Selling your home is a big step to take in life. It can mean that you are ready to take your career in a different direction, you want to be closer to a loved one, or maybe you are trying to move on to the next chapter of your life. 

Regardless, if this is the first time that you are selling a home, you may not know what to expect from the first offer on your house. You also may not be prepared for the process it takes to sell your home. 

The first right offer is something that you should be looking for in this situation. Houses tend to get taken off the market very quickly, with the average time in the United States being just 18 days. 

But, how do you know if your first home offer is the best that you are going to get? When selling a house, should you take the first offer? 

This guide will explain to you when the first offer may be the right offer for you. 

Personal Circumstances 

The first factor that you have to consider when selling your home is what your personal circumstances are. Once you go over why you are selling your home, you should have a better idea of how quickly you will need to do so. 

Certain factors are going to motivate a seller to speed up the process more than others. 

A big example of this is people who are moving a considerable distance for a new job or a step up in their career. Of all of the reasons that Americans have for moving out of state, 42% of those people said the primary reason for moving was because of their job and/or career. 

If you are moving to start a new job, you may only have a few weeks or even a few days before you have to show up to your new city or state to start your job. That means that you are more pressed for time and will probably be less likely to want to deal with a lengthy sales process. 

In this situation, you probably will want to part ways with your original house as fast as possible to make your new move smoother. Any situation that involves you having to be in a new destination sooner rather than later is likely going to motivate you to cut ties with your old town or city as fast as possible. 

Having Another Mortgage 

One thing that you need to consider as a seller is what your financial situation is. The reason for this is that most people who are selling a house are looking to buy a new house to live in. 

Of course, there are exceptions to this rule such as if someone is selling an inherited house or if they are moving in with a spouse. 

However, let’s assume that you are looking to buy a new home while trying to sell your original home. Let’s also assume that this new home is going to be around the same price range as your original home. 

You could find yourself in a situation where you find the new home that is perfect for you and you are in a competitive housing market. That means that you are going to have to make a lucrative offer quickly and be ready to pounce on it. 

If your bid wins for the new home, that means that you are going to have to come up with the money to buy that home as soon as possible. With your old house still being on the market, that could force you to have to take out a second mortgage. 

Taking out a second mortgage could cause problems such as adding more interest to your debt that you are going to have to pay off later. Even worse, you may not financially qualify for another mortgage and you could potentially lose your dream home because everything could be delayed by your original house. 

If a seller is actively looking for a new home, they may be more likely to accept a quick sales process for their old home. 

Time of Year 

Believe it or not, the time of year that you are trying to sell your house matters a lot. The toughest time of year to sell a house tends to be during the winter. To be even more specific, December is regarded as the toughest month to sell a home. 

So, let’s say you listed your home for sale in the beginning of November. From there, you played the house offer waiting game and have not seen an offer that you found acceptable for about three weeks. 

Thanksgiving is fast approaching in this situation and after that, a lot of buyers are going to be focused on Christmas activities. During the holidays, buyers tend to be too distracted to give 100% of their focus towards buying a new home. 

With that said, this could leave a seller in a really bad spot. It can force them to have to take some money off of their asking price or even force them to hang onto their old home a lot longer than they may have wanted to. 

If you find yourself trying to sell a home and are quickly approaching a colder season for home sales, you may want to consider an early offer that is reasonably close to your asking price. 

The Right Buyer 

As a new seller, you are probably wondering what the right buyer even is? Well, the right home buyer is someone who has as few of hurdles as possible to jump through in order to close this transaction. 

Let’s say you get two different offers for your home. The first offer is about $10,000 below your asking price but the second offer matches your asking price. 

On paper, you are probably thinking that there is no doubt that you should take the higher offer. Well, this is not always the case. 

In this scenario, the first buyer is coming in with a cash offer while the second offer is pending a mortgage approval. What this means is that a seller would not have to wait at all to complete a deal with the first buyer but with the second buyer, they run the risk of the mortgage not being approved. 

