There are a lot of warnings out there for buyers who are looking for a new home and the red flags they might see during showings, but there are far fewer warnings for homeowners to help them avoid a bad sale. While there aren’t as many red flags for sellers, there are still a few extremely important ones that they should all know and be able to identify if they show up. Here are some of those red flags and how they can have a negative effect on the sale of a home.
The Buyer is Pre-Qualified, Not Pre-Approved
When buying a home, it’s always recommended to get pre-approved for a mortgage early in the process to save time and also use it as an appealing factor in an offer. When a buyer gets pre-approved, they are taking the first step of getting a mortgage that all buyers will need to do, and it involves the lender doing in-depth research of the buyer to determine if they should be allowed that mortgage. However, if a buyer is only pre-qualified for a mortgage, it means that they haven’t gone through that process, and the only information the lender knows about them is user-submitted information that may not be completely accurate.
The Offer Has Too Many Contingencies
Nearly every offer is going to have at least one contingency, and many will use three common ones that cover all the basic problems that could come up before closing such as having loan approval revoked or the home not actually being worth what it was sold for. However, the problem with contingencies in offers is when it feels like the buyer is abusing them to the point where they’re given a way out from the deal in the event of any inconvenience. If something looks shady, don’t hesitate to ask an agent for advice. They will be able to clarify if something is completely normal or if the buyer is trying to give themselves as many outs as possible.
The Earnest Money Payment Is Small or Nonexistent
When buying a new home, buyers will put down an earnest money offer as part of their offer. The payment can be as much or as little as they deem appropriate, and if their offer is accepted, the homeowner will get that earnest money payment. If the buyer decides to pull out of the deal after the offer has been accepted and don’t have the protection of a contingency, the seller is allowed to keep the earnest money payment. Because of this, buyers often like to offer large earnest money payments in order to show the seller that they’re serious about the home and won’t try to back out at a moment’s notice. Buyers who have a small or nonexistent earnest money offer may not be serious about the home, and it can be a sign that they’re trying to make it easier for themselves to back out of the deal if something better comes along.
The Buyer Tries To Move Too Quickly or Slowly
Once an offer has been accepted, the Colbert WA home buyer and seller should have an agreement on the entire timeline of the sale. However, if the buyer agrees to that initial schedule and they then try to either ask for more time or ask to move forward ahead of schedule, it can be a sign that something is wrong. Wanting to change the schedule can potentially mean the buyer is having trouble with their mortgage and needs more time, or possibly even that they’re trying to cut corners to speed the process along. Either way, it’s important that both parties stick with a schedule once it’s been agreed upon.
Sellers need to know about red flags just as much as buyers do, and knowing these signs can help protect homeowners from a deal that could complicate their sale.