The buyer has signed the sales contract and you feel like it is a done deal. You might think you can sit back and relax now, but that is the last thing you should be doing with your for sale by owner property. The buyer can still back out.
Some buyers get cold feet at this point and are unsure if this is really what they want. They might also have seen other homes for sale by owners for less than what you are asking. You can’t sit back now, you need to take some steps to make sure this buyer stays with you and doesn’t back out of the deal.
After the sales contract has been signed, the lender will have an appraisal done. This is to ensure that the buyer isn’t asking for more money than the home is worth. If the home is appraised for less than the selling price, the lender will refuse the loan and the deal is off. To avoid hassles like this, have an appraisal done before you set your price, or talk to your neighbors and price your home to compare with similar homes in your neighborhood.
The lender may also have your land surveyed to establish the boundary lines. Most of the time, this is not much of a problem. However, there are times when property lines change due to changes in the way a creek or river flows. If your property has not been surveyed in the last 50 years or has been subdivided, this is cause for you to pay careful attention to the appraisal. The buyer might decide to have some inspections done on his own. Per the sales contract he can have termite, roof and a general inspection done at his own cost. As the seller, you can get your own inspections done. This is not necessary, but can be helpful if the buyer finds something wrong. Your best bet is to make sure all problems are spotted and taken care of before this time, or get them taken care of so your buyer does not back out.
During this final process, you should notify your lender and ask for a statement of the balance of your mortgage and let them know you will be paying it off. Collect all those appliance instruction books and warranty information you tucked away for safe keeping and give them to the buyer. When you do know the closing date, notify your service providers – electric, water, cable, trash, and your phone (if you still have a land line) – and let them know when to turn off service for your final billing date. For sale by owner closing dates are usually 30 to 45 days from the date that the sales contract was signed.
Depending on which state you live in, your real estate attorney may handle the closing, or the lender’s attorney will handle it with your attorney acting as your representative. At the final closing, the settlement statement is reviewed. The settlement statement details all the monies received. They include:
The lender’s check for the mortgage amount. The buyer’s down payment and the buyer’s earnest money deposit.
The settlement statement also includes money that is paid out: The balance on the seller’s current mortgage, real estate fees (if applicable),the closing costs and the amount you get to keep. That’s it. The title is then transferred to the buyer and the for sale by owner process is complete. Now you can finally sit back and relax.
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