Unbeknown to the seller, a little luck never hurts in the closing of the transaction for the
agreed value, with the agreed terms.
Some sellers would be happy that the closing date is far away, so they have more time
to pack and find another place to live. They celebrate that the property is under
contract, only to find out one week later, the buyer is making demands due to the
result of the necessary house inspection, as stipulated in the contract.
In this situation, the seller has to agree to repair the items noted on the inspection
report, or credit the buyer the money for the repairs at closing. This normally equates
up to 1.5% of the gross selling price, according to the inspection result values.
This means $4,500.00 out of your pocket on a $300,000.00 house, but if the agent had
negotiated an as-is sale, or protected you against the buyer after the inspection, that
money could have stayed in your pocket.
The next hurdle that comes hitting you hard is the appraisal. The appraisal came in
$25,000.00 less. So an appraiser from a different county, having a bad day, just
lowered the value of your house. The worse news is that appraisal sticks to the
property for the next four months on an FHA or VA loan.
If the seller wants to sell now, they need to come to a new agreement with the buyer;
however, if the buyer does not have all the extra money and the seller does not reduce
the price, there is no sale. But if your agent had negotiated from a wiser standpoint at
the beginning, the appraisal would have come for the agreed value.
The buyers loan can be facilitated by a direct lender whom the Seller’s agent has a
relationship. So regardless, if the appraiser has a bad day or not, they will not trash the
value of your home because they appreciate the continued business relationship with
the agent’s lender.
In this situation, the seller would have saved $25,000.00 or very close to it. If there was
a difference between the contract price and the appraisal price, it could have been
demanded upon the buyer.
When the closing date comes, the property must be completely empty and clean. If the
loan is not ready to close, an extension is requested by the buyer and the seller has no
choice but to grant this extension. Extensions, extensions, extensions! More extensions
are requested and granted, just to find out weeks later that the loan has been denied.
MLS statistics show that this happens in 8% of all pending sales – 1 in 10 negotiations.
This could have been avoided because the listing agent should have negotiated for the
listing agent’s direct lender to originate the loan. This lender, to bond the continued
business relationship and source of business, would have made sure that this would-be
buyer was qualified to buy this house. Foreseeing buyer problems early on would have
prevented the worthless transaction all together, or solve the issue from the get-go to
close on time.
In addition to as-is, appraisal, and closing issues, getting answers when you need them
and a clear strategy of how this is going to get done is the difference between a rookie
or even seasoned agent, and a Top Producing agent such as Alex.
These terms are negotiated when we sell the property, and before you sign the
Contract to Sale & Purchase.