This is Part III of a three part series. This section covers what to do if your home doesn’t sell, what to expect after you’ve accepted a buyer’s offer, and timing the sale of your current home with the purchase of your next home.
What If My House Doesn’t Sell?
Not every home sells, but I believe that there is a buyer for every home. If your home doesn’t sell then it’s time to pinpoint the cause so that issues can be addressed. Here are some questions to ask that will help you to determine the most common reasons that a home isn’t selling.
Can potential buyers find your home where they’re looking?
Home buyers are looking for homes online through Zillow, Realtor.com, Trulia, Homes.com, Redfin, and other online portals (the majority, by far, use Zillow). If your home is listed on these portals then it will be hard for buyers to miss. By the time a buyer is ready to buy a home they’re typically getting automatic updates from 2-3 websites with every listing that may meet their criteria. It’s nearly impossible to keep a listing a secret with the current technology.
Is your home listed on the MLS?
The MLS (Multiple Listing Service) is the database that agents use to share home listings with each other. The most serious buyers, those who are ready to buy now, are working with a real estate agent. These are the most likely buyers to make an offer since they are ready and willing at the moment that your home goes on the market. If your home is listed on the MLS then it will be seen by every agent with buyers looking for a home like yours in your neighborhood.
Is the online information accurate?
Verify that the information on the online home search portals (Zillow, etc.) and the MLS is accurate. If your home is a 4 bedroom home and it’s accidentally listed as a 2 bedroom then the right buyers and agents will miss it. If your home has a garage and it’s listed as not having a garage, buyers who are specifically looking for a garage will miss it. A home that’s supposed to be listed for $450,000 but has accidentally been input with an extra zero becomes a home mistakenly listed for $4,500,000. Correcting any mistakes in the listing will ensure that the right buyers find your home.
How do the photos look?
The first impression of your home for every potential buyer and agent will be the home’s listing photos. Low-quality smart phone images won’t do a lot to sell your home. Professional photos will help make sure that the images show your home in it’s best possible light. Of course, the photos should show a home that’s clean and organized. If the photos are less than perfect then new photos may help get the attention of buyers. If the photos are professionally shot with quality equipment, interesting angles, and great lighting, then the photos probably aren’t the issue. If the photos are of mediocre or poor quality then having a professional photographer re-shoot photos can make a big difference.
Can buyers easily access your home?
If your home is listed online then it’s easy for interested buyers to hit the ‘Schedule a Showing’ button. If it’s on the MLS then buyers can easily contact their agent to schedule a showing. As long as you’re able to accommodate showings most evenings and weekends then access probably isn’t an issue. If your schedule allows showings most evenings and weekends then it’s like having a daily open house.
Is the asking price in the right range?
If buyers and agents can easily find your home where they search, the listing information is accurate, the photos look great, and the home is still sitting on the market then the asking price is more than likely the issue. Sellers tend to want to ask too high a price for their home to ‘leave room for negotiation’ or ‘just in case someone comes along who has to have the house.’ In most cases, this ends up resulting in few showings and no offers.
If the asking price is far too high then buyers won’t take the time to schedule a showing. If buyers are scheduling showings but you’re not getting offers then it’s a good indication that the asking price is close, but still too high. Buyers decide if your home is worth a visit or not and an asking price that’s far too high is one of the most common obstacles to scheduling a showing and making an offer.
What Happens After a Buyer’s Offer is Accepted?
After you’ve come to agreement with a buyer and have a signed purchase contract the buyer will typically order their inspections and begin the mortgage application process.
Most home buyers will perform a general home inspection, a radon gas test, and a termite/wood-destroying insects inspection. The buyer may also arrange for further evaluation of specific issues by specialists. For example, they may have an electrician assess potential issues that are beyond the expertise of the home inspector. After the inspections the buyers typically have the option of accepting the property as-is, requesting repairs before settlement and/or asking for money toward repairs, or terminating the contract and getting their deposit money back.
The buyers lender will require an independent appraisal of the value of the property. The appraisal will typically take place within the first few weeks of going under contract with the buyer. The appraiser will visit your home and write up a report that compares your home to other recently sold similar homes and provides an opinion of the value of the property. The lender will require that the home appraise for the agreed upon sale price, or more, in order to fund the loan.
The buyer will also order a lender required title report and title insurance during the first few weeks of going under contract to purchase your home. The title report verifies that you are the legal owner and that you have the legal authority to sell the home.
Prior to settlement, you’ll need to order any required municipal inspections and complete any repairs that the municipality requires to have completed before the sale. These requirements vary by municipality. In some areas there are no municipal inspections. Some municipalities require in-person verification of working smoke detectors, inspection of size and visibility of house numbers, sewer line inspections, curb height inspections, sidewalk inspections, and more. You’ll want to know what’s required in your municipality before listing your home so that you can be best prepared.
Within a few weeks of the sale date, your agent or the settlement company will coordinate the necessary items that you’ll need. These will include getting the final mortgage payoff amount and various tax and municipal certifications.
When all of the above, as well as any additional items including agreed upon repairs, have been completed then the settlement will take place. At settlement, the buyers will sign their mortgage and deed documents and you’ll sign documents to transfer the property out of your name. Once the settlement is complete the home belongs to the buyers and you’ll receive your proceeds from the sale.
Should I List My Home First or Find My New Home First?
If you’ll be buying a new home right away, it’s likely that you’ll need the proceeds from the sale of your current home to purchase your next home. It’s also likely that your lender will require that your current home is sold before purchasing your next home so that your income-to-debt ratio meets their requirements to fund the loan. Your Realtor and your lender can help you decide if it’s best to find your new home first or if it’s best to list your current home first, though this decision is rarely clear cut and easy.
If you find the perfect home before listing your home for sale then the offer will likely need to be contingent upon the sale of your home for a specific minimum price. This contingency puts your offer at an immediate disadvantage compared to other offers that don’t have a home sale contingency. On the other hand, if you put your home on the market and sell it before finding your next home you may not have a home to move into. An experienced real estate agent will be able to help you to make the best decision for your particular situation.
This is part III of a three part series.