Most home sellers are focused on getting the most amount possible for their home, which makes sense -- after all your home is your largest investment! Sometimes it isnt until much later, after offers are being put in front of them, that they stop to consider the terms of the deal. We thought it might help to have a quick crash course on what those terms are, how they could affect your deal and how much you actually walk away with!!
Most loans can close in 30 days
If a buyer is buying in cash, they could close much faster!
What is YOUR timeline? If you need to move quickly, cash followed by conventional financing are going to be your fastest financing terms!
Need more time?
Negotiate a rent-back that allows you to close on the home and stay in it while renting-back from the new owners until a date mutually agreed. This is an easy way to line up timelines when you are selling one property and moving to another! You simply pay the new owner their daily mortgage rate for up to 60 days!
This program allows for a down payment as low as 3% and is typically used by buyers with higher credit scores. This program is available in all areas and generally has less strict appraisal guidelines than other programs. Seller assist is capped at 3% of the contract price unless the buyer is making a down payment of 10% or more.
The VA loan program allows for 100% financing and there are no longer county loan limits. Sellers are allowed to contribute toward the allowable buyer closing costs. Who better to sell to, than a buyer that has served our country?
Appraisals take a little longer since a certified VA appraiser is required.
If you are a seller in qualified geographic locations, a great way to advertise your home is with USA financing. It allows buyers to put 0% down on homes that are in areas that are considered rural! For properties in Carroll County, Harford County and other outlying areas in Maryland, this option could be for you!
Loans typically take longer to close, but are part of a governmentprogram and can be a great way to market your home!
The FHA loan program will allow you to target to a larger audience. The minimum down payment is 3.5% and this program allows for a higher debt to income ratio along with competitive rates -- even when a buyer doesnt have credit scores over 700. Seller assist is capped at 6% of the purchase price.
The appraisal is slightly more strict, since safety standards are important, and things like handrails are required.
No matter what type of financing your buyer brings to the table, make sure your agent calls the lender who has drafted the pre-approval to ensure the buyer is well-qualified to purchase your home!
What are the buyers going to inspect?
The options include:
- General (mechanical/ structural/ systems)
- Well, water and septic (if applicable)
- As recommended by inspector
What amount of time are they going to take to complete these inspections? Because this part of the process is a reason some deals fall apart, you want this to be as fast as possible!
Is the offer as-is?
As-is without inspections means that inspections are not a reason for the buyer to walk. As is with a right to terminate allows the buyer to do inspections within a certain period of time, and if they do not like what they find, they can walk away for any reason.
This is the earnest money deposit or a buyers skin in the game. If they decide to walk for a reason that is not allowable by the contract, you as the seller will be entitled to some or all of this deposit. Obviously, the higher the deposit, the more serious the buyer. Typically 1% is a normal amount.
Buyers are allowed to ask for seller help towards closing costs. The amount they are allowed to ask for varies by the type of financing they are using. They could ask for enough money to have all of their closing costs covered by you. This lessens the total net you will walk away with. Offering seller help is often the only way for certain buyers to be able to purchase your home, but you need to factor this in to your net total.
Was the offer clean, well-prepared and timely? Is the agent on the other side reputable? These factors are an indication of how the rest of the deal may go!
When you are ready to list your house interview agents who are well versed in all terms of the deal and if you ever have any questions, we are glad to help!