1. Reply in writing.
   Take time to review the offer you have in hand and always reply in writing. Whereas mere handshakes worked in days past, having everything spelled out in writing is the only way to avoid misunderstandings and legal headaches further down the road. You have a number of options after receiving the offer. You can accept the offer as is, make a counteroffer or reject the offer outright. If the buyer is not being represented by a Realtor, ensure they are using legal binding contracts. You can find real estate contracts on FSBOmarketplace.com’s Real Estate Forms page.
2. Learn the buyer’s financial situation.
   While considering your offer, you will want to learn about the buyer’s financial situation. If the buyer is obtaining financing, you will want to get a pre-approval letter from his lender, confirming the buyer’s ability to purchase your property. If the buyer is putting down a substantial down payment or paying cash, you will want to verify his funds with a bank statement or other written documentation.
3. Making a counteroffer.
   Often a buyer’s initial offer is considerably lower than the asking price. Let’s face it, the buyers is trying to get the best possible deal for himself and if it is a buyers’ market, he probably won’t make his best offer. Don’t be insulted or take the offer personally, but review the terms of the offer and by all means make a counteroffer. It is always a good idea to make some concession to the buyer in your counteroffer rather than coming back at full price. You want to make him feel like he has gotten ‘something’ and want to continue negotiating.
4. There is more to consider than price.
   Price is important, but there is more to consider when reviewing an offer. What contingencies is the buyer asking for? Is the sale contingent on the sale of the buyer’s current home? Is a home inspection required? Is there any ‘give’ to the closing date? Does the buyer’s desired closing date work with your schedule? If the buyer offers you full price, but doesn’t want to close until 3 months after you have to be at a new job in another city, full price may not look so attractive. Take all terms and conditions into consideration before responding to the offer, especially if you know the buyer will ask for repairs after the property inspection.
5. Legal contract review.
   Once all parties sign a contract, it is a legal, enforceable document. It is a good idea to include a ‘document review period’ into your contract, giving you time to have an attorney review the contract and making sure you understand all of its provisions.

We hope this information will help reduce your stress. To find a home inspector or real estate lawyer, visit FSBOmarketplace.com’s Real Estate Service Providers page.

1. Home inspection.
   Your contract may allow the buyer to conduct a home inspection to determine the condition of the property and ensure there are no flaws to the property’s major systems. After the inspection, the buyer may ask for repairs to be completed for him to move forward with the sale. Repair requests are negotiable and can cause the deal to fall through if you and the buyer cannot agree. Keep possible repairs in mind when first accepting an offer.

   Any agreed upon repairs will need to be completed prior to closing with an additional inspection from the buyer to determine work has been done in a workman-like manner. Consult with your lawyer to see where your obligations are. Find a Home Inspector.

2. Property Appraisal.
   Once the property inspection is complete and repairs negotiated, the buyer’s mortgage company will order an appraisal of the property to make sure the buyer is not over-paying, and may even hire a surveyor to verify the property’s boundaries. Find an Appraiser.
3. Title Search.
   The buyer’s lawyer (usually associated with the title company) will perform a standard title search on your property to make sure there are no liens or other legal restrictions on your property. Some restrictions might be benign, such as easements (right of way) for storm drains, or even an access road for a neighboring property. If the title search does turn up any liens, your lawyer will advise you; you may be required to clear any problems. Find a Title Company for closing.
4. Removal of conditions.
   If any conditions or contingencies were written into the contract, such as the buyer selling his own house before completing the purchase of yours, then they must be removed (waived) by the date specified in the contract for the sale to go through. Otherwise, the contract becomes null and void. It is a good idea to keep in touch with the buyer as these dates approach, to ensure that everything is on track, and make any changes (such as extending the date of the condition, if you are both willing).
5. Final walk-through.
   A few days prior to or on the day of closing, the buyer will usually perform a personal inspection of the property, to make sure that it is in the same condition as agreed upon in the contract – you are legally obligated to keep the house in materially the same condition. All disputes over repairs or the condition of the property must be resolved before closing can take place.
6. Closing Day.
   As closing day approaches, you should advise your mortgage company that you intend to pay out the mortgage, and let your utility providers know when to shut off services under your name. Your lawyer will take care of all the details needed to close the deal, such as collecting outstanding money, settling the transfer of taxes, paying any loans or liens, transferring the deed to the new owner, and securing title insurance. Find a Title Company or Real Estate Lawyer for closing.

