Selling real estate can be just as much work as buying. There are so many things to worry about as you prepare your home to list on the market. Then you have to worry about the real estate agent you will hire to help you get the house sold. After that, you have to worry about who will be coming in to tour your home throughout the week. Will you hold an open house? Do you take the first reasonable offer you are presented with? Our blog was designed to assist you through the selling process a little bit easier.
Once you make an offer on a home that is accepted by the seller, the price is not set in stone. There are several things that can happen that will actually affect the price that you pay once the deal is finished. Be aware of these 2 things that can alter the price.
The Home's Appraisal Value
A home may have been sold for $50,000 over the list price, but that does not mean the home is worth that much money. Part of the mortgage process will require getting an appraisal, because the bank wants to know how much a home is really worth. What typically happens if the appraisal comes in below the offer price is that the bank will only loan money up to the appraised value. If the appraisal is $50,000 below the accepted offer price, the buyer will need to come up with the cash to offset the difference.
Sellers know that if one buyer has this problem with the price, others will too. Unless the buyer is offering to pay fully in cash, they will never get the mortgage for the higher price of the house. This causes the offer to come down closer to the appraised value in the end through negotiations, because if the seller cannot get a mortgage, they'll have to walk away from the house.
The Home Inspection
Many buyers decide to get a home inspection done prior to purchasing a house. It is their best opportunity to walk through the home and find things that are potentially wrong with it. If the inspection comes back with major items that need to be repaired, the buyer can approach it in two different ways. They can ask the seller to lower the price of the home or the buyer may ask the seller for concessions at closing.
While these two things may seem like the same thing, they actually are not. Lowering the price of the home will cause the loan value to be lower, which can see some additional savings over the years in the form of less interest paid. Concessions at closing will help pay for any closing costs that the buyer has to pay for, which is less money that needs to be spent up front. Each method has its own pros and cons which depend on if you need the cash now or later.
For more questions about purchasing homes for sale, make sure to ask a real estate agent that is familiar with your area.
Share30 May 2016
