You have just managed to sign the sales contract after successful FSBO negotiation. The good news is that you are almost there to close your deal successfully. The bad news is that you are not quite there. However, there is still room for the deal to fall through even after buyer has signed the sales contract.
Mortgage Fall-Through's
The ability of your buyer to purchase the FSBO home is dependent greatly on his or her mortgage approval. It would be a major deal killer, if your buyer does not get his or her mortgage approved to buy your FSBO house. It is impossible for the buyer to buy your FSBO house without financing.
It is best to pre-qualify your buyers in order to avoid such problems. You need to ask buyers for a pre-approval letter from a lender. Serious buyers will already have pre-approved for a mortgage. You need to ensure that mortgage loan amount for which buyer has been pre-approved for will cover the sales price of your FSBO home.
You can also help the buyer in obtaining finance. If you are working with a real estate attorney, then he or she can assist the buyer in contacting a lender or mortgage broker. Otherwise, you can recommendations on lenders or brokers by contacting a local real estate agency.
It is advisable for you to go for buyers that have been pre-approved for a mortgage loan. In this way, you can reduce the likelihood of a deal-killing surprise later on in the FSBO housing transaction.
The inspection and the buyer's mortgage are two big parts of FSBO housing transaction are still pending.
Housing Inspections
The buyer has the right to have inspection of your FSBO property with most standard sales contracts. The deal could end up turning bad if the buyer is not satisfied with these inspections of your FSBO home.
Buyer can have the following three major inspections to your FSBO home:
- Termite Inspection. The termite inspection is equally important as your home is probably built of wood. Depending on your state's laws either you or the buyer could be responsible for the termite inspection.
You need to get a letter from a licensed pest control company that states that your FSBO home does not have any termites if it is your responsibility as the seller to get termite inspection.
In spite of who pays for the inspection, you, or the buyer, it is your responsibility as a seller of the FSBO home to fix the problem before closing the deal.
- Roof Inspection. If the roof inspection results in repairs to be completed, then it is your responsibility to cover the repairs.
- General Inspection. This is an inspection of major appliances such as, air conditioning, plumbing, heating, and electrical systems. As the seller, this is too your responsibility to get the problem to fixed or replaced.
It is advisable to complete your own inspection before you put the FSBO home on the market to such inspection problems. In this way, you will have time to fix the problems before a buyer's inspector catches them. In many cases, it would cost less to fix the problems when your own inspector finds them.
Alternatively, there is option of selling the FSBO home "as is" You can include such a stipulation in the sales contract.
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