Q: Do sellers have to disclose the terms of other offers?
A: Sellers are not legally obligated to disclose the terms of other offers to prospective buyers.
Q: What are standard contingencies?
A: Most purchase offers include two standard contingencies: a financing contingency—which makes the sale dependent on the buyers’ ability to obtain a loan commitment from a lender, and an inspection contingency—which allows buyers to have professionals inspect the property to their satisfaction.
Q: Whose obligation is it to disclose pertinent information about a property?
A: In most states it’s the seller, but obligations to disclose information about a property vary. Under the strictest laws, you and your agent are required to disclose all facts affecting the value of the property. This might include: homeowner’s association dues, work done on the house (to ensure that it’s met local building codes), or any restrictions on the use of the property that are displayed in association rules. It is important to check your state’s disclosure rules prior to a home sale.
“Under Minnesota law, sellers of residential property, with limited exceptions, are obligated to disclose to prospective buyers all material facts of which Seller is aware that could adversely and significantly affect an ordinary buyer’s use or enjoyment of the property or any intended use of the property of which Seller is aware” –MN Statue 513.58
Q: How does someone sell a slow moving home?
A: Even in a down market, real estate experts say that price and condition are the two most important factors in selling a home. If you are selling in a slow market, your first step would be to lower your price. Also, go through the house and see if there are cosmetic defects that you missed and can be repaired. Secondly, you need to make sure that the home is getting the exposure it deserves through effective advertising on the local Multiple Listing Service (MLS) and other websites. Include professional photos and make sure your home is properly mapped. Another option is to pull your house off the market and wait for the market to improve. Finally, if you have no equity on the house and are forced to sell because of a divorce or financial considerations, you could discuss a short sale or a deed-in-lieu-of-foreclosure with your lender. In a deed-in-lieu-of-foreclosure situation, the lender agrees to take the house back without instituting foreclosure proceedings. The latter are radical options. Your simplest and most effective option is to lower the price.
Q: Do I have to consider contingencies?
A: If you are a seller in a seller’s market, in which there is more demand than supply, you probably won’t have to entertain too many contingencies. But if you are selling in a buyer’s market, when buyers are few, prepare to be very flexible. Granting contingencies also depends upon what kind of price you want to get and on the condition of your property. Remember, contingencies are written into the contract and are negotiable during the negotiation phase only.
Q: When is the best time to sell my house?
A: To be honest, there is no “perfect” time to sell. Selling a house depends on supply, demand, and other economic factors. But the time of year you choose to sell can make a difference both in the amount of time it takes to sell your home and in the ultimate selling price. The real estate market picks up as early as February, with the strongest selling season usually lasting through May and June. With the onset of summer, the market slows. July is often the slowest month for real estate sales due to a strong spring market putting possible upward pressure on interest rates. Following the summer slowdown, real estate sale activity tends to pick up in the fall but then slowing down near the holidays in the winter months. If this makes you wonder if you should take your home off the market for the holidays, consider the advice of veteran agents: You are always more likely to sell your house if it is available to show to prospective buyers continuously.
Q: How do I know what my house is worth?
A: I can do a comparative market analysis (CMA), which is an informal estimate of market value based on similar sales in your neighborhood and surrounding area. Or you can have an appraiser (usually $300-$400) give you a professional estimate of a property’s market value based on recent sales of comparable properties, location, square footage and construction quality.
Q: Why is proper presale preparation of my house so important?
A: Getting your house ready to put on the market takes time. Exposing your property to the market before it looks its best gives buyers and agents who tour the house a bad initial impression. It’s difficult to get them back for a second look after you correct the showing flaws.
Q: What is curb appeal?
A: Most buyers begin forming their opinion of your house before they even go inside. Thus, the external attractiveness of your property when viewed from the street is critically important. I can help you with suggestions on how to improve your curb appeal.
Q: What can I do to the interior of my home to help it sell?
A: Curb appeal draws buyers into your house, but appealing interiors make the sale. You don’t have to spend a lot on your house prior to putting up the for sale sign. On the contrary, the little things you do generally give the biggest increase in value. I recommend concentrating on the three C’s—clean up, clear out, and cosmetic improvements.
Q: What is a listing contract?
A: A listing contract is a personal service contract between you and a licensed real estate professional. The listing contract contains two basic promises: the broker promises to do his or her best to find a buyer for you property and you promise to pay the broker a commission.
Q: What type of information should I disclose about my home?
A: Generally speaking, the law requires that you disclose to prospective buyers any information you have that materially affects your property’s value or desirability. This disclosure must cover facts that you, as an owner, are expected to know about your property and the neighborhood that wouldn’t be apparent to the buyer.
Q: I’m not sure whether I should disclose something about my house or not…
A: If in doubt, disclose. Over disclosure is better than running the risk of being sued for damages or having the sale rescinded because you failed to reveal a fact that materially affects your property’s desirability or value.
Q: What is a contingency?
A: Any offer you receive will probably contain some buyer escape clauses known as contingencies. A contingency gives buyers the right to pull out of the deal if some specific future event, such as getting a mortgage, fails to materialize.
Q: What is the final closing statement?
A: The final closing statement records all the money related to your home purchase.
Q: What repairs should the seller make?
A: If you want to get top dollar for your property, you probably need to make all minor repairs and selected major repairs before going on the market. Nearly all purchase contracts include an inspection clause, a buyer contingency that allows a buyer to back out if numerous defects are found or negotiate their repair. The trick is not to overspend on presale repairs, especially if there are few houses on the market but many buyers willing to buy at almost any price. On the other hand, making such repairs may be the only way to sell your house in a down market.
Q: What are escalation clauses?
A: An escalation clause is written into the agreement (also known as the offer) stating that the buyer would be willing to pay an amount over the best offer (with a max) when there are competing offers.