| Questions that sellers frequently
ask. Q. Why shouldn’t I price my
house a little high, since I can always drop the price later?
A. That’s a strategy that sounds good – but, in fact, is
more likely to result in a lower price. Here’s why. The first few
weeks a house is on the market is when it will have the most
activity. If a house is overpriced, it has to compete with houses at
that higher price level, which are houses at that higher price
level, which are almost certainly larger or have newer/more
luxurious features.
So the overpriced home is unlikely to
attract an offer. Worse yet, those first weeks are when real estate
agents preview the house. If it’s overpriced, they may not even
bother to show it to their buyers. Eventually, the seller will have to
drop the price – and may end up with an even lower price because
buyers will wonder why the house has been on the market so long and
may factor that into their offer.
Q. What is meant by the term
“contingency” in a sales contract?
A. Sales contracts typically
contain several “contingency” clauses, or stipulations that the
sale is subject to. For example, with a mortgage contingency, if the
buyer is unable to obtain financing within the specified timeframe,
neither the buyer nor the seller is required to complete the purchase.
Among other common provisions in the “subject to” section are
termite and other inspection issues and the purchaser’s need to sell
a current home first. |
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Q. What is an escape clause?
A. An escape clause, also known
as a kickout or knockout clause, is a provision that allows the party
to void the contract. For example, the seller may retain the right to
look for a more favorable offer, with the original purchaser retaining
the right, if challenged, either to firm up the first sales contract
(such as by waiving a contingency) or to void the contract. As another
example, sellers might insist upon an escape clause in a contract that
hinges on the buyers’ selling their home.
Q. What should I do if the buyer's
appraisal doesn't go through?
A. It may reassure you to know
that Smitha will supply to the appraiser "market
comparables" that will help substantiate your home's selling
price. Occasionally, however, and especially in a high-demand market
where buyers bid up prices, the appraised value may fall short. Should
that happen, getting a second appraisal is one possibility.
Alternatively, in many cases the buyer will be willing to make up the
shortfall, although you might want to make concessions, such as
leaving behind some items such as appliances, lighting fixtures or
other items you planned to take with you. Other possibilities are that
you and the buyer decide to split the difference, or you might agree
to adjust the price to the appraised level.
Q. What happens if the home
inspections reveal a serious problem?
A. Generally, if the home
inspections reveal a serious problem, the buyer who has a properly
drafted contract can get out of the contract. What usually happens,
however is that the cost of remedying the problem becomes an issue of
negotiation. This is where the Smitha's negotiating skills can be
critical in resolving the issue and keeping the home sale moving.
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