If the latter happens to the seller, it can set them back a lot of time and they may lose out on a legitimate buyer. 

Another example is if the seller has a buyer that offers less money but with no contingencies versus another buyer that comes in with a higher offer but more contingencies. These may include a house inspection, removal of a pool or trampoline, or fixing some holes in the wall. 

Some sellers may be willing to meet these contingencies but for others, they may not find it to be worth the time to do all of that work themselves. If you fall into that category as a seller, perhaps accept the first reasonable offer that does not include any contingencies. 

Time on the Market 

Finally, take into consideration how long your house has been on the market. If it has only been on the market for a week or two, it may not seem like a big deal to reject an offer you felt was low and to wait. 

However, there is no guarantee when the next offer is going to come and you run the risk of giving the impression that there is something wrong with the house. This tends to happen when a house has been on the market for a few months without being sold. 

Most of the time, this means that buyers believe that there is either something wrong with the home or that the asking price is way too high. That can give a buyer some leverage if they have that mindset and it can result in you getting not only lower offers than you deserve but lower offers than you may have had before. 

Keep track of how long your house has been on the market and if you get one close to asking price after a few weeks, consider accepting it. 

Know When to Accept the First Right Offer

These are five of the biggest examples of when you should accept the first right offer for your home. If you keep all of these scenarios in play, you are more likely to get the fairest value on your home as possible. 

Do you want to know how much your home is worth? Use our home valuation tool today to get started.

The post Should You Take The First Offer On Your House? appeared first on iBuyer Blog.

Powered by WPeMatico

Like toilet paper at the start of the pandemic, homes are flying off the shelves all across the country. Existing home sales hit 6.1 million last year, which was the highest level since 2006. Believe it or not, we’re on track to beat that in 2022!

If you’re buying or selling a home, preparing for closing can be stressful, especially if this is your first time. Fortunately, all you need is a checklist to make it easier to prepare. Here’s a comprehensive home closing checklist to help you reach a smooth and successful closing!

The Ultimate Pre-Closing Checklist

Before we get started, what is a closing checklist, and why is it important?

Well, there are two types of closing checklists for both sellers and buyers, and we’re going to discuss both of them. The first includes everything you need to do before closing. This is the essential checklist for closing on a house!

1. Finalize Contingencies

As a seller, you may have several contingencies hanging over your head before closing. Finalizing these should be your top priority. As a buyer, you should verify that these contingencies have been finalized ahead of closing.

For any home inspection contingencies, buyers may back out of a sale or request that something is fixed before closing. If that’s the case, it is the seller’s responsibility to handle these issues ahead of time. 

With an appraisal contingency, buyers may hire a third party to evaluate the fair market value of the home. If the appraised value is less than the sale price, this contingency allows buyers to back out of the sale without forfeiting any applicable deposits. If you haven’t had an appraisal yet, find your home value today to get ahead!

There are also financial contingencies. These give buyers the right to back out if their mortgage approval falls through. Buyers will have a specified period (stated in the sales contract) when you have to obtain a loan that will cover the cost of the home.

If any of these contingencies apply to your sale or purchase, finalizing them ahead of closing is essential. Otherwise, the closing could be delayed or canceled altogether, leading your sale or purchase to fall through. If you have a desired sale/purchase timeline, this could easily ruin it.

2. Clear the Title

When you buy a home, you “take title” to the property, establishing legal ownership. This is a process confirmed by public land records in your town. Your mortgage lender will require a title search to ensure the title is clear. In most cases, you’ll need to purchase title insurance to protect you from legal claims to the house.

The reason for clearing the title is that distant relatives, an ex, or another family member can later claim that they actually own the home and the seller had no right to sell it. Clearing the title will ensure that this doesn’t happen, which will directly save you money and potential future headaches!

Homebuyers are entitled to choose a title company to handle this process. They can get recommendations from their real estate agents, mortgage lenders, or friends. Before making any commitments, ensure that you review the reputation and licensure of each company online.

