It’s About Price + Terms = Successful Closing!
Want to get the very most money for your home in this hot sellers’ market?
Most people don’t realize there is much more to selling a home than taking a few photos and throwing it on the MLS, especially if you want the very most for it.
This is why I created my series, “Get the Most for Your House Even In a Hot Seller’s Market” – to help you and anyone you know maximize the profits from your biggest investment and not get “caught up in what other people are doing.”
Over the next few weeks, I’m sharing my four steps to getting the most money possible when selling your home, even when a home can sell itself right now.
This is a must-read series, even if you aren’t selling a home anytime soon.
In this week’s article, we’ll talk terms and contingencies and the little-known clauses in the contract that could keep you from getting to the closing table. I’ll also explain why a cash offer is not always the best offer to choose.
Price Is Just The Beginning of The Conversation
When you get an offer, it’s exciting to look at the price and start celebrating, but there’s so many other terms and considerations in an offer you receive on your home other than just price. Not only do you want the best price, but you also want the best terms that work for your particular situation and timeline. You also want to be sure to accept the offer that is most likely going to make it to closing with the least amount of hassles or surprises.
Having an agent who really knows the contract is crucial to not only understanding the terms you are agreeing to, but also to make sure that you, as the seller, are protected from any loopholes or “outs” for the buyers through the under-contract phase. Minimizing these surprises can eliminate a lot of stress during this process. I make it a priority to know my contracts well, and stay current on the changes that are constantly being made by TREC.
So, price really is just the beginning of the conversation. Depending on the other terms in the contract (see below), the offer you accept could be full of hassles, contingencies that open up negotiations after taking your home off the market, and even determine how quickly you need to be out of your home.
But, on the pricing front, one thing to pay most attention to is your NET price. The price listed on the purchase price line, might not be the actual purchase price. We have to look at things like closing costs credits, rent back fees, and other terms found in the contract.
The final agreed upon price depends on the entire contract with each term clearly defined. Don’t worry, though, I have a cool spreadsheet I created to present each offer so you know what the final price will be.
One thing I do for my clients at this stage, is provide an estimated seller’s net sheet so you know exactly what to expect as far as proceeds based on the contract in hand, inclusive of things like commissions, other closing costs, transfer taxes, closing credits to the buyer, title charges all based on the agreed upon settlement date.
Everyone wants a great price for their home, but it’s important to look at the big picture. This will help us determine what offer is the very best offer for you, even if it’s not the highest offer you receive.
Equally As Important Are the TERMS of the Contract
All that is possible, but understanding the terms in the contract is important. Here’s a run down of the most important terms to pay attention to and why they are equally as important as the price your buyer will pay:
- Appraisal contingency – This is a big one these days. Homes are selling for more than the comparable homes will support and so we are seeing many contracts have issues with appraisals. There is a way to avoid this hassle…and I help my clients navigate this with a few tested techniques. This way, we’ve done everything we can to get the purchase price and the appraised value of the home to be the same and not have to open up price negotiations again.
- Financing contingency – Many lenders are making sure their buyer clients have all necessary documentation turned in and are as close to being approved for the loan as possible in order to assure that this contingency can be met with little to no disruptions during the under contract phase. Which makes the next bullet point very important…
- Lender choice – Of course, buyers can use any lender they want to finance their purchase, but it’s important to know which lender they are going with, as that will determine so much. I require a pre-approval letter and also call the lender to confirm that the buyer’s file has been fully approved, meaning, the lender already has pulled credit and has received all the documentation to fully approve the loan including things like the last two years worth of tax returns, two months of paystubs, banks statements and everything else they will need to get this contract to the closing table.
- EMD – That’s real estate ling for Earnest Money Deposit. This is the money the buyer sends to the title company saying they will show up for closing OR the money they get back if they void for a reason we allow in the contract.
- As-Is Clause – This is a tricky and can be frustrating clause in our contracts…I help my clients understand what this actually means.
- Home Inspection – This is the contingency that can make or break a deal after going under contract. Depending on what the inspector finds, it could even change the price you receive at closing. This is why my pre-market phase is so important and helpful to my sellers!
- Closing Date – We’ll discuss your ideal move-out timeline and suggest a preferred closing day that suits your ideal timeframe. Of course, I can’t guarantee that every buyer will be able to agree to the exact date you want and we certainly don’t want to scare off any potential buyers simply because of closing date, so this is something that I can say the sellers would prefer, if possible…a suggestion instead of a requirement.
- Lease Back – This is a great clause to include if you want to close on your current home and don’t want to move right away. If this is something that interests you, we can certainly negotiate for it.
- Title Company choice – Technically speaking, the buyer can choose the title company, but we can suggest a title company we prefer. The title company is a crucial choice to make because they are responsible for making sure closing happens on time and that everything that needs to be done while under contract goes smoothly. I have title companies I can suggest based on my experience with many around the Cypress area.
Why A Cash Offer Is Not Always The Best Offer To Choose
Cash offers are great to receive as long as they are the highest offer and there are no other terms (see above) that are deal breakers. If the cash offer isn’t the highest or has other terms that don’t make it as favorable, then it’s worth looking at how the financed offers measure-up. And, one thing we’ll look out for is a “cash” offer that’s not really cash. There are clues in the offer we’ll look out for. We’ll ask for proof of funds, for example, to make sure there is no funny business happening. I have had a buyer offer cash then once my client accepted their offer, attempted to flip to financing…What should you do then? I can help with that.
It’s All About You
I can’t reiterate enough, don’t focus solely on price, even in this seller market.
Yes, of course getting the best price is important, but equally as important is getting to the closing table and move-out day on YOUR terms.
And, don’t worry, I’ll be with you every step of the way and make sure you get the best price and the most favorable terms that fit YOUR particular situation, goals, needs and timeline.
If you or anyone you know is thinking about buying a home in the next year, I’d love to help. Email me and we’ll start with a conversion about why you are moving, where you are headed and when you want to be there.
I'm Jennifer Mestayer (Med-E-A) and I love helping Cypress families buy and sell their
homes as they move through the varying stages of life. From first homes to forever homes...
Let me know how I can help you make your real estate dreams come true.
Cy-Fair Real Estate
16718 House & Haul Rd, St N
Cypress, TX 77433
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