Will Your Contract Stick at Closing?

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We all know the hassles and inconveniences involved with selling a home. You make sure the house is always spotless, you have to find somewhere to go when prospective buyers come to tour it, and you may even bake fresh cookies to give it that “Welcome Home” feel and smell. (I’ll admit, I’ve done it.) With all the stress that can be involved in selling, when you finally receive a contract, you want to make sure it sticks. 

I saw an article a while back talking about the number of REALTORS experiencing trouble with contracts closing. Whether it was because a buyer couldn’t get financing, a low appraisal or a flaw in the inspection, they estimated at the time that only 47 percent of contracts were closing on time. So how do you make sure your contract sticks when you get an offer you’re pleased with?

Have your home in good repair.

A frequent cause for concern for a buyer is when a home needs significant updating or repair before they can settle in. The buyers looking at your home are just as ready to move as you are, and any cause for concern on an unfamiliar home can be a red flag. If your home needs a new roof, foundation improvements, electrical updating, etc., taking care of those before you list it may actually make you more money and produce a cleaner contract in the long run. 

Fully disclose known problems.

If there is an issue with the home that you aren’t able to take care of prior to listing and selling, it’s better to be upfront and disclose rather than allowing it to become an emotional issue — for you or for them — before closing. 

Have your agent tighten up on contingencies.

It’s not at all unusual for a buyer to add a contingency to the contract. For example, some buyers want to sell their home before closing in a new home to avoid the risk of paying two mortgages. If you agree to those terms, it might be wise to include in the contract that you have the right to continue to market and receive offers on the home so you can move on quickly if they don’t come through. You can even go as far as ensuring you have the right to accept another offer if you receive an equal or higher offer before their home sells. Be sure you work with your agent to keep your options open. 

Negotiate on the important terms.

If it’s important to you that you close on time or that your buyer’s financing is in order, make that abundantly clear in the contract. 

Have an auction.

You knew this was coming, right? In all seriousness, though, it can be a viable option for the right properties. An auction sells a home “as is, where is”, so there are no contingencies. The marketing period prior to the auction date allows potential buyers to do their homework beforehand, then they’re ready to bid and enter into a contract on auction day. 

Have you had experiences like these buying and selling a home? Maybe you’ve learned the hard way. What wisdom can you share to make sure your contract closes on time?

[Photo Credit]

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~ by Craig King on February 14, 2013.

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