If you have 5 minutes to watch my youtube video on top 10 buyer mistakes it may save you money and time. This current blog is for all the sellers that take buyers without agents or sell on your own without offering a buyers agent commission. When you are listing your house on your own, what is known as For Sale By Owner, you really want the buyer’s agent to guide their client through the transaction to avoid obstacles. At another time I will talk about FSBO’s but now I want you to know what could go wrong if a buyer does not have representation to guide them.
10) Showings- The buyers look at your home without an agent and they may not know what questions to ask before it is too late. Open permits, CO issues, garage conversions, finished basements, pools, decks, and additional bathrooms may be perfectly fine to them, but their bank may see it all very differently.
9) Pre- approvals – Buyers are placing offers without pre-approvals. In addition they may get a pre-approval from a lender but not necessarily have given in all their financial statements and paperwork. Some lenders work on volume, hand out pre-approvals with only running a credit score and don’t collect any additional paperwork until the offer is made. By then it is too late for the buyer if they can’t afford your home in the first place.
8) Budget- Without the preapproval the buyer has no idea what offer price combined with taxes and homeowners insurance they can actually afford. The difference of even just $50 on a mortgage could disqualify them.
7) Details – The buyers do not necessarily research things like property taxes or flood zones. Sometimes as the seller you may think you are listing your current taxes….but then you take away all your exemptions that the new buyer does not qualify for and now he can’t get a mortgage because the taxes are too high.
6) Inspection- The buyer on their own without an agent will try to negotiate for their own renovations, along with insignificant repairs asking for thousands of dollars off. If they work with a buyers agent they will know that the inspection is to make sure there are no plumbing, electrical, heating, structural or hazardous issues only.
5) Not doing an Inspection – The buyer may waive the inspection to get his offer accepted. If the buyer realizes down the line this was a mistake and at the walkthrough brings someone to look at house with them they may walk away that day. Depending upon the amount of the downpayment the buyer may not care to lose it.
4) Contracts- When a buyer signs the contract to move forward they may not understand that there are more out of pocket costs than just the down payment. The appraisal, the survey and the homeowners insurance cost around another 3K. Do you also know where the rest of the closing costs are coming from? The most common saying I hear from a buyer is “I have the money for the down payment” but not to purchase the home at that moment. You need to know how the buyer is purchasing the home before you accept them.
3) Waiving the appraisal – The buyer may waive the appraisal to get their offer accepted. If the home does not appraise and the buyer cannot come up with the money to compensate for the difference it stalls the deal. He may not decide to move forward or you may need to come down in price and the contract could be tied up for months.
2) Rate Lock- A buyer may choose a lender online so instead of one on one support, they are just uploading documents and waiting for next steps. If the buyer does not understand rate locking and does it too soon, you will either have no choice but to close before their rate lock expires, or your deal van once again blow up.
1) Closing Day – The buyer cannot do anything throughout the process of buying your home that will affect their credit score. They also cannot withdraw large sums of money or deposit large sums of money. Strict financial guidelines are put in place for anything involving money on the buyers part until the closing table. If the buyer decided to purchase new furniture prior to the closing and get set up for cable…when the bank goes to clear the file to close there will be a red flag.
So whether you are using a listing agent or selling on your own, a buyer’s agent will guide the buyer safely to the closing table to make the entire transaction smooth and stress free. Do your research and see how important it is for the buyer to be represented.