Wednesday, April 3, 2019 / by Sara Koenig
This is an important conversation to have with your broker even before listing your home for sale. I recommend this because, based on the condition of your home, there might be items you need to repair/fix in order to accept certain loan types, for example, an FHA loan, or VA loan. If you agree as a seller to accept all the various types of loans, this means you agree to work with what requirements those loans may have when it comes to lending.
I recommend my sellers accept all offers and loan types if possible because this keeps your potential buyer pool larger than if you constrict the type of loans you are willing to take.
Some additional items to consider that can be included in an offer to purchase your home include:
- Closing Date
- Earnest Money Amount
- Inspection Contingency
- Buyer sale of Home contingency
- Escalation addendum
- Additional money down addendum
- Pre-Approval/Pre-qualification letter
Now, depending on the price that you are listing your home at, some of these items would not be included, and in our current market, most buyer's will work to minimize the contingencies in order to have their offer be more competitive.
For example, if you are listing a luxury home here in Spokane, you may not necessarily receive multiple offers which could include an escalation addendum. But, on the flip side, if you are listing a home that is below $300,000, the likely-hood of you receiving multiple offers is much higher since our inventory levels still remain very low.
One of the most important addenda to pay attention to as you review an offer is the financing addendum. This addendum will outline what kind of loan the buyer is selecting, how much money they are putting down on the purchase of the home, and whether or not they are asking you, the seller, to pay for any of their closing costs.
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You should also expect to see a pre-qualification letter from the buyer's lender included with an offer. THIS is crucial. Any buyer should already have done the leg work here and be qualified for the offer they are writing on your home. If you don't have this, be sure your listing agent asks for this so that you minimize risk on your end and don't have an offer flub out because down the road you find out the buyer doesn't qualify for their loan.
The other aspect around the lending process to be aware of is that many mortgage brokers can complete and close a loan in less than 21 days now. It's not always the typical 45 day closing anymore. So, if a fast closing is important to you, that can work in your favor. However, if you need a little time to wrap up the moving process on your end, maybe letting your broker know that in advance is a good idea.
There is a lot of behind the scenes conversations that happen with agents that most clients don't realize. A great buyer's agent will call the listing broker before they submit an offer on behalf of their client to find out what is most desirable for the seller. This way they can educate their buyer and work to write the most compelling offer.
The most important thing to remember as a seller receiving an offer is that you can always counter-offer on many of these requests, or contingencies. If there are certain aspects to an offer that are making you feel uncomfortable, talk with your listing agent and walk through your options as far as a counter offer, or even ask your broker to find out a little more from the buyer's agent before responding.
The selling process can be scary and
If you are ready to sell your home, let's get together and put a plan together!
Sara Koenig | Spokane Realtor
Haven Real Estate Group