Archive for September, 2010

Oakland County Michigan Seller- You Accepted the Offer. Now What?

When we go over an offer to purchase from a buyer, I will go over price and terms as well as any contingencies. Typical contingencies are mortgage contingency, inspection contingency, subject to clean title, must appraise for at least sale price. And there are time frames for each contingency.

A normal offer will give 30 or 45 days to get a mortgage and the buyer must apply within 5 days. Usually 7 days for a home inspection and clean title prior to close. So let’s use these time frames to explain what happens next.

The buyer will call his/her loan officer and apply for the mortgage (formal mortgage application) but instruct his/her loan officer to not order the appraisal until after the home inspection. In the meantime I send a copy of the purchase agreement and pre-approval letter to our title company to get rolling on the title work.

Within the first week the buyer will need access to your house for approximately 3-4 hours. They may need to make 2 trips, depending on how many inspections they will have (radon requires the inspector to come back. Septic or mold inspection may require a second inspector). If everything is fine with the inspection, we should hear from an appraiser within a week or so. If there are problems with the inspection, the buyer will probably either back out of the offer or ask you to either make repairs or lower the price.

Assuming we get past the inspection ok, the appraiser will come out to the house. He/she will only be there around 15 minutes to maybe a half hour. Within a week or so the lender will get the appraisal back. An FHA appraisal may require some repairs. It will be addressed in the purchase agreement who is responsible for the repairs. An appraisal for a conventional mortgage is pretty much just justifying the sale price. For this example we are going to assume the appraisal comes back ok. A later post will address low appraisals.

So now your house has cleared the inspection and appraisal contingencies. We are probably at least 2 weeks into the transaction at this point. Your title work should be back and clean since I order pre-title at the time of listing and any problems can be taken care of at that time.

Now we just wait until the lender finishes approving the buyer and we set a closing. The buyer will probably walk through the house prior to closing to make sure it’s in the same condition as when they wrote the offer. If possession is at close, they will also want to make sure you have moved out.

You will need to call the utility companies and let them know when you will be moving out and the name of the future new owners. It would be a courtesy to leave any manuals for appliances, or furnace, etc. for the new owner.

Then we all proceed to the closing and it’s a happy happy day for all!

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I’m not really calling you a dummy. This is my attempt at a very simplified explanation of what seller concessions are.

Example: You want to buy the house you just looked at and want to make an offer of $200,000. You need $5000 in seller concessions (seller paying all or part of your closing costs). Your offer will be $205,000 asking the seller to pay $5000 in concessions. If you offer $200K and ask for $5K in concessions, your offer is really $195,000.

The seller isn’t really paying your closing costs- you are mortgaging them.

Sellers- you really aren’t paying those closing costs. The buyer is mortgaging them.

Buyers- sellers have a bottom line. They don’t tend to come down to that bottom line AND pay concessions. The concessions are rolled into the purchase price.

Sellers– don’t question the amount of the concessions. If the buyer’s loan officer is over charging them that is their business. You only need to be concerned about your bottom line.

Jackie Hawley
cell: (248)736-6407
email: Jackie@JackieHawley.com
web: www.MiRelocation.com

For Sellers

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And Pretty Pretty Please don’t suggest alternate times that would work better for you. Hopefully, when you turn away a showing, it’s a fluke. I like to fantasize that ANY other time is good for you- that this specific time just happened to be bad.

Let me start out by telling you about the reason for this post. Yesterday I was setting appointments for tomorrow and for a different buyer/client on Sunday.  Tomorrow’s client is in Michigan for one day– Saturday. This is a cottage, a second home- an extremely strong buyer. Doesn’t have to sell to buy. Can wait forever for a short sale to get approved. Since it’s a second home he will have a good down payment- not a shaky buyer by any means. One of the sellers found a Saturday late afternoon appointment to be inconvenient. It’s a holiday weekend. Yes it is. It’s a holiday weekend for both the buyer and myself, too. Do you think he is a serious buyer?

If you’re having a party- so what? We may grab some BBQ and a beer while we’re there. If my buyers like your house, you may want to offer them a spin around the lake. If you’re gone because it’s a holiday- so much the better. That’s what the lockbox is for.

Sunday’s appointment- I’m showing somebody 2 houses. He was just approved to purchase without selling, so he too has time to wait for short sale approval. One of the two sellers has to work and has dogs, so would Monday between 9 and 1 work or sometime Tuesday or Wednesday? It was bad enough that I couldn’t get in when is convenient for both the buyer and me, I was expected to call the listing office back with which of those days would work. I may be a little unreasonable, but that’s the part that pissed me off. I know the seller didn’t mean it the way I took it, but I was still torqued.

seller and her dog

I do understand that you have dogs and don’t want to cage them. I have a dog and would never cage him; I didn’t crate train my dog and to start caging an adult dog is on the mean side. If you can’t make arrangements for someone to either be there for showings when you can’t or someone to take your dog, please don’t throw out alternate times. For some reason that is more irksome than being told I can’t show the house.

If you want to sell in any market you need to let the buyers in to see it. It may not always be under optimum conditions, but you will never sell if it’s never shown. You won’t be inconvenienced for long. If you’re getting showings you should sell. If you’re grossly overpriced, you probably aren’t getting showing requests to turn away.

Jackie Hawley
cell: (248)736-6407
email: Jackie@JackieHawley.com
web: www.MiRelocation.com

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