Disclaimer: This post is from the point of view of one individual. It will not be definitive but will try to be comprehensive.
For those that have begun to follow these posts, I apologize for the huge gap of time that has passed. Ideally I should have some great insight for you daily. I’m sorry to say that I don’t. I may need to expand our subject matter a little to things roughly related to real estate since this is a real estate site. Let me know what kind of things that you want to know or hear about.
In the meantime, I work specifically with the closing process in our agency. What this means is that you have a contract pending on your home and now you have to meet the criteria of the contract. I track that process to make sure that your home sells when the date arrives. There are always outside forces that I can’t control, but I do my best to make sure we do what we are required to do.
So let’s review some things to consider as a seller looking to close on a home. The first thing to consider is how much you want to clear on your home. This isn’t a new suggestion. You should have thought through the price when listing. However now you have a contract in hand telling you what someone is willing to pay for your home. Your real estate agent will have something called a Net Sheet that will break down your expenditures as a seller.
There are lots of things that will take a chunk out of the pie. Does the buyer require a termite inspection, home warranty, survey, repairs, or help with closing fees? All of these things eat into the bottom line you hope to receive. So let’s look at the various individual items.
As a buyer, a termite inspection is a very good thing. While it is called an inspection it is really the seller paying to set up pest control for the next year. If there is already a termite policy on the house it’s as simple as transferring the policy to the new owner at closing. If not, then it can cost you anywhere from $600 or more depending on the condition of the house and the provider. Nor does a termite inspection have to do only with bugs. It will include things like mold and moisture issues that may exist under a home. They are your best bet for catching issues under your new home. As a seller, you need to determine in advance if you are willing to pay for this item and plan it into your costs.
A home warranty is a program that covers basics items in your house. They can be a great idea if you know that your heating and air system are a little dated. Or the appliances may need TLC and are no longer under a manufacturer’s warranty. This is basically kind of a Murphy’s law protection. Anything that can go wrong will go wrong and usually within the first year. This is usually something that the buyer will request but a seller may opt to sell the house with a warranty being provided.
A survey is often the one thing that all buyers will be encouraged to get. Depending on the size of your property and where it is located, it can be quite an expenditure. At the minimum plan on $500 as a starting point. If you already have a current survey or plat, most buyers are okay with receiving that. If you are selling part of your land you will definitely want to plan for a survey since you are severing property into 2 parcels and will need a legal description for both.
Repairs. If a house is built, it will most likely need repairs unless it is a new construction. Depending on the buyers loan type and the condition of the house, you may not need to make any repairs. However certain types of loan investigators are going to call out things that you may have never thought of being wrong. No handrail on the front steps…You made need one now. When listing your home you can talk with your agent about the different types of loans and things that might be called out. Sometimes you can offer a cash settlement in lieu of repairs. Again, talk with your agent.
Finally, closing costs. Growing up I always believed that a buyer was required to have so much saved to put down on a home to purchase one. It makes sense that there are fees and taxes involved on both sides to buying a home. In Arkansas there is a loan known as a Rural Development loan that is designed to help first time home buyers. It is a 100% loan and it generally means that the seller will be expected to pay a percentage of the closing fees. Again, talk to your agent. They’ll tell you how to plan.
If this information is helpful, or has errors, be sure to let me know. The goal is to help and inform. Thanks.