One day, and it is often when you least expect it, someone is going to decide your property is just right for him or her and make an offer you can’t – or can – refuse.
By now, you’ve probably realized that real estate makes good dinner party conversations, and in discussing your potential sale with friends and neighbors, you’ve gotten a pretty good idea of what’s selling, what’s not, and how much people have been willing to pay.
When your real estate agent conveys the offer to you, you’ll also know whether he or she thinks the price the buyer has suggested is fair. It may be less than your asking price, but that is part of the process. Take your time and give some careful thought to your response. You don’t have to reply immediately if you’re not certain the price and terms are acceptable to you. Consider the offer.
While you weigh the offer, you’ll want to take into consideration the current state of the real estate market – are houses in your neighborhood selling quickly, slowly, or not at all? Also consider your own time frame – obviously, if you need a quick sale, you’ll have to be more flexible about price than if you have all the time in the world to sell.
One word of caution: Sellers often leap to the conclusion that one offer will lead quickly to others. That’s not necessarily true. The one predictable factor in the real estate market is that it’s totally unpredictable.
If you and your potential buyer are far apart on price you might be able to bridge the gap by offering a few concessions. You could, for example, include appliances, tools, a satellite system, etc., in the sale. You might even agree to make certain improvements, such as repainting or installing new garage doors, for example, before the closing day.
Your agent may be able to discuss various financial incentives such as buydowns, assumable loans, and second mortgages.
Whatever terms you and the buyer finally agree upon make certain every detail of the agreement is included in your contract of sale. After this first step, the buyer will have the house inspected and shop for a mortgage.
Usually, your real estate agent will be able to complete preprinted standard form contracts for you. These forms will have space for any additional conditions of sale. You may still wish to take it to an attorney and discuss it in detail before you sign.
Contracts generally will include the total price, the amount of the down payment, the date upon which the closing will take place, along with a precise description of the property, and any other terms of sale you and the buyer have agreed to include.
What Goes, What Stays
You should try to provide as much detail about what’s being sold and what’s not as you can. Are you taking the living room chandelier but leaving the draperies? Usually, anything that is attached stays. The more fully you spell out the details of the sale, the less room there will be for problems to develop later in the process.
Any real estate agent has a store of anecdotes about buyers and sellers arguing over what goes and what stays. In one case, a sale was almost called off during the closing because the buyer and seller fought like furies over some cobblestones from a walkway that both wanted to keep.
Buyers will also expect your contract to include an assurance that the property conforms to local zoning regulations, has a certificate of occupancy, and contains no elements that violate local, state, or federal laws. This is a requirement most lenders are beginning to demand routinely.
In addition, many contracts routinely give the buyer the right to have a professional inspection of the premises (see “Is the House Physically Fit?”, page 24) before the closing. The seller is generally obligated to correct any problems uncovered during the inspection.
Delays happen frequently, primarily because of the large volume of paperwork involved in completing financing. So you should expect to do a little waiting.
In fact, most buyers will insist that some provision for cancellation without penalties be included to protect them if they’re unable to get a mortgage. They might also ask you to make your sale contingent on the sale of their current home. However, if he or she is only hoping to sell the house and has no firm commitment from a buyer, you’d be foolish to link your home’s sale to his. What you are essentially giving the buyer is a no-cost option to buy your home that sounds something like this: “If I sell mine, I’ll buy yours.”
Another way to handle the situation is like this: If the buyer has a signed contract of sale from his buyer, you might be willing to consider that clause in your contract. You should discuss the situation with your agent, but you also should keep your house on the market. Insert a clause into the contract that gives you the opportunity to accept a new offer and terminate this contingency or the contract altogether.
One final word of advice. You may have been waiting for this moment to finalize financial arrangements for your new place of residence. Just because you have accepted an offer does not mean the sale will automatically go through. There are documents to be processed, home inspections, contingencies, etc., and the buyer must obtain financing. You may spend unnecessary time and money finalizing financing on your new living quarters only to find your hopes dashed because the sale of your present house has fallen through. The more prudent course is to wait until you are absolutely sure the sale is complete.
Hopefully, though, all will go well, and you can move on to the last two steps of finalizing the sale – closing and settlement.