Seller Mistakes to Avoid When A House Is Under Contract

Selling a home can be a complex and emotional process, especially when the house is already under contract. As a seller, it's crucial to navigate this phase carefully to ensure a smooth and successful transaction. In this blog post, we'll explore common pitfalls sellers should avoid when their house is under contract and provide expert advice on choosing the right real estate agent to guide you through the process.

Understanding the Challenges of Selling a House Under Contract

Once your house is under contract, you might think the hard part is over. However, this stage presents its own set of challenges that sellers must be prepared to handle. From maintaining motivation to sell to dealing with appraisal and inspection issues, sellers need to stay vigilant and proactive to prevent delays or complications.

Losing Motivation to Sell

One of the most significant hurdles sellers face when their house is under contract is maintaining the motivation to sell. Emotional attachments to the property, reconciled marriages, or resolved financial hardships can all contribute to a seller's reluctance to follow through with the transaction. It's essential to remember that backing out of a contract can have serious consequences, such as breach of contract and reimbursement of the buyer's earnest money and expenses.

Struggling to Find a Suitable Replacement Property

In a competitive real estate market like the Raleigh-Durham Triangle, sellers often hesitate to list their homes because they fear not finding a suitable replacement property. With rising demand and home values, sellers may feel pressured to secure their next home before selling their current one. This can lead to contingent offers, which many sellers are reluctant to accept due to the uncertainty of the buyer's house selling.

‍

‍

Navigating Appraisal and Inspection Hurdles

When a house is under contract, appraisal and inspection processes can present additional challenges for sellers. It's crucial to cooperate fully with these procedures to avoid delays and ensure a smooth transaction.

Allowing Appraiser and Inspector Access

Sellers must allow appraisers and inspectors timely access to the property to assess its value and condition. Denying or delaying access can significantly impact the negotiation timeline and potentially jeopardize the sale. If repairs are needed, sellers should work with their agent to reach a written agreement with the buyer on how to handle them before the due diligence deadline passes.

Dealing with Appraisal Shortfalls

In a strong seller's market, appraisal values may struggle to keep pace with rising demand. If an appraisal falls short of the purchase price, sellers may need to reduce the price or risk the buyer walking away. FHA and VA buyers are entitled to a full refund of earnest money and due diligence if the home fails to appraise, so sellers should be prepared for this possibility.

‍

Sellers need to make sure they do not remove more property than is expected from the property they're selling.

Avoiding Common Seller Missteps

Beyond appraisal and inspection issues, sellers should be aware of other potential pitfalls that can derail a sale when a house is under contract.

Removing Property Believed to Be Included

Sellers must be careful not to remove more property than expected from the premises. Buyers expect the home to be in the same or better condition as it was during the showing, so removing items they believed were included can cause friction and potentially lead to a terminated sale.

Clearing Liens and Encumbrances

It is the seller's responsibility to clear any liens or encumbrances on the property before closing. Failure to do so means the seller doesn't have "marketable title," which is considered a breach of contract. In such cases, the buyer is entitled to a full refund of earnest money, due diligence, and reimbursement of all expenses associated with the purchase process.

Completing Agreed-Upon Repairs

If the seller agrees to make repairs requested by the buyer during the due diligence period, they must follow through on this commitment. The signed due diligence repair request form becomes an addendum to the purchase contract, and failure to complete the repairs constitutes a clear breach of the agreement.

Providing Accurate Information

Sellers must provide accurate information about the home and neighborhood to the buyer through the property disclosure form. Any omissions or misrepresentations, whether intentional or negligent, can lead to liability for the seller and their agent. If hidden or unknown defects are subsequently discovered, the buyer may feel cheated and elect to terminate the sale.

‍

Any missed information will be to the liability of the listing agent. Buyers must carefully review the known possible defects and discuss with their agent before going under contract. The real estate agent could be in big trouble if they omitted a material fact, willfully misrepresented a material fact or neglectfully misrepresented a material fact. If the seller and the agent does not disclose all hidden or unknown defects and they are subsequently discovered, The buyer may feel cheated and would elect to terminate.