Congratulations on a successful sale!

After the inspection, the buyer has a number of options… he can (1) remove the contingency clause. Or if he is not satisfied with the condition of the property he can (2) ask for repairs to be completed by the seller or (3) merely walk away from the contract and have his earnest money deposit returned to him. Bottom line, the home inspection is a re-negotiating tool for the buyer.

You, the seller, also have options. After being notified of an unsatisfactory report, you can refuse further negotiations and return the earnest money deposit, put the house back on the market and wait for another buyer. Or, negotiate the repairs asked for in the inspection report. You can not only negotiate which repairs are to be done, but who is to do them. You’ll want to spell out whether you will hire a licensed contractor or if the repair is something you can do your self.

It is not unreasonable for you to ask the buyer for a few days to talk with contractors and get estimates for the work that needs to be done. You may also want to consider giving the buyer a dollar amount at closing for them to get the repairs made after the closing rather than you doing the work. This is certainly less hassle and the buyer can make sure things are done exactly the way the home seller wants it done.

All agreed upon repairs must be completed prior to closing. The buyer will have a final walk-through, determining all repairs have been made. The homebuyer may ask to bring their home inspector to this final inspection.

One important point to remember…the inspector is working for the buyer. They are being paid to be nitpicky and will point out minor, even cosmetic repairs. Don’t take offense and stay focused on the major issues that should be repaired.

Here Are 5 Ways To Use a House Value Report aka CMA

1. Selling Your Home- The first and most obvious way to use a comparative market analysis is to compare your home against other homes that have sold in your neighborhood. I wont go into too much detail here since this one is pretty obvious. What I would like to add here is that it is important to take your time in analyzing the data or you may get a false sense of value and be too high or too low by thousands of dollars. Price too high and people will not bother looking at your home, too low and people will think something is wrong with your home and try to negotiate you even lower or again, not even visit.
2. Buying a Home- Yes, that’s what I said! Before you put an offer on that dream home, get a CMA on it to make sure it is not priced above the market or other homes in that neighborhood that have sold before. It’s amazing to me that most Realtors do NOT do this. How would you feel if you paid thousands more for a home than any other home in the neighborhood that compared to your new home? You’d be upside down immediately and it would take years to catch up on that lost equity. Make sure you ask your agent for a CMA before making the offer on your new home!
3. Fighting Your Taxes- We do get these request occasionally but I’m surprised I don’t see it more often. There are many counties across the country that knowingly inflate the real estate taxes and will quickly lower the appraisal value if challenged. Very few people challenge them and they make a lot of money this way.
4. Home Improvement Projects- Before you convert the attic space into a work out room or convert your formal living room into an office, use a house value report to get a firm number on the “price per square foot” for your home. If you are converting attic space, this will add square feet to your home making it worth more but make sure the project doesn’t cost more per square foot than the value it adds. If you are converting a half bath to a full bath, find out what value that adds to your home and time to keep within that range for your budget. This is smart money at work. Your home is an investment so why spend it all on upgrades that will not bring you a return for your money?
5. Building a Pool- A free house value… if prepared right will give you an idea of what added value a pool will bring your home in your neighborhood. If a pool in your neighborhood adds $25K to the selling price then you will know where to keep your pool priced. At the same time, keep in mind that a pool will depreciate by 50% almost immediately… meaning if you spend $30K for a new pool, it will only raise your home value by $15K. It’s different for each neighborhood but this is a pretty good rule of thumb.

I hope this information helps you get the most return for your home investment. If you have any other creative ideas of how to utilize a CMA, please share it with us! Request your House Value Report today!

Above article provided by Texas Home Central

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