Common Challenges When Selling Your Home and How to Overcome Them
Selling a home is a significant milestone. It can be a complex process, considering all the steps involved: cosmetic touch-ups, obtaining estimates, making repairs, marketing and promotion, navigating the closing process, and finally moving into your next place. Luckily, Team Broady is always here to help! That’s why we’re diving into the most common challenges of selling a home and, of course, how to overcome them.
Challenge #1 - Inspections Gone Wrong
One of the most frustrating, stressful and disappointing experiences when selling a home is accepting an excellent offer, only to have it fall apart after your home inspection. This happens when the inspection reveals an issue, or multiple issues that come as a surprise to the buyer—and perhaps even to you, the seller. This can create two possible outcomes, neither of which is very pleasant. The first possibility is that the buyer tries to renegotiate the price you accepted in the initial offer, which can end up costing you thousands of dollars. The other scenario is the buyer declares their offer null and void, which can have even greater consequences for the seller. When this happens, the seller must then disclose these newly discovered issues to all other potential buyers, and this can make the property more difficult to sell. They must now re-market the property and risk the stigma of having something “wrong” with their home.
How can you avoid this pitfall? By having a pre-listing building inspection done.
At Team Broady, we recommend that our sellers conduct their own home inspection before listing their property. This way, there are no surprises. You can then fix what’s necessary before listing your home or disclose the required repairs to buyers and provide estimates. A pre-listing building inspection is a great way to determine a fair listing price, improve buyer confidence, and reduce stress and eliminate surprises for all parties involved.
Challenge #2 - Financing Declined
According to the National Association of Realtors’ Home Buyers and Sellers Generational Trends Report, 88% of home buyers finance their purchase. Even though the pre-approval process puts a borrower’s finances under the microscope, it still happens that a buyer’s mortgage application is declined even after they get the initial green light from the lender. The lender may find that the information initially provided isn’t 100% accurate or that the buyer has other issues that affect their creditworthiness. For example, the buyer’s debt-to-income ratio might suddenly become inflated, or their credit score could drop significantly, jeopardizing their borrowing capacity. Issues can also stem from taking on a new job, opening a new credit account, or making another big purchase, like buying or leasing a new car.
How can you avoid this challenge? Always ask for a pre-approval letter from any buyer submitting an offer. While a pre-approval letter isn’t a guarantee that their mortgage application will be approved, it’s the best way to weed out unqualified buyers.
Another important consideration is the size of the buyer’s down payment. A buyer putting 20% or more cash down is typically more reliable than one showing only 5%. In this case… size does matter!
Challenge #3 - Hidden Defects
According to the OACIQ, the authority that regulates real estate brokerage in Quebec, a defect is “hidden” if it has all the following features:
- It existed when the immovable was purchased.
- It is unknown to the buyer.
- It is not apparent.
- It is so serious that, if the buyer was aware of it, they would probably not have bought the immovable or would have asked for a price reduction.
There are cases where buyers discover a severe hidden defect after the sale and seek to claim reimbursement from the seller for damages. When a buyer and a seller can’t agree on a settlement, these situations can end up in court. Yikes!
How can you avoid this pitfall? The only way to prevent this from happening is to sell without what is called legal warranty of quality.
Opting to sell without legal warranty has its pros and cons. Although it offers you protection against future liability, it can also raise some red flags in the minds of potential buyers and possibly reduce the sale price of your home.
To reduce the risk of experiencing these challenges, we recommend hiring a professional real estate broker. At Team Broady, we have dealt with all of the previously mentioned issues. Not only can we set you up for success from the very beginning, but if any of these issues should arise, we will be there to help every step of the way. Don’t hesitate to reach out to us with any questions or concerns at 514-613-2988 or firstname.lastname@example.org.