Tip #2: What Happens During a Purchase & Sale?
Hello Again! This is Eren Millam Realtor coming to you from
Extraordinary Photography Studios. Last week we discussed the importance of
understanding your current market. If you missed it, you can click the link in the video at 23 seconds. This week I want to talk to you about What Happens
During a Purchase and Sale after you’ve received an offer.
Most well priced homes sell within 95% - 97% of current
asking price. An Extraordinary agent averages between 99% - 102% of asking
price! But, I digress.
So you’ve received an offer and now you have three options.
You can accept, reject, or counter. Your agent can go over the pros and cons of
each offer, but it’s up to you what direction you want to go. For the purposes
of this video, let’s say you received a full price offer and accepted.
The first period of an offer is the inspection phase. This
phase is typically 10 days but can be shortened or lengthened during
negotiations. A buyer will pay for a licensed home inspector to review the
current state of the house and make note of any issues whether serious or not.
Once completed, the buyer has an opportunity to request seller to pay for
certain repairs. It is then up to you, with the guidance of your agent, to decide
whether or not you will do any repairs or certain repairs. The majority of
deals die in this phase for obvious reasons!
Once you and buyer have agreed to move forward with the
purchase and sale, the next phase is the appraisal. This phase can last anywhere
from a few days to 4-5 weeks depending on your area and the time of year
because of the availability of appraisers. The appraisal is ordered by the
buyer’s lender (and paid for by buyer) to assess the condition of the home and
to make sure the agreed upon offer is in line with the market. The ideal
scenario is for an appraisal to come in at-value. If it comes in over agreed
price, your agent left money on the table. If the appraisal comes in lower than
agreed price, you have three options.
The first option is to come down to
appraised value. The second is to stand firm and ask buyer to come up with the
difference out of pocket. The third option is almost worthless, and that is to
agree with buyer to terminate contract. I say it’s worthless because some appraisals
stay with the property for up to 6 months! So even if another buyer wanted to
pay full price, they’d run into the same issue with a low appraisal. Most
buyers don’t have the ability to make up the difference in my experience, but
every situation is unique and use your agent’s expertise and guidance to make
the best informed decision.
After that, it’s really just a waiting game for lender and
title company to draw up paperwork and review the title. Your main costs will
come from any repairs that you’ve agreed to and if you have a septic, you will
need to get that pumped which is around $400 - $600 in the Chehalis / Centralia
area. Those are typically out of pocket expenses, and the rest such as closing,
title, escrow, realtor, etc. will come out of your proceeds at closing, as well
as any liens or loans currently on the property. (As an aside, a short sale is
when you owe more on your house than it is currently worth. If you don’t have
any money to bring to closing, the amount you owe is written off as a default.
That is a subject for another time).
Alright, so we talked about the purchase and sale process.
It doesn’t require a ton of work on your part, but there is a lot of waiting
and some upfront costs involved. The key here is selecting a Realtor who knows
and understands the forms required and how to use them to your benefit.
Wouldn’t that be a great question to ask when selecting an agent to list your
home? Next week we’ll discuss the importance of pricing your home to ensure you
get top dollar! Thanks so much for watching, now go out and make it an
Extraordinary day!
