Joe Always Recommends Selling As-Is:
This relieves you the seller from being under any obligation to fix any defects that might arises during the inspection. The inspection period should not be more than 10 days preferably less. During the inspection period the buyer can cancel for any reason and receive their deposit back and is released from the contract.
Once results from inspection are in, many times buyers will ask for the owner to fix or repair certain items. If the items that are requested to be fixed are mortgage issues, the homeowner has to decide if they want to hold the deal together to fix those. If the owner does not agree to fix the items, the contract will have to be cancelled as the property will not qualify for the buyer’s mortgage so the buyers deposit must be returned and released from the contract. If the problem items are going to make the house not qualify for a mortgage the owner has a problem, because it will have to be changed to a cash only buyer, which will normally be an investor who will want to pay far less then market value.
A 4-point inspection must be completed to qualify for insurance: Roof – A/C – Electric – Plumbing.
If the 4 point does not pass inspection the items that failed must be fixed by the owner, or the buyer will not be able to get insurance, and the deal will have to be cancelled.
Optional mitigation inspection: This is only for the buyer’s benefit and does not affect the contract) if property has hurricane shutters or impact glass a wind mitigation and if it passes will lower the policy premium a lot.
FHA: buyer can put as little as 3.5% down and can ask for as much as 6% back from seller in closing costs. I never recommend the seller to agree to more than 3% back. Sometimes buyers will ask for nothing back. When we receive an offer, if any money back from owner is requested it will be in the offer contract. Sometimes buyers use this program because qualifying ratio’s, credit scores and down payment required, are a lot lower then Conventional Mortgages.
VA: many different programs: This is for Active & Retired Military and has a zero down payment. They had a bad reputation in the far past, but working well now. We will look at the buyer’s program when a offer is submitted.
Conventional Mortgages: There are many different programs- I will review with you what is offered. Normally they put a higher down payment yet can also ask for closing cost assistance from seller.
Cash: Cash is great! Do not have to do anything other than agree on price and close. The cash buyer does normally do an inspection and the 10 day As-Is rule would apply.
A buyer with any mortgage has to pay in advance at closing the full years plus 3 months of the Homeowners Insurance Policy, plus closing costs. The buyers lender will provide the total cash needed for closing, in a Good Faith Estimate. The amount of cash to pay for all items required for closing costs is substantial, and that is above the down payment, so that is why it is common for buyers to ask for allowable closing coasts to be paid by the seller. Every Mortgage Lenders fees are different. The buyer must have necessary cash to close to obtain the mortgage and their lender provides a Pre-Approval letter based upon obtaining financing approval that takes about 45 days.
ONCE THE OFFER IS ACCEPTED:
( We do not want a seller & buyer have to cancel a contract due to above reasons. So we can write extensions that are agreeable to both seller & buyer, and keep the transaction working toward the closing.)
ON THE DAY OF CLOSING: All furniture is to be moved out and house is to be clean and all items must be working as they were at time of entering the contract. A final walk- thru is done just before going to the closing.
If the seller cannot be at the closing, the closing company can have them sign their end and if needed mail documents with instructions.
Seller – needs to call to cancel service after closing- All services must be on including hot water for final walk- thru just before closing.