiations nightmare from the beginning of establishing a sales price to the Inspections. Most likely, you’ll find the bully buyers looking at properties that have sat on the market for months and or looking for fixer-uppers. If you’ve had your home on the market for a long time with no offers, it makes it difficult to avoid not getting into contract. You might take a small loss with what you thought you would net. The alternative is to sit tight and wait for another buyer if you can financially sustain. Don’t forget that you’ve been paying your monthly mortgage so factor any additional time on the market and deduct it from your expected net proceeds. The other factor is the Home Inspection. In most cases, the bargain hunters are ruthless negotiators and will ask for everything to be fixed in the inspection report. Hopefully, your agent will set them straight in regards to what’s expected to be corrected. If they’re asking for you to paint a room color because they don’t like Pink, well they can do it themselves. The expected items to be corrected are listed as such: Roof, Plumbing, Electrical, Foundation, Structural and HVAC. Remember that the contract calls for the seller to make sure that all those items mentioned above are in working order according to the Arizona Association of Realtors Contract.
Now let’s identify another type of buyer. We have some folks looking to find that one house they can relax, enjoy and dream about. Those are great buyers because if they fall in love with your home emotionally, they will pay just about anything if it’s truly their dream home! They may start out negotiating the original offer but will be cautious about not insulting you with a low-ball offer. Remember that every buyer want to feel like you the seller is working with them. You don’t have to give the farm away, but they will expect you to meet them half way or at least a 1/3rd. If we’re talking about multiple offers then you’re in the best place you can be as a seller. You now have a counter for all the offers called “highest and best”! It means exactly what it says. In a situation like this you will most likely receive an offer above the listed price and can then also negotiate for a higher Earnest Money and to exclude the Inspection Period.
The last type of buyer is the out of state offer that comes in, and you’re excited because it’s probably a quick Close of Escrow with acceptable terms. The only problem with an offer like this is the one fact that it’s “sight unseen” and the ability for them to cancel within the Inspection Period if they ever have one done. Remember that we have a couple of issues to review with this type of offer. Let’s look at this scenario; the husband and wife come to view the house the last day of the inspection period. If one of the couples or both agree that the pictures seemed much nicer than reality, chances are they will cancel the contract. Now you’ve taken the house off the market, and the buyers give you some excuse to get out of the contract while still in the inspection period. You’re now in a situation where the buyers get their Earnest Money back, and you’ve taken your house off the market during this crucial time on the Multiple Listing Service.
We all want the best buyers and the most qualified that are financially responsible. We sellers never know what’s going to come to the table. Just make sure that your real estate professional goes through these different scenarios and educates you by making the best decision based on qualifications and contract at hand.
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