Selling a home can be stressful, especially if the buyer is difficult, demanding or unprepared to purchase a home. Homeowners who want to have a positive experience selling their home must be aware of the warning signs that a buyer might potentially be a problem. Once the seller is locked into a contract with a buyer, backing out of the deal can be difficult or impossible. Here's what you need to know.
Contingencies are conditions that enable the buyer to back out of the contract without losing earnest money. There are three types of contingencies that are typically included with a home buying contract. Those contingencies are:
- Home inspection. The home inspection contingency usually allows the buyer to back out of the deal if the home inspection reveals items that the seller is unwilling or unable to correct.
- Financing contingency. This allows the buyer to cancel the contract if the loan does not fund.
- Appraisal contingency. This contingency allows the buyer to cancel the contract if the home does not appraise at or above the offer price on the home.
If a buyer has added extra contingencies on top of these main contingencies, the seller may need to reconsider before signing the purchase offer on the home. The more contingencies, the more opportunities the buyer will have to cancel the contract without paying a penalty.
Pre-Qualified, But Not Pre-Approved
Pre-qualification for a mortgage is the first step in the loan approval process. To be pre-qualified, a buyer must answer the lender's questions. The lender uses the information supplied by the buyer to determine how much the buyer would be approved to borrow, if the information supplied is accurate.
Mortgage pre-approval is the second step in the loan approval process. This requires the buyer to supply the lender with paperwork to support the answers to the questions asked during the pre-qualification process. Pre-approval is a much more accurate way of judging whether or not a buyer will be able to qualify for a loan when the time comes.
Sellers who accept offers from Canyon Gate homeowners who are only pre-qualified for a mortgage may find they cannot continue with the home buying process once their paperwork is examined. An offer from a buyer who is pre-approved for a mortgage is, more than likely, better than an offer from a buyer who is only pre-qualified.
Low Earnest Money Check
Earnest money is the deposit that the buyer makes to show that they are making a serious offer on the home. The earnest money check is eventually rolled over into the down payment at the close of escrow. Serious buyers often make larger earnest money offers. A low earnest money check could be an indication that the buyer is not yet ready to make a commitment on a home.
Contact Your Real Estate Professional
For more information about how you can sell your home for a good price, contact a real estate professional. Your real estate agent can help you identify the red flags that could be a potential problem when selling your home. Your agent can also give you advice that can help you sell your home quickly, and can help you attract a buyer that will make a fair offer for your home.
Debbie Drummond is a Full Time Realtor with over ten years experience in the Las Vegas Real Estate Market. She and her team of Real Estate Pros offer the highest level of service. If you’re buying or selling a Las Vegas home, call (702)354-6900 or email Debbie@LVHomePro.com. They’ll be happy to assist you in your move.