What you don’t know about disclosures

Most states have laws that require home sellers to disclose what they know about the operating and environmental condition of their homes as well as any situation or encumbrance that may affect the home’s value.

Disclosure Statement

If a shower pan leaked on the floors, and was repaired, that must be disclosed to the buyer, even if there are no outward signs that there was ever a problem. A disclosure form is called a Real Estate Disclosure Statement, Property Condition Disclosure, or Condition Report. They are required by the federal government to disclose the presence of lead paint, and many states require seller disclosures with regard to radon, gas believed to cause cancer.

“As Is”
Some states allow sellers to disclaim disclosures to make an “as is” sale, which means the seller has no intention of guaranteeing the property, but they must do so in writing. Even then they must disclose any material defects they know of. Such forms say something to the effect of “the owner of the real property makes no representations or warranties as
to the condition of the property and the purchaser will be receiving the property as is with all defects which may exist”. Even then, the seller must fill out a federal and/or state-mandated disclosure form.

While the forms may ask sellers to disclose whether or not they know there is lead paint or radon present, sellers aren’t usually required to do tests to determine the presence of toxic chemicals. But if the seller notes the existence of a problem, he or she may need to provide proof of tests and/or remediation for any problem that has been disclosed, including fire and water damage.

If you are a seller, your real estate professional will provide you with the disclosure documents you’ll need to sell your home. It’s important to answer every question as truthfully as you can. Your real estate professional can not fill out the disclosure for you. If you’re in doubt about what to disclose, such as a repair, it’s best to err on the side of too much information than not enough. You don’t want to give the buyer any room for complaint after the closing. Sellers aren’t expected to know everything about theirhomes. Disclosure forms allow you to check the “I don’t know” box, but you should only do so if you truly don’t know the condition of a certain appliance or system. When you disclose a problem to the buyer that
has been fixed, be sure to provide a copy of receipts and invoices. The repairs should
correspond with the problem. Many agents provide a copy of the disclosure to interested buyers, so they can get an idea of the home’s condition before making an offer or having an inspection.

If you are a buyer, read the seller’s disclosure carefully and use common sense when you see that something has been flagged. Leaks often produce mold, so ask the seller if the area with the leak has been tested for mold. If a seller-disclosed problem hasn’t been fixed, you can either ask the seller to fix it, or offer a little less for the home. Keep in mind that sellers aren’t expected to disclose what should be obvious or discernible to you as the buyer. Use the disclosure as a guide for what to look at throughout the home. If one shower pan has been replaced, chances are the shower pan in the second bath will need to be replaced soon.

The best way to feel confident about the condition of your home is not to rely on the seller’s disclosure. Have the home inspected by a licensed professional home inspector. For a few hundred dollars and a few hours of your time, you can follow along and learn as much as possible about the condition of your purchase.

Find out what a home is worth fast & FREE – no cost, no obligation right here.

Think Like A Buyer

You’ve looked at your agent’s comparable market analysis, calculated how much you need out of selling your home, and have come up with an asking price, but before you sign on the dotted line think of how buyers will react. Based on how buyers typically choose homes, will they feel your home is really worth the asking price?

How Buyers Shop
Take the time to make your home more attractive. Buyers look at affordability first and foremost. Most are already preapproved by a lender and know exactly how much they have to spend. Whether it’s with their agents or online, buyers shop in price\ ranges – typically in $25,000 increments. With that in mind, it’s far better to price your home at $399,995 or
$424,900 than at $405,000. Your job is to make sure the buyer who is qualified to buy your home, will actually see it.

Next to pricing, buyers look at all available inventory and compare your home to others currently on the market. When home inventory is high, buyers have more room to negotiate terms. When fewer homes are available for sale, buyers are more likely to meet your terms. Buyer’s choices are then narrowed onto a short list, based on what they perceive to be the
best value – the best homes in the best condition, and in the best neighborhoods they can afford.

Determining Your Asking Price
It’s important when using comparables to determine your asking price that the homes are close in proximity, similar in size, and appearance to your home. You must also strongly consider current market conditions. As markets rise and fall, buyers can only negotiate based on current market values. This means, a buyer who wants a home in a particular neighborhood may choose one that’s in less than perfect condition if the price is right. Other buyers may opt to compromise location in order to get a larger home, or one in better condition. No matter the situation, buyers always choose the home that offers the best price, condition, and location for the money.

Just as you want the most money possible for your home, your buyer wants to pay the least amount of money. The buyer isn’t interested in how much you paid for the home, what you paid for upgrades, or how much money you need to make from the sale. They are only interested in whether or not they want those features and whether or not the home is worth the price you’re asking. Look at your home as critically as you can. Take the time to fix broken items and make your home more attractive with fresh paint, new carpet, and updated fixtures. You can’t change your home’s location, but you can change it’s condition and make your home more competitive for the price.