3. Review Your Documents

Always read and review closing disclosures, contracts, and other documentation before closing. Even if your real estate agent gave you all of the information you need, it doesn’t hurt to look through everything once more before making your final moves. 

4. Get Homeowner’s Insurance

You’re going to need homeowner’s insurance anyway, and your lender will likely require it for final approval. Get on top of this as soon as possible, along with any other insurance policies you may need. These may include title insurance, mortgage insurance, and others.

This could cause unnecessary delays in the closing process, so shop for the policies that fit your needs and open them as soon as possible.

5. Conduct a Final Walkthrough

Your final walkthrough should take place around 24 hours before your closing. Investigate your new home and ensure that everything is as stated and that nothing has changed since you last viewed it. If there were contingencies on the status of the home, use this time to verify that your concerns have been addressed. 

This is also a good time to ensure that the sellers have officially vacated the premises, have not left any messes behind, and that you will be ready to move in after closing.

Remember, neglecting any of these can cause a sale to fall through, which is more common than you may think. 3.9% of sale contracts, which is about 1 in 20, fall through before closing!

6. Get the Final Mortgage Approved

By this point, you’ve probably been pre-approved for a loan. Now, it’s time to finalize that approval with the underwriting process.

Underwriters are like mortgage investigators. Their job is to verify all of your claims on your application and ensure that you’ve represented yourself and your family truthfully. This will likely involve a credit check, home appraisal, and verification of your financial portfolio.

This process typically happens right before closing. Try to avoid anything that will harm your credit score in the short term around this time, including opening new accounts. Hard inquiries won’t last for long on your credit score, but they could temporarily harm it, which could be devastating timing right before underwriting!

7. Prepare For Closing Costs

If you’re a first-time homebuyer, you may not know all of the closing costs that come with closing on a home. It’s best to prepare for these in advance, especially after the down payment. Common closing costs include:

• Title or attorney fees
• Pre-paid property taxes
• Mortgage insurance
• Lender fees
• Property-related fees

Typically, these costs add up to around 2% to 5% of the home’s value. Having these costs prepared in advance will ensure that you won’t meet any unexpected financial trouble. You can use a closing cost calculator for a better idea but always aim to save on the higher side, just in case.

8. Consult With Your Agent

Your real estate agent is your primary resource for your decision to purchase or sell your home. After finishing this checklist, consult with them before closing and ensure that you are getting a good deal. Feel free to ask questions or voice your concerns about the sale/purchase and ask for their professional opinion.

If you have any qualms, your agent should understand and respect that. They’re there to help you get the best deal possible, so keep shopping around.

However, not all of us want to go through an agent and spend thousands of extra dollars. If you want to sell your home fast and get a cash offer with a fair appraisal, learn how to close fast!

Day-Of Closing Checklist

As the closing date closes in, there are items you’ll need to bring with you. If you don’t have them, it could delay the closing process. Here’s your final closing on a house checklist!

Photo ID

Your lender will need to make copies of your photo ID to open your mortgage loan. If you have a cosigner, like a spouse, they will also need to bring their photo IDs.

Cashier’s Check

Sellers and buyers will need to pay a cashier’s check in the amount specified by their lenders. This is known as your “cash to close,” which is the total amount needed to close (or open) your mortgage loan.

Proof of Insurance

For buyers, you will need proof of insurance to open your mortgage loan. Most lenders will need to verify your insurance, credit score, and other aspects before opening your loan officially, even if you were pre-approved.

Documentation

Bring a copy of your contract with the seller, the home inspection report, and any additional paperwork requested by the lender. Feel free to contact your lender ahead of time and ask if they need anything specific, and try to keep everything in one place to ensure you don’t forget anything!

Use This Closing Check List Wisely

Now that you have your definitive house closing checklist, you can have a smooth transition into your next chapter in life. Closing on a house is a big deal, especially for the first time! Yes, there is a lot to do, but it doesn’t have to be stressful if you know what you’re doing.

The post Closing On a Home Checklist: The List For Sellers appeared first on iBuyer Blog.

Powered by WPeMatico