Sellers Minimize Surprises when Selling

Properties seem to be sitting on the market longer and also taking longer to close escrow once they are in contract. There are many reasons why this is happening.  If a property is sitting on the market without interest, it’s probably because it is not priced right and doesn’t show well.  You may want to consider a price reduction.  The value of what you think your home is worth may not be the same as the actual market value.  If the escrow is taking longer than expected, there may be issues with the loan. An FHA loan can take longer to close than if a conventional loan due to the paperwork involved and the appraisal process. FHA follows stricter guidelines than a conventional loan and this often can lead to a slower process of closing the deal if anything comes up that must be addressed. 

In addition to lending, buyers are savvier than ever.  With less competition they have more bargaining power than ever.  Often times, buyers will get into contract and then during the inspection contingency discover issues with the house that have not been addressed and rightfully so they want to renegotiate terms.  This negotiation process may take longer than in the past. 

The best decision a seller can make is to provide as many inspection reports as possible before taking offers. By doing this, the seller will minimize surprises during the transaction and it will allow you Realtor to price your property appropriately.  Your house will most likely get in offer faster than if you don’t provide reports. 

Reports can vary in price.  A typical fee for a pest report is approximately $250, a home inspection is about $400 and a roof inspection is about $150. The pest report will help you to determine if you should get a foundation report and if so that can cost up to $500. It’s also important to make sure you use a reputable company and your Realtor should be able to refer you to reputable inspectors and contractors

Don’t let the buyer determine the price of your house. By being prepared, you will minimize surprises and have a smoother transaction.

"If you don't own a home, buy one." John Paulson

You may have heard successful hedge fund manager John Paulson's recent comments regarding inflation.  He told a standing room only crowd at New York's University Club that double digit inflation is on its way.  With regards to real estate, Mr. Paulson suggested, "If you don’t own a home, buy one.  If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.” 

In an inflationary environment, a fixed mortgage becomes less of a burden as wages and consumer prices increase.  The loan is essentially paid back with less valuable dollars than were originally borrowed.  Whether or not Mr. Paulson's prediction regarding inflation holds true is yet to be seen, but his track record is impressive.  Locking in a 30 year fixed rate loan at today's rates and paying it back in future, cheaper dollars sounds wise to me.