Vetting Buyers & Offers

Negotiation is a fine art and typically works best when both parties get what they want. For example, you may be willing to take less money for your home in exchange for an all-cash offer or a quicker closing. Your buyer may be willing to pay your asking price, but they may ask you to pay their closing costs. Buyers respond to price, location, and condition.

Before considering your buyer’s offer, make sure they’re a serious buyer. Ask your agent to provide proof that the buyer has been prequalified by a lender or has
other means to purchase your home such as a preapproval letter or letter of credit.
Once an offer is officially made, ask yourself, “is this reasonable”? If you’re uncertain, ask your agent to explain the offer. If the offer isn’t what you expected, your agent can explain why. For example, a nearby home may have recently sold for less than your asking price and your buyers feel you should sell for the same. Be prepared to defend your price by showcasing your home’s condition, updates, size, and other advantages.

A serious buyer will offer close to what you’re asking, but may have a few demands and contingencies. A buyer may ask you to reconsider an exclusion, such as a fine chandelier or custom piece of furniture, because of it’s decorative importance to the room. Based on the offer received, you will know if that’s a reasonable request.
Sometimes buyers find your home before they are ready to move. For example, a family may be
transferring from another state and need to find a home quickly. Common requests in scenarios like this are asking you to delay closing or rent back the home and charge you rent until they can move in. You can confirm this with their relocation company and decide if this is reasonable for you to allow. Special requests should be accompanied by a respectfully high offer price. Are the price and terms the buyer is offering reasonable, given your home’s position in the marketplace?

Buyers will only pay what they believe your home is worth. They respond exclusively to price, location, and condition. What you paid for the home or the equity you need out of it, aren’t relevant to the buyer. It’s simple, homes in top condition sell for the most money. If you’re not receiving the offers you’d like, then condition is likely affecting the price. Ask your agent which repairs and updates would increase your property value the most. After making those changes, then reconsider your price. You can also counter with a carpet allowance, offer to pay HOA fees, or offer some other concession that will please the buyer.

Your agent can’t tell you what to ask for your home or what you should accept, but he can tell you what you can do to improve your negotiating position. Keep in mind that your purchase offer is only binding when you agree to the buyer’s terms or the buyer agrees to your counteroffer. Every change you or the buyer makes means the other party can walk away from the deal entirely. Don’t lose your buyer over a minor sticking point. Keep your eye on the goal – selling your home.

Emotional Triggers For Home Buyers

Your five senses can take you back in time to a wonderful memory. Sights, sounds, and scents can remind you of long walks on the beach with your sweetheart, holidays with your family, or the best weekend you ever spent camping as a kid.

Are you ready to move into your new home? Buyers have memories they love, too. When they
buy a home, they are looking forward to creating new
memories. When you’re ready to show your home to a prospective buyer, try these few ideas to help stimulate your buyer’s senses:

Sights. Welcome your buyer with a freshly swept sidewalk, flowers in the garden and freshly trimmed bushes and trees. Keep your entry spotless and inviting; either by a new welcome mat, new fixtures on the door or shiny new hardware on the porch lights. Once your buyer is inside, let them see the bones of the home by keeping clutter, furniture and
accessories to a minimum.

Sounds. Turn the television off and put on soft,relaxing, or romantic music. Oil creaky doors so they don’t ruin the mood. In doing so, you are saying to your buyer “Slow down, Take your time. Look.”

Smells. Cooking aromas are intoxicating. Fresh-baked cookies may be trite, but they work. You can also put a slow cooker on the day your home is being shown, such as a stew with onions.

Fresh flowers canbe lovely especially if you add in eucalyptus stems or thin pine branches. Ensure that the cat box and dog bed are clean. Nothing smells better than clean, so put away the air freshener and scented candles. Make sure any added fragrances are pleasant and organic.

Touch. Make certain your house is so clean, that it invites buyers to touch. Put a sumptuous throw on the sofa. Pristine counter tops, sinks and other surfaces invite people to put their hands down. What we touch, we tend to want – if the touch is pleasant.

Taste. Whether it’s hot or cold outside, refreshments will make your buyer feel welcome. Put out a tray, small ice bucket, and glasses with a little pitcher of ice water, juice or whatever is appropriate for the season and the weather. A plate of cookies or covered crackers with a block of cheese and cheese slicer will help buyers keep up their energy. Best of all, it will help them linger in the kitchen – the most important room in the house to most buyers.

These suggestions will help put your buyer at ease and make them feel at home. More importantly, these steps will put your buyer in the mood to buy.

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