Selling A Home
By Gustan Cho
Housing values have increased in the past couple of years throughout the United States, especially in California, Florida, and Illinois where the 2008 real estate collapse and great recession have plummeted real estate values. Millions of homeowners have seen all of their equity evaporate and were left with mortgage loan balances that were greater than the values of their homes. In order to sell their home, homeowners needed to come up with cash at the closing table since the value of their mortgage loan were higher than their property values. Many homeowners gave up on selling their homes and thought that they needed to live in their home with an underwater mortgage for many years until the real estate values came back up. Good news is that many homeowners with underwater mortgages can now consider selling their home. Many homeowners do not realize the extent on how much their home values have appreciated. Selling a home requires proper planning if the homeowner is trying to get top dollar. You can easily list your home as is, you will get an offer with a home buyer, and you enter into a contract and close on your home. This process sounds easy but selling a home fast for the amount you owe on your mortgage loan and selling a home to get the top price require two different tasks.
Mistakes To Avoid When Selling A Home
Pick the right realtor who you get along with. Realtor’s commissions needs to be paid by the seller and it is not cheap. Realtors charge 6% of the sales price and that can be a large chunk off your sales proceeds to you. 6% on a $200,000 purchase price is $12,000. Many homeowners feel that whatever a realtor can do that they can do themselves. This can be true but realtors are experienced licensed professionals who can offer you top dollar for your property and sell your property faster than you can sell yourself. Realtors will not just show your home to anyone who dreams of owning a home some day. Realtors will qualify the potential home buyer and will review the pre-approval letter and some realtors will go as far as contacting the mortgage lender of the potential home buyer to make sure that the home buyer is a solid pre-approved home buyer and not just a wanna be home buyer. Realtors can also help home sellers to price their home. Sellers cannot overprice their home because if the home does not appraise out for the home buyer, the deal will not happen and the price needs to be dropped. Trying to save money and list your home for sale by owner is a great idea but if you intend on selling your home fast at the best price, the 6% commission you need to pay out is worth every penny.
Get Pre-Approved Before Listing Your Home
If you are thinking of selling your home and purchasing another home, I strongly suggest that you get pre-approved for a mortgage loan for your potential next purchase. You do not need to have a subject property. Your mortgage lender can qualify you for the maximum loan amount you qualify for. Many times people make mistakes in assuming that just because they have great credit and good income that they automatically qualify for a mortgage loan and do not get pre-approved for a mortgage loan for their future home purchase until they have a signed real estate purchase contract from a home buyer. You can have great credit and good income and there could be potential issues in qualifying for a mortgage loan. For example, you can have a great credit score and great income but if you had one or more 30 days late payments on your mortgage payment history in the past 12 months, it can be a major problem. If your credit report contain errors, it can take time to correct errors. If you have perfect credit but have high credit card balances, those high balance on your credit cards will definitely lower your credit scores. Just paying down your credit card balances can sky rocket your credit scores where you can qualify for a much lower mortgage rate. Paying down your credit cards automatically does not post right away on your credit report. If you were to pay down your credit cards today, it can take up to 45 days for it to reflect on your credit report.
Make Sure That Your Home Is Clutter-Free
The first impression a home buyer has when looking at your home is the most important. Homes that have tons of clutter will be a major turn off, especially for first time home buyers. Removing clutter from your property is not costly and will make a major impact on how well your property shows.
When taking pictures, make sure all clutter is removed from the property including if you have multiple vehicles. Make sure that you take photos in a sunny day and areas of the home that do not show well, try to avoid taking pictures there or take a distant picture so the defects are not so obvious.
What Do You Do When Home Buyer Requests Minor Repairs To Be Done?
I have seen countless of cases where the home seller feels that they negotiated their home purchase contract at a very low price and the home buyer’s appraisal came back with required minor repairs or the home buyer has ordered a home inspection and the home inspector noted several repair items that needs to be done but the home seller totally refused. Selling a home can be an emotional period of time for the home seller but homes do not sell like cars. It takes time to have a home under contract and it is not unreasonable for a home buyer to ask a home seller to do minor repairs. When it comes to appraisal issues and the appraiser notes that repairs needs to be done, the repairs needs to be done in order for the appraiser and mortgage lender to approve the mortgage loan. There is no negotiations on this part. Whether the home seller pays for it or the home buyer pays for the repairs, that is a different issue. When repairs are requested, a home seller should do the repairs instead of risking killing the deal.
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