If your goal is to sell your home and not just gaze dreamily at the beautiful glossy photos of your perfectly staged guest room, then it’s a good idea to understand some of the things that can derail the sale if you’re not careful. While this is not an exhaustive list, it can certainly help you avoid some common traps that can result in a stressful, hair-pulling and maybe not-so-profitable experience.
1. DON’T Mess With The “As-Is” Clause
Whether you don’t want to be bothered with repairs or don’t have the money for them, you may opt to sell your home “as-is”. Often, the sale price is reduced accordingly and takes into account any defects that the buyer may need to address.
“As-is” has a legal definition, and it means that you as the seller will not be doing any repairs or paying for any repairs to be done. But that doesn’t mean that you can conceal defects or deceive buyers about existing issues.
In New Jersey, sellers are required by law to tell potential buyers about any “known, latent material defects.” For example, if you’re aware that the bay window in your living room leaks like a sieve when it rains, but there’s no obvious sign of the leak, you’ll want to disclose this.
Hidden issues that may affect health or safety are also important to disclose. For example, if you know that there is a mold issue that isn’t visibly obvious, you’ll want to disclose this as well.
Failing to do so can delay the sale, cause the deal to fall apart, or even result in lawsuits later.
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2. DON’T File Bankruptcy While Trying To Sell
Depending on the chapter you file, there are different rules governing the sale of your home. Chapter 7 bankruptcy, for example, is considered a “no asset” case. Debts are discharged without liquidation of assets, unless you’re above your allowable exemptions, in which case your house will be sold to pay creditors. Chapter 13 requires that you get permission from the trustee before you can sell or refinance.
Sound complicated? It’s true that the laws are complex, and your attorney should be able to guide you appropriately, but your best bet is to wait until your bankruptcy is completed or you risk holding up the sale and even running afoul of the law. If you’re involved in a bankruptcy, then advise your real estate agent and real estate attorney immediately.
3. DON’T Include Personal Property In A Contract
You may be willing to let your widescreen TV stay when you go, or perhaps you’ve agreed to leave your patio furniture or pool table to the buyers. It’s fair for them to want this in a written agreement, but including these items in the sale contract can cause issues when the buyer attempts to obtain a loan, and ultimately result in delays.
The home’s appraisal will inform the buyer’s ability to get a loan, and lenders don’t want to see items in the contract that will drive up the price. Nor will lenders finance the purchase of personal property so they will likely ask for those items to be removed anyway. Write up a separate agreement and avoid unnecessary delays in the mortgage process.
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4. DON’T Overprice Your Home
You love your home. And you think it’s worth every penny. Maybe you’ve just installed some gorgeous flooring and you think the dÃ©cor is absolutely stunning. Naturally you want to make as much as possible on the sale. But starting with an asking price that’s too high can backfire in a couple of ways.
At its simplest, it can scare buyers off. Real estate agents will recognize an overpriced home and steer clients away, especially if that home is priced above what other homes in the neighborhood are selling for.
It can also take longer to sell your home, and the longer your home is on the market, the more potential buyers will begin to wonder what’s wrong with it and why it hasn’t sold.
But let’s say you find buyers who are so in love with your home that they have to have it and are willing to pay your price. In order for the buyer to obtain a mortgage, the house needs to be appraised, and it’s likely going to appraise lower than the price. No bank is going to lend a buyer more than the house is worth. That means you’ll either have to reduce the price to meet the appraisal, or the buyers will have to put up the cash to bridge the gap. The end result can mean delays and even a lost sale.
5. DON’T Leave Loose Ends On Repairs And Upgrades
Whether you’ve knocked out part of a wall to put in an extra door, installed a new deck or remodeled the bathroom, you may have tackled it as a DIY project that didn’t include permits. The problem with doing some of these upgrades and modifications is that without permits, they’re illegal. And when it comes to selling your house, any work you’ve done that should have been done with a permit but wasn’t has the potential to hold up and derail your sale.
Installing a new deck, new air conditioning unit, or new electrical wiring, for example, are all things that homeowners commonly do without obtaining the proper permits. Before you try to sell your home, check with the township and close up any loose ends.
Likewise, especially if you’re not selling your home as-is, make any necessary repairs that can result in a failed inspection. If basic things like light switches, stove burners or smoke detectors aren’t functioning properly, making these repairs in advance can lead to a smoother inspection process. Otherwise you risk delaying the sale as you take time out to make repairs and then schedule a new inspection.
6. DON’T Attempt To Handle An Estate Sale On Your Own
If you’re an heir or executor of an estate, chances are you haven’t been living in the home. You’ve likely not been responsible for upkeep and may not be fully aware of the condition of the house. That means there are probably questions you don’t know how to answer, like how old is the furnace? And has it been maintained? Are there any structural issues? Leaks? Mold?
Don’t guess. Unless you’re sure of the answers, you could lose the sale or be setting yourself up for a lawsuit later.
There are other issues that can cause setbacks, for example, failing to obtain a death certificate, or failing to properly file and settle taxes or bills. Rather than risk delays, losing money, or other headaches, consult with your real estate attorney to ensure that the details are in place.
Selling a home can be an exciting time, and a stressful time. You can make the process go more smoothly, protect your interests and still get the best possible outcome if you consider some of these key factors. There’s a lot that goes into a successful sale, so if you’re planning to sell a house then get in touch with us for a free consultation. We’re happy to answer your questions and work on your behalf to smooth the journey for you.