Thursday, October 17, 2019 / by Gianfranco
You purchase your dream home and you are so excited and start telling your loved ones and then you do the home inspection and find out some major problems with the house…What do you do? Honesty is the best policy!
You know, when you're selling your home, smart sellers are very proactive in disclosing all the defects of their home prior to the closing or to an offer, so this way, the prospective buyer knows any repairs or any major items that need to be known about, because this can prevent losses. This can prevent the buyers from backing out of a deal.
The smart sellers, they do take this more proactive approach.
One of the big ones that you need to be aware of, whether you're a buyer or a seller, is these kind of utilities, furnace, AC, hot water tank rentals. People don't realize that when they get into these, mostly AC or furnace rentals, to get out of it, can be a huge hassle. Sometimes you're penalties can be $7,000, $8,000. Sometimes even $25,000 - $30,000.
We had a scenario where the seller didn't disclose to us how much it was to actually get out of the rental agreement or the fact that the furnace was even a rental, and when we got too close to the closing date, the lawyers discovered that, wait a minute, it's going to cost $12,000 to buy out this item and to transfer the rental agreements is also a huge cost, and also maybe something the buyer doesn't want to do.
And here's the thing. These companies, they're crooks. These companies, they get people locked into these long-term contracts with hefty, hefty buy-out penalties. And then when you're at a situation where you have one day to close, that's when they really try to leverage, because they know you're desperate, so they give you a higher amount. That situation where they said $25,000 it was just out of line, like out of this world, and basically they settled for something around $15,000.
But the seller had to do that. If the seller didn't close, the buyer was going to sue them, because now the buyer also sold their house. So, they were basically had everything in a truck ready to move. You don't want to leave these things to the last minute.
The best solution, be proactive, get ahead of it, make sure that you call them up. First of all, never get into these contracts. Before you do, just remember this article.
Or at least review ... if you are going to get into it, review it and make sure that the penalties are not that harsh and the buy-outs are not too expensive.
A lot of buyers will not assume that contract because what happens is once you're selling your house, if the buyer has to assume that contract, and they don't do that, then basically you have to pay that penalty.
Also, the purchase price assumes these owned fixtures and products that are in the house, so if later they find out it's not owned, well a furnace could be like $5,000 or an AC could be whatever number, so that could be reduced from their purchase price as well.
And other things, like having a pre-inspection report can really help you as well, if there are leaks in the basement or certain cracks or anything that can really turn the buyer off during the due diligence period can really help you. So, if you know what defects you have in the house, you can easily fix it for a lot less than having the buyer do an inspection, they walk away, they ask you for a huge price reduction.
Be proactive and you'll sell your home for top dollars and much faster.
What can you say about today’s Seller's Secret Tip? Like and Follow us our Page and get up-to-date Tips daily for FREE!