Top Three Issues to Avoid During Escrow
The selling agent is the number one ally for the seller to (wait for it) sell their house. As such there are some critical obstacles to avoid in order to make sure the sale closes. Once the seller accepts the buyer’s offer the legal agreement is locked in for the duration of the escrow process. This phase is where the obstacles can rear their ugly heads. During this time the seller cannot entertain any other offers. They must wait for the buyer to move through the inspection process and the escrow process before the entire transaction is complete. This is where the delicate transaction can potentially run into problems and even fall apart.
Home Inspection Foibles
Buyers will order an inspection of the house. The results of the inspection report give the buyer the option to walk away from the deal, re-negotiate terms or make change requests. If it is a buyers’ market this puts the seller at a disadvantage and increases pressure on the seller to fulfill buyer requests. The seller is not obligated to fulfill the requests but if they are motivated to sell and don’t want to lose the deal then it is a good idea to fulfill all reasonable requests.
The best way to approach this is to be proactive and expect a certain amount of repair requests by building in a contingency budget into the list price of the home. This figure should be based on the age and condition of the home. The seller would be wise to order their own inspection report and base the contingency amount on repair recommendations on that initial preliminary report. This is a smart way to reduce sticker shock for the seller when the buyer presents their fix it list.
Depending on if your home is a first time home buyer property or a secondary home buyer property makes a huge difference on the types of requests to expect. For example, a first time home buyer is less likely to make repair requests unless there are major items found during inspection and if their agent coaches them to request the repair. Otherwise, the first time home buyer is so thrilled to actually own their first home they are not as concerned about items to repair.
A property that is more of a secondary home purchase such as one that has larger square footage or is a retirement property will most likely receive a larger list of repair requests because the type of buyer is more savvy and wants to avoid post purchase expenses as much as possible. This type of buyer has experience with the cost of maintaining a property. Especially if it is a retirement property with a buyer who has a fixed retirement income, expect a big push for repair items during the sale process.
Some common fix it items that a buyer may request include;
- roof repair or replacement
- plumbing issues
- electrical issues
- HVAC replacement
- window repair or replacement