This is a great question, and “preparation” is a topic that I enjoy educating home sellers, home buyers, and industry professionals on.
The Short Answer
For home sellers, it boils down to their preparation prior to listing the home and getting it under contract. Have you ever sold a car? If so, you likely sold it in the best condition it had been since your ownership began. You cleaned it top to bottom, inside and out, had it washed and waxed, probably checked all the fluids, and maybe you even had it inspected. Additionally, you made sure you had the title. And more importantly, you made sure that the title was “clean.”
For home buyers, their preparation includes understanding their purchasing power, as well as cleaning up any financial loose ends that might hold things up during a transaction. Buyers should make sure they have a clear view of what they are looking for in a new home, and why they are looking for certain attributes. They also need to identify the key players in the decision-making process. If Mom is a decision maker, they better make sure she’s on board with the purchase.
In Greater Detail
As a home seller, if you invest that same preparation as you did when you sold that car we just talked about, you give yourself the best chance for a quick sale and a smooth closing.
Preparation includes: 1) understanding the value of the home as well as all the closing costs associated with selling; 2) cleaning, staging and putting together a well thought out packing plan; 3) hiring an inspector to address issues upfront; 4) calling your local municipality to order and pay for any government required inspections; and 5) delivering your legal documents – like title, deed, survey, mortgage payoff statements, property tax receipts, etc., to your real estate attorney early on provides you a great chance at closing quickly.
As a home buyer, get your team gathered up and prepare yourself for an exciting time! Formulate your financial plan with your mortgage broker or financial adviser and determine what your comfortable budget looks like. Then line up all your important documents. Paying cash? You’ll need to prove where the cash is coming from and make sure you have enough for the purchase as well as enough for any taxes, insurance, inspections, attorney fees and broker fees. The most important thing you can do as a homebuyer when getting a loan is to provide all necessary documents to your bank early on and in their entirety. For example, your two most recent tax returns, bank statements and pay stubs. Haven’t filed taxes yet? Do yourself a favor and get those done! Depending on how complicated your taxes are, this can really hold up closing.
One Last Thought
It’s perfectly OK for you to inquire about the other party’s preparation if closing quickly is a priority for you. As a seller, don’t hesitate to ask about whether the lender has verified the buyer’s closing funds. As a buyer, consider asking whether the seller has unpaid taxes or an overdue mortgage balance. These things and more can cause the process to slow down.
Vienna Laurendi is a New York State Associate Real Estate Broker affiliated with Howard Hanna WNY Inc’s Laurendi Home Selling Team on Grand Island. She also is an executive director for the Buffalo Niagara Association of REALTORS. You can email your real estate questions to her at [email protected] or call/text her at 716-4-Vienna (716-484-3662).
This article is an opinion piece and was not written with the support of A.I.