Your house is under agreement, the buyer seems great. You’re all set, right? Now you just have to pack your stuff and wait for the closing date. Unfortunately, there are still some things that can go sideways, costing you money and maybe even derailing the transaction.
With most home sales, there are four opportunities for things to go wrong:
- Home Inspection Problems – home inspector finds something that will be expensive to fix or something that makes buyer uncomfortable. See more detail about what can go wrong and what you can do here.
- Purchase and Sale Negotiation – attorneys aren’t getting along or buyer is asking for something that you don’t feel good about. More on these issues here.
- Bank Appraisal – the bank appraiser doesn’t feel the house is worth as much as the accepted offer. In this case, you can request another appraisal or negotiate the difference.
- Buyer Financing – lender doesn’t approve buyer’s loan. There’s often not much you can do about this if you don’t find out until the last minute. It’s best to avoid this by having your agent talk to the lender before even accepting the offer.
For any type of problem, consider the following:
- Do you have other offers or reason to think someone else would buy the house for the same price?
- Can the buyers get their money back with no penalty if they cancel the sale for this reason?
- Who is most motivated to complete the sale, buyer or seller?
- Would the average person think the request is reasonable?
- Buyer’s financial situation
- Your agent’s opinion
- What makes sense to you?
- What is the best scenario for you?
When things get rocky, it’s important to keep your eyes on the goal. There’s a reason that you put your house up for sale, does that reason still exist? If it does, would you be better off holding your ground at the risk of losing the buyer or are you better off losing a little bit of money but still selling the house? That said, there are definitely times to hold your ground and even times when allowing the buyer to walk away is the best option. An experienced agent will take preventative action that helps keep things running smoothly. If things do start to go pear-shaped, consider these non-financial concessions you could offer:
- Possession – allow a lease-back or early move-in. With this option, be sure there’s a clear, written agreement signed by all parties that spells out what happens if the sale can’t be completed for some reason or if people don’t move out as planned.
- Home warranty – sometimes with an older home or when a home inspector points out potential problems, offering a home warranty can give a buyer that peace of mind and keep things on track.
- Is the seller in a position to participate in the financing? Sometimes, when the buyer can’t get financing, the seller can bridge the gap with a small loan. This should be treated as a second mortgage, discussed with an attorney and filed at the Registry of Deeds.
In any negotiation, the more each party can empathize with the others, the smoother things will go for all. If you’re able to do something nice for the other side early on in the negotiation, that often comes back when you need it most. I hope that everything goes smoothly for all of your real estate transactions but if you have questions, I’m here to help!