5 Red Flags Sellers Need To Be Aware Of
5 Flags To Be Aware Of When Selling Your Home
Most sellers don't want to believe they could be taken advantage of, but it happens every day. And the unfortunate result is that sellers lose money and sometimes, their homes. Fortunately, we've compiled a list of red flags to provide some comfort during the selling process.
1. Buyers That Are Just Getting Started
According to the National Association of Home Builders, approximately two-thirds of homebuyers search for more than three months, spending an average of 124 hours, touring many open houses before they find their new home.
This can be a red flag for sellers because it means that a majority of buyers are not finding what they are looking for in the first few open houses. This can be a sign that the market is saturated with homes or that the home is not priced correctly.
2. Buyers That Have Unreliable Financing
This is perhaps the most important factor to look out for. Thankfully, there are plenty of documents that sellers can look out for from the buyers.
Some of these documents include:
- Proof of Funds: This document shows that the buyer has the funds available to purchase the home.
- Pre-Approval Letter: A pre-approval letter from a lender is an important document that proves that the buyer has been approved for a mortgage loan in the amount of the purchase price. This is the first step to the home buying process, so buyers should have this document ready to show sellers.
- Bank Statement: A bank statement indicates that a buyer has enough income to cover his or her housing payment each month and it shows how much money they currently have available in their account.
- Proof of Employment: This document shows that the buyer is currently employed and has been for at least the past two years.
3. The Buyers Make Too Many Requests
Some buyers may make requests of the current homeowner before they agree to close the sale. Some buyers may be a little too picky and make unreasonable requests. This can include any of the following:
- In some cases, buyers might ask for small repairs or touch-ups to be made before they move in.
- In other cases, buyers might make more extreme requests, such as asking the seller to pay for their closing costs or to lower the price of the home.
- Some buyers demand more costly renovations to be done to the home, even if they are completely unnecessary or overpriced.
4. The Buyers Make Frivolous Offers
As a seller, appraisals can come in handy when listing the house. An appraisal will ensure that the home is being listed at a fair value and buyers will need to offer within a reasonable range of that price.
If a buyer is making a ridiculous offer compared to the appraisal value, it's best to work with a professional real estate agent to be sure that you're getting a fair value for your home. A professional will be able to ward off frivolous offers and keep them from wasting your time.
5. Mistakes on the Home Purchase Agreement
Also referred to as a sale contract, purchase contract, or agreement of sale, home purchase agreements are legal documents that state the agreed-upon terms and conditions of the sale between the buyer and seller.
The purchase agreement should be reviewed by a real estate attorney to ensure that all contingencies are met and that there are no inconsistencies. If there are any mistakes in the agreement, it can lead to misunderstandings and disagreements down the road.
Mistakes on a home purchase agreement could include:
- Incomplete or inaccurate information about the property
- Missing signatures or initials from the buyer, seller, or agent
- Illegal terms and conditions agreed upon by the buyer and seller
These mistakes can lead to further issues later on. For example, an incomplete or inaccurate description of the property could result in any interested buyers having to submit another offer or disagreements between the real estate attorney and the parties involved regarding potential issues with the home.
There are so many things that a seller needs to be aware of when listing their home. Although we've covered five of them today, there are still more red flags to watch out for. Working with a professional real estate agent will decrease the chances of missing any of these red flags during the home-selling process.