Homeowners sell their abodes for various reasons. Some do it to level up their lifestyle and move to a grander place. Others that aren’t so prosperous, on the other hand, may do it to relieve debts or finance a costly venture.
But regardless of the reasons for selling a home, it’ll always be an emotional and troublesome process. Every homeowner develops an attachment to their dwellings, even if they’re ready to leave it behind and move on to a more comfortable life.
The emotional aspect can even get heavier once you’re already facing the challenges commonly involved in selling a home. So here the difficulties you should expect before making that leap:
- Your Ongoing Mortgage
You can sell your home while still paying your mortgage, but it can come with some drawbacks. For instance, you sold it for less than the amount of debt it’s still up against. In this case, you need to inform your lender, and ask them to accept a loss, because the proceeds of the sale will be less than what they’re owed.
This process is called a short sale. This is particularly challenging, because you won’t have complete control of the offer you can accept. Instead, it will be your lender that will decide whether an offer should be approved or not.
So if you can wait to sell, do it when you’ve already built equity on your home. In a favorable mortgage rate, your property’s value can increase as your debt decreases. Simply calculate your equity through a free home equity calculator, and if the result is a positive figure, then you can cash that in when you sell.
Therefore, when you receive the proceeds of the sale, you can use it to pay off your remaining mortgage, any home equity loans that you may have, and your closing costs.
If you’re not working with an agent, setting a realistic price will prove harder than expected. You may end up overpricing your home because of your emotional attachment to it. But doing this could result in only a few, unfavorable offers.
To overcome this, use a comparable market analysis to determine a fair price for your home. It’s okay to underprice, as it will yield multiple offers, which will bid the price up in turn.
It would be nearly impossible to expect your home to sell at your exact asking price. All buyers, especially smart ones, will definitely negotiate.
You can list your home at a price that allows room for negotiation. Only it would be the opposite of the underpricing strategy described above. Still, it has good chances of working favorably, because the buyer can feel like they’re getting good value without selling you short.
Whether you sell for more or less than your asking price depends on how well you’ve staged or upgraded your home, and whether you’re in a buyer’s or seller’s market.
- Dealing with Buyers
Buyers will be interested to view your home in person, so expect a lot of requests to visit, including those made on a short notice. To be always ready to accommodate them, your home should always be clean, and looking staged.
And once you’ve found a serious buyer, you have to ensure that they have the money to buy. If they’re financing, they have to show you a pre-approval letter from a mortgage provider. Otherwise, if they’re paying in cash, they have to provide a proof of funds. Without those, you risk being in a serious bind if you need to close on a specific date.
Those are just the top challenges you’ll face, as there could be more depending on certain conditions and circumstances. Hence, thoroughly prepare before listing your home, and be sure that you can commit yourself to the whole, tedious process.