Home Selling 101: It’s Not Over ‘Til It’s Over
In the third and last post of the Home Selling 101 series, we determine what sellers and agents do to ensure they cross the finish line and have a speedy and successful closing.
In the first and second posts of the series, we explored where home sellers need to begin when they are selling their home, starting from selecting a team of experts through staging and appraising their home. Here, we’ll see what sellers need to do to ensure a smooth closing.
Once a contract is signed, it doesn’t mean the deal is done, according to Coldwell Banker West sales associate, Scott Oyler.
“Nowadays, you have to sell a home twice,” he said. “First to the buyer and then to the appraiser.”
If the appraisal comes in at lower than the selling price, it can jeopardize the deal: Mortgage lenders won’t approve loans large enough for buyers to close. Good agents may be able to provide appraisers with supporting information, such as prices for recent comparable home sales.
According to Jonathan Miller, president of the New York City-based appraisal firm, Miller Samuel, agents can provide comparable recent sales and point out home improvements that are not always visible, such as updated wiring or plumbing, to justify the selling price.
“The agent can interact with appraisers all throughout the process up to and including the appraiser’s inspection,” he said. “After that, agents can’t talk to appraisers.”
Sales can derail over other issues as well. An inspection can reveal unexpected damage, for example, or buyers may want to negotiate closing costs, closing date, or when the seller has to leave.
That’s when agents can really earn their commissions. They can save the sale by using a carrot or a stick. The carrot could be a minor concession such as leaving behind some lighting fixtures or power tools, for example. The stick could be that earnest money is forfeited if the deal doesn’t go through. Agents try to negotiate as much earnest money as possible.
“If the buyer has a change of heart, at least the seller has something,” said Oyler.
Agents tend to be better at these negotiations, both because they have more experience conducting them (How often does the average person sell a house?) and because they are not emotionally involved. They see things more objectively.
Oyler had a recent client whose home was filled with furniture, collectibles, and other goods. She wanted more time to move all her belongings. Oyler was able to get an extra few weeks for her after the closing.
He said that whatever the ultimate terms of the agreement, agents work with sellers to understand their ultimate net number–that is, the cash from the sale the seller walks away from the closing with. It makes no sense to hold out for a higher price, for instance, and then offer to pay closing costs for the buyer means the seller comes out of the deal with less money overall.
In reality, however, selling a home is a lot less fraught than buying one. For one of Oyler’s clients, Jessica Allcock of Cincinnati, the whole process was a breeze, made easier by the professionisn of Oyler’s team.
“They were a well-oiled machine,” she said.
If she has advice for other sellers, it’s to ask a lot of questions so that you understand what’s going on from beginning to end. In the final analysis, though, it helps to find a agent you trust. Then, said Allcock, “Do what they tell you to do.”