Residential real estate certainly has its share of terrors, frights, and things that go bump in the night. And since Halloween is just around the corner, this seems like a good time to talk about it.
Since everyone knows the current market overwhelmingly favors sellers, it goes without saying that things can get scary for buyers. I wrote about it in October two years ago.
What might come as a surprise – especially in a market with most sellers sorting through stacks of over-asking offers – is that there are scary factors sellers need to watch out for as well.
To name a few …
Sight-Unseen Offers
Such offers are shockingly commonplace these days. I’ve had them on recent listings and competed against them recently with buyers. BUT if they come with an inspection contingency, watch out! With an inspection contingency, buyers can get a house under contract and then decide at their leisure whether they actually want it. If you want to accept such an offer, use a counter offer to kill the inspection contingency or make the earnest money non-refundable.
Corporate Buyers
Unlike those above, corporate buyers are generally not interested in living in the house. But like those above, they will get a house under contract and then decide what to do with it. Often they will shop the contract to another buyer for a quick profit. Nothing wrong with this if sellers get the price they want, but if the deal goes sideways, they will have to start all over. These offers often have a bunch of indecipherable language in Special Stipulations. Your realtor can help you decipher this and avoid getting burned.
Appraisal Gaps
In the past six months, I’ve written eight successful offers for buyers (not to mention a number that didn’t get the deal). All but two were over-asking price and either waived appraisal entirely or offered to cover a certain amount of any gap between appraised value and contract price. That’s what it takes these days. But sellers should beware of this kind of offer unless the buyer offers proof of funds to cover the gap. Sellers are used to asking for proof of funds with an all-cash offer but they need to ask for proof to cover an appraisal gap as well. If the funds aren’t there, and the house doesn’t appraise, you could have a train wreck on your hands.
Greed
I’ve said it before and I’ll say it again: overpriced houses do NOT sell! Don’t get greedy. Price it right and you’ll be successful.
Selling a house can be lots of fun these days, but don’t let it go to your head. As always, let your realtor be your guide.