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Selling Your Home - What Can Go Wrong?

So, you're selling your home. What can go wrong in the selling process? The sad fact is that a lot of things can, and often do, go wrong.  However, don't despair, there are almost as many solutions as problems. 

Some problems can't be fixed.  It's important to figure out whether yours, should you encounter them, are fixable or not.  Then you can either fix them, or move on and find another buyer.  If it's priced appropriately (good idea for a future article), there's a buyer out there for virtually every property.

Contract Negotiation

A problem which shows up all too frequently during contract negotiations is that the seller has left no room to negotiate the price.  If the seller shows no flexibility, he/she/they are apt to chase buyers away.  Mad.

The solution is simple and obvious, price your property a little higher than you feel you have to get.  It needs to be a reasonable market price for your home, but you can start at the top of the market.  Then, if your buyer wants to negotiate price, you have built in wiggle room.

Price isn't the only thing that matters to buyers.  Settlement and move in times are important, too.  This is especially true if the move involves a new employment situation, a new school district, etc.  If you can be flexible on those points, that can tip the choice to your property over a competing home.

Another sticky wicket during contract negotiations is encountered when buyers ask sellers to pay all, or some, of the buyers' closing costs.  Often, sellers' knee jerk reaction is, "Why should I pay his closing costs?  Mine have never been paid by the seller."

Whoa!  Don't worry about what the buyer is getting out of it.  Look at what you're getting.  Is your bottom line what you want it to be?  Close to it?  Maybe you should consider paying all, or most, of what the buyer requested. 

No matter what the proposal is during contract negotiations, don't freeze into a negative position.  Think big picture.  Think bottom line.  Your bottom line.

The Buyer Can't Perform

Everything was going along swimingly, and then you get a call.  The buyer can't qualify for a loan to buy your home.

Check to be sure the buyer has approached a lender who will make loans to people with less than perfect credit.  If that doesn't work, write it off as a mistake.  The next time someone wants to write a contract offer, make sure they have a lender's letter saying they're qualified to buy your house.

Title Problems

You get a call from the person searching the title to your property saying your first cousin once removed is shown as having a ten percent interest in the property.  I hope you (and not just your lender) have title insurance.

If you don't, perhaps your cousin will sign a "quit claim deed" (or whatever similar term your jurisdiction uses) if her father was paid for his interest long ago, but nothing was recorded to that effect with the land records.

If that doesn't work, perhaps your cousin will agree to join in the sale and receive ten percent of the proceeds. 

Failing that, you're probably looking at a court proceeding.  The sale will fall apart, and you'll have to start all over again once the problem of legal ownership has been resolved.  Bummer.

Lender Objections

Example One

The lender calls and says your garden shed is encroaching on your neighbor's property, and her fence is encroaching on yours.  The lender won't fund the buyer's loan until everything is moved to where it belongs.

If you get along with your neighbor and can do the work yourself (or can afford to have it done), the problem can be quickly cured.

I once saw a very creative resolution to this problem.  The shed was on a utility right-of-way.  The seller got the county to write a letter to the lender saying that if a shed weren't on a poured foundation (it wasn't) and could be moved on notice, then it wasn't considered an encroachment until/unless such a notice was sent.

Example Two

The lender says your property will appraise for the amount needed for the loan so long as the following repairs are made.  The list which follows upsets you.  Time to take a deep breath and think.  How can you get them taken care of before settlement?  Can you do them?  Have them done?  Would the buyer be willing to help out? 

Example Three

The lender's appraiser comes in with an appraisal which is below your agreed sales price.  The lender is willing to lend based on the appraisal, not the previously agreed price.

There are several possible solutions.  You can reduce your price to the appraisal price.  If the buyer wants your property enough and has enough money, he can pay a larger down payment and leave the purchase price the same.  The two of you can split the difference; you come down some, and he increases his down payment some.  Or, sadly, the deal can fall apart over this issue.

The real key to successfully dealing with problems is to stay calm, open minded, flexible, bottom line oriented, and think win/win.  Most of the problems which occur do have solutions.  We just need to look for them persistently.

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