My Realtor has my house under contract and he says it “looks good.” I have made lists and I am now starting to do the million things I have to do to get ready to move. Some of the arrangements, such as the moving van and a rental in a new state, want non-refundable deposits. When do you think it is safe to go forward with these deposits? What could go wrong?
Dear “Under Contract,”
Congratulations! You now have a timeline to work on. With knowledgeable real estate brokers on both sides and willing/cooperative buyers and sellers on both sides, you should be able to keep the process on track and make your closing date, or at least know in advance if you have to adjust it a little. I would rephrase your question of “what could go wrong” to say, “what should I watch for to make the closing go as smoothly as possible?” Skipping the very odd, single occurrence issues (physical disaster to the home prior to closing, buyer loses job, etc.) here are the five main items for you to watch for, and to consider getting past, prior to making any non-refundable deposits.
1. Title commitment issues: You can check the title commitment right away and make sure there are no liens against you or your home (or the buyer for that matter) that you were not aware of. Also, especially if you have a rural property, look to make sure there are no easement or access issues. We recommend you and your buyer both have your legal counsel look over the title work so there are no surprises later on.
2. HOA issues: Occasionally homeowner associations have back financial issues with a seller or the reserves do not please the potential buyer or the lender. Sometimes the rules in the HOA documents have issues that the buyer was not aware of, such as certain pets not being allowed, parking policies, etc. The sooner you can get the documents to the buyer to read over the better you will be.
3. Loan approval issues: Hopefully you asked for a pre-qualification letter from the buyer already, or proof of funds, if it is a cash transaction. Your broker can work with the other broker to follow the loan process as closely as possible and hopefully you will be alerted to issues if they arise.
4. Acceptable appraisal: When you were pricing your home, I am sure your broker gave you a comparative market analysis indicating what your home should be priced at using the most recent sales and what was actively on the market at the time. Your broker can attempt to make sure the appraiser has all of the information available. In an ascending market like we have right now, we always work toward showing evidence of where the market is going, besides where it has been.
5. Inspection objection and resolution: The home inspection can turn into a big obstacle if it isn’t handled carefully. We like to emphasize that it is the seller’s responsibility to fix any health and safety issues and not cosmetic issues that the buyer saw before he made the offer. There needs to be sensitivity to any valid issues from the buyer, and sometimes also for issues you do not consider valid, if you want the deal to go through. Sometimes it comes down to the old adage about marriage ... do you want to be right, or do you want to be happy! You may need to give a little to make your closing date. Your skilled broker can be invaluable with these negotiations.
I think the best policy is to do all you can to have no surprises and then keep a positive attitude, knowing that most of the properties that go under contract make it to closing. Sorry to hear you are moving out of our great valley, but best of luck to you with your new adventure!
Joan Harned is an owner-broker for Keller Williams Mountain Properties and heads up Team Black Bear, her own real estate team. Harned has been selling real estate in Eagle County for 27 years, is a past chairman of the Vail Board of Realtors, past Realtor of the Year, past director on the Great Outdoors Colorado Board and a member of the Luxury and Land Institutes. Contact Harned with your real estate questions at Joan@TeamBlackBear.com, 970-337-7777 or www.SkiAndTee Homes.com.