Builder Miscalculates Completion Date Of New Home

If you are purchasing to build, this applies to you. Many builders have their own purchase contracts. It is critically important to use a real estate agent when negotiating with a builder. Builder contracts tend to be vague and arbitrary. Needless to say, having a buyer’s agent to assist is free of charge because the builder always pays the commission. And a builder purchase contract, they will always have provisions to protect them in the event of a completion miscalculation. If the builder misses any deadline dates, there is usually language that offers very little concession to the buyer for the inconvenience. At that point, it’s up to the buyer if they wish to continue with the purchase.

Choosing the Right Real Estate Agent

Having proper representation is essential for home sellers to navigate the complexities of a sale under contract. An experienced real estate agent can guide you through the process, protect your interests, and help you avoid costly mistakes.

When selecting an agent, look for someone with a proven track record of success and a deep understanding of the local market. They should be able to provide comprehensive service, from pricing your home competitively to negotiating repairs and contingencies on your behalf.

A skilled agent will also help you manage your expectations throughout the process. They'll prepare you for the likelihood of defects being found during inspections and the potential for renegotiation. They'll also advise you on the importance of maintaining your financial status until after closing to avoid financing snags for your buyer.

Final Thoughts From Tim

Selling a house under contract requires careful attention to detail and a proactive approach to avoid common pitfalls. By understanding the challenges, navigating appraisal and inspection hurdles, and avoiding missteps like removing property or failing to complete repairs, sellers can protect their interests and ensure a smooth transaction.

Ultimately, the key to a successful sale is working with a trusted and experienced real estate agent. With their expertise and guidance, you can minimize stress, maximize your sale price, and enjoy a seamless process from contract to closing.

If you're considering selling your home in the Raleigh-Durham Triangle area, contact the Tim M. Clarke Team today. With over 17 years of experience and a commitment to client satisfaction, we'll help you avoid costly mistakes and achieve your real estate goals with confidence.

Frequently Asked Questions

What are the most common mistakes sellers make once their home is under contract?

The most common mistakes are stopping marketing and promotions, taking the buyer's inspection personally, and making large purchases that affect their financial status.

How can sellers avoid sabotaging their own home sale?

Sellers can avoid sabotaging their sale by continuing to market the home to get backup offers, understanding that the buyer's inspection will likely find defects and require renegotiation, and avoiding large purchases until after closing.

Why is it important for sellers to keep marketing a home that is under contract?

Marketing a home under contract can create leverage with backup offers to help push along an existing contract. It also provides a safety net if the current contract falls through.

What should sellers do if the buyer's inspection uncovers defects?

Sellers should expect that the buyer's professional inspection will likely find defects that require some renegotiation. It's important not to take this personally as it is standard procedure.

How can sellers manage their expectations regarding home inspections?

Sellers can manage expectations by realizing that renegotiations after a home inspection are common and do not necessarily reflect on the condition of the home. A real estate professional can help provide perspective.

Why should sellers avoid large purchases before closing?

Large purchases can negatively affect a seller's financial status, which can cause issues with the buyer's financing and potentially jeopardize or delay the sale.

What is the benefit of working with an experienced real estate agent?

An experienced real estate agent can provide expertise to simplify transactions, guide sellers through common pitfalls, and protect the seller's interests throughout the entire selling process.

How can an agent make the selling process smoother?

Agents can make the process smoother by managing paperwork, disclosures, and negotiations, marketing the home, screening buyers, and providing insight on pricing, terms, and timelines based on market conditions.

What should sellers look for in selecting a real estate agent?

Sellers should look for an agent with extensive experience, a proven track record of success, strong local market knowledge, and exemplary client service and communication skills.

Vetting reviews is also recommended.

Why is it advantageous to work with a real estate team versus a solo agent?

A real estate team can provide sellers with more comprehensive service, broader expertise, and added assurances that their sale will be handled efficiently even if an individual agent is unavailable.