Selling a Home: How to Choose Between 5 Different Offers
Selling a home? Which offer will you accept?
When you put your home up for sale you’ll attract all types of offers. The most notable difference between these offers is normally financing, and how buyers intend to pay for their purchase. So what types of bids might you get? Which are the best choices for your situation?
1. FHA Home Loans
FHA loans have become incredibly popular over the past few years. These are government backed loans, similar to VA and USDA loans. These loans are known for low down payments, and lower credit requirements. However, these loans are also prized by those simply desiring lower interest rate loans as well. The biggest challenge with FHA mortgage loans is the inspection and property approval requirements. Property condition requirements can be far more stringent on these loans. If your property isn’t in great shape this can be a real problem. Condominium projects also must be approved in order to be eligible. Many aren’t. In fact some counties don’t have any FHA approved condos.
When FHA offers are good: You are in an area with a high presence of lower credit scores.
When FHA offers are bad: Your property has major repair needs, or the project is not approved by FHA already.
2. Conventional Loans
Offers contingent on conventional loans, and with conventional loan pre-approvals may suggest stronger buyer-borrowers, but that isn’t always the case. Credit and down payment requirements on these loans have been dropping. In fact, they can now allow a lower down payment than FHA home loans. However, these loan programs are not as restrictive on property condition, and do not require projects and buildings to be ‘approved’. However, there will still be minimum requirements. The property will still need to be livable and free of structural issues. Condominiums will still need to complete a questionnaire to verify their financial stability.
When conventional offers are good: It is a good property, in a stable neighborhood.
When conventional offers are bad: There may be roof or foundation issues, major repairs, or the community has potential legal or financial issues.
3. Cash Home Buyers
Cash buyers can be very attractive to home sellers. A cash buyer typically needs less time to close. There is no uncertainty or wait and see gamble as to whether the mortgage lender will come through or not. They may or may not purchase the property as-is, in any condition. Of course in return for these perks cash buyers will typically expect a discount.
When cash offers are good: When you absolutely need to sell quickly.
When cash offers are bad: An offer like this may be less attractive if time is not an issue, and your priority is simply the highest price.
4. Owner Financing
With mortgage lenders still being tough to work with more buyers are looking for owner financing deals. This is even true of well qualified buyers with good incomes and credit who just don’t want to pay extreme lender fees or deal with headaches at the bank. In this example we are specifically talking about seller held mortgages. These arrangements can be highly attractive for sellers. They can create ongoing streams of income, and great returns on capital. Again there is no guess work with conventional lenders. Any property repair issues can normally be negotiated, but don’t need to hold up a sale. This is a fast transaction. The downside is that you don’t get all your cash out immediately. It can also be tricky if you still owe money on the property yourself.
When owner financing offers are good: You need an expedited sale and top dollar, and planned to reinvest your capital anyway.
When owner financing offers are bad: You need all your money right now.
5. Rent to Own
There are multiple ways to structure a rent to own deal. This is a type of owner financing, yet mainly differs in that the transaction starts as a lease, with the option to buy later on.
When rent to own offers are good: You want top dollar, an income stream, and don’t need a lump sum of cash now.
When rent to own offers are bad: You are unsure you can fulfill your agreement to sell later on.
Summary
The above are all common types of offers home sellers may receive in the current market. What’s right for you is really down to your individual circumstances, financial needs, and priorities. In addition to the above sellers should also weigh each offer on the whole picture, including; contingencies, terms, closing dates, price, and net proceeds.
See original at https://www.cthomesllc.com/2016/03/selling-a-home-how-to-choose-between-5-different-offers/
4 Things To Consider When You Are Selling A Property
There are a handful of subtle things you should be doing if you are selling your property. Some of these are common sense but all of them can have a tremendous impact on your bottom line. Even in a seller’s market, it is not enough to list your home and wait for the offers to roll in. If you overplay your hand, buyers will simply move on to the next property. Doing excellent rehab work or making appropriate upgrades is not enough. You need to always present your property in the best possible light. Here are five things you need to consider if you are selling your property:
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Use An Agent You Are Comfortable With. There are a lot of great real estate agents out there. To complete a successful sale, you need to choose the right agent for you and your specific propert
y. A good buying agent may not be the best at listing properties. An agent in one market may not be as knowledgeable about the market your property is in. You need to treat your listing agent search like you would anyone else on your real estate team. Don’t be afraid to ask them how well they know the area and how they intend to market the property. Commission is always important but may not be the most important factor. The goal is to get the property sold at the highest price. If you have to pay an extra half a point commission to get that done, it will be worth it in the long run. You should be able to feel if you and your agent are a good fit after talking with him or her a few times. You and your agent will communicate dozens of times throughout the entirety of your transaction so it is therefore important that you are comfortable with whomever you end up working with.
- List At The Right Price. One of the most important things you can do to procure a quick sale is list at the right price. Not only will this help you sell quickly but it can also help you sell for the maximum price. Buyers and real estate agents are often influenced by the initial listing price. By pricing higher than the market suggests you run the risk of losing interest quickly. Instead of generating a buzz and creating a multiple offer situation, your property will most likely sit vacant while cheaper houses are being sold. With a high list price, you probably won’t get the showings you anticipated, and within a few weeks, you will be forced to make a decision about lowering the asking cost. Do you lower the price or hold steady and wait for buyers? Neither option is ideal. If you lower your price, it might be viewed as a sign of desperation and you can expect below asking price offers to come in. On the other hand, If you hold at your price, you could easily go weeks or months before you have a showing. The best option is to list at the right price from the start. This keeps your property fresh and real estate agents and buyers interested.
- Perfect Conditions Every Showing. Listing at the right price helps but it may not be enough to get an offer. When listing your home, you need to put yourself in the buyer’s shoes. Walk the property through their eyes. Whatever your first impression of the property is, the odds are, it will be the same for potential buyers. Start with the exterior of the home. For as long as your home is on the market, you need to constantly update the grass and landscaping. You can’t have overgrown shrubs or brown grass. The moment a person steps inside the property, the first impression needs to be strong. Avoid cooking strong smelling foods the night before you have a morning showing. It is tough to mask the smell of a fishy dinner, which could be enough to drive a buyer away. If the house is vacant, you need to stay on top of the temperature. With the weather warming, the house shouldn’t be too hot. Having a strong heat hit your buyer as soon as they open the door will having them speeding in and out of the showing. First impressions are critical with every buyer. Make sure the property is perfect every time you show it.
- Accept The Right Offer. It is important not to be tempted to take the highest offer. Price will always be a strong consideration but there is more to an offer than price. You need to check out the financing, closing date and contingencies. If you accept an offer that ultimately doesn’t close will force you to start the process all over again. There is no guarantee that buyers that were interested in your property weeks ago will still be around. It is quite possible that they have moved on to other homes. Review the pre-qualification letter with your real estate agent. Look at the type of loan they submit and the down payment. From there, you need to review the contract line by line. Are they asking for contingencies that are excessive or unreasonable? Are they looking for a credit or to keep certain items in the property? If the buyer is difficult when submitting an offer, odds are, they will be throughout the process. Only you, as the seller, knows what the final number is that you will accept. The right offer is usually the one that ends up closing in the easiest possible manner.
Selling your property can be confusing and overwhelming at times. Real estate markets change all the time and it is important to do everything right to get the highest possible price.
See Original at https://www.cthomesllc.com/2016/08/5-things-consider-selling-property/
