A home can check off all the things a potential buyer could want…then the dreaded deal breaker. Learn more about the top deal breakers for Home Buyers, how to avoid them, and a surprising alternative.
Buying or selling a home can be a complex process. A home is one of the most expensive purchases most people will make in their lifetime. Add that to the fact they usually sign a 30-year loan to make the purchase, and buyers can be very particular. Seasoned real estate agents will tell you that an offer is just the first step in a home sale, many deals fall apart before the second deposit, and it’s back to the beginning!
Whether the deal-breaker takes place after the first showing, or once the offer has been made, buyers move on from home at various stages in their home buying process. These are the top 3 deal breakers for home buyers.
#1 The Inspection Reveals Expensive Fixes Now or Down the Road
A damaged roof, and aging HVAC system, or a failing water heater are just a few of the expensive fixes that an inspection can reveal. Whether these items need to be replaced immediately, or 1-5 years down the road, they can be deal-breakers for many home buyers. To avoid this deal-breaker be educated about the age and condition of the major systems in your home. If you price your home accordingly and are upfront about the age of the systems, you can avoid surprising potential buyers.
#2 The Home Doesn’t Appraise
The deal-breaker comes after the offer has been made and accepted. Most offers have a clause, “condition on the appraisal.” What this means is the offer, and the signed contract is only valid if a professional appraiser values the home at the contract price. If the home doesn’t appraise for the contract value, the buyer has the option to back out with no penalty. To avoid this deal-breaker, you can get an appraisal before listing and use that price, not market speculations, as your listing price.
#3 HOA Fees Blow the Budget
When shopping for a home, most prospective buyers focus on the list price. They calculate their down payment and monthly mortgage payments based on that number. Homeowners association fees can add hundreds of dollars to the monthly expenses and are often buried at the bottom of listing descriptions. If your home is in an HOA and you want to ensure that it isn’t a deal-breaker, be sure to clearly list the dues in your listing advertisement. This will help you avoid attracting buyers where the HOA fee won’t fit into their budget. The only way to avoid this deal-breaker is to be upfront about the cost.
Alternatives to Selling Your Home with Deal Breakers
If you are worried that your home has any of these potential deal breakers, consider leasing with a professional property management company. Renting out your home will allow you to collect positive monthly cash flow to go towards home improvements or your high HOA fees. If you live in an area where the rental market is recovering faster than the real estate sales market, consider renting until the market heats back up and you know your home will appraise.
Consider Precision Realty & Management
If the thought of renting your home is overwhelming, consider a professional property management company like Precision Realty. If you aren’t ready to put your home up for sale or have had several deals fall through, call 281-866-7400 and let Precision Realty & Management LLC help you find a quality tenant and discover positive cash flow.