Home buyers today are suspicious. And they have ample reason to be suspicious. This will likely be the largest financial transaction they’ve ever undertaken.
They are worried that you, the seller, are hiding something from them.
They worry that your lot is smaller than you say it is or that there are fewer square feet in the house than you say there are. They worry that you are charging them more then the house is worth.
They worry that the physical structure of the house is near collapse. And they worry that the roof, furnace, plumbing and electrical systems are all unsafe and will need total replacement within six months. (That would explain why you are selling in the first place!)
They worry that your utility bills will be sky high, that your property tax bill will bankrupt them next year, and they worry that the house is uninsurable because it was constructed directly on top of an active volcano.
They worry that they won’t qualify for the loan they need, and they worry that won’t be able to pay for repairs needed in the next couple years, and that they will lose the house to foreclosure.
And if you think I’m wrong, you’ve never worked with a home buyer. And yes, I have - many times.
All of the above are valid concerns that the buyer will have concerning every house they see, and they will want to see plenty.
What I am about to suggest won’t make the wrong house right, but it can give your house a competitive edge over another house if the buyer is choosing between two different homes and they want to make sure they make the right decision.
Building confidence
If you want to build confidence in the mind (and heart) of your prospective buyer, provide them with the following items, in writing, in the form of a “home buyer’s information package.”
1. The top page should be a one page flier with a color photo of the house, preferably showing flowers in bloom, and listing the features of your house along with your contact information.
2. Next is a photocopy of the survey that was performed when the house was built. If you can’t find one, call the county planning department and see if they can shoot you a copy of the county subdivision survey showing boundaries and corners.
3. Next, let’s solve the value dilemma. Once your house looks its best, go ahead and pay for a professional appraisal. Yes, it will cost you maybe five hundred bucks, but then you can say to the prospect “We didn’t know what the house was worth, so we had it appraised. We just didn’t think it was fair to ask more than the house is worth. And we’ve decided to not accept less.”
How can anyone be more fair than that? And if the appraisal comes back lower than you expected, you can tear it up and seek another appraiser. After a while, if they are all the same, you’ll come to learn what the house is truly worth.
4. Now as to condition. Once your home looks good inside and out, hire a home inspector. Make sure you hire one that will deliver to you a comprehensive checklist IN WRITING, so you can add it to your information package.
It the inspector finds anything that needs repair, go ahead and have it done, then attach receipts to show that the repairs have been completed.
Then you can honestly say: We didn’t really know what might be wrong with the house, so we had it inspected. We wanted to get the house in first-rate condition before we put it on the market. Here are the things the inspector said needed to be done, and we have done all of them. Include a statement from the inspector that all the repairs have been completed satisfactorily.
5. Next in your package are photocopies of your property tax bill, your last twelve utilities bills, so the buyer has some idea of what the utility bills will be.
6. Also, your buyer is worried that there may not be any happy residents in this neighborhood, so make sure you include a copy of the monthly newsletter. And if there is not one, start one.
Two numbers
7. Concerning the loan, your buyer is worried about two numbers. The first is typical down payment, and the second is a fear of high monthly payments. So ask your local mortgage lender for a LENDER’s PRO FORMA worksheet showing a typical down payment and a breakout of the loan payment showing projected principal, interest, taxes and insurance if they buy at appraised price.
8 Last, but not least, provide them with a copy of the declaration page of the Home Buyers Warranty you are buying for them. Then you can honestly say: “we wanted to make sure nothing needed a repair in the first year, and now you’ll be covered.”
I recommend binding all of these items into a three ring binder and giving each prospect a copy as they walk in the front door.
The primary purpose of going to all this trouble is to set the buyer’s mind at ease, and make them less suspicious of you and more confident in the wisdom of buying your house, as opposed to another one.
As I mentioned, the disclosure of all this information won’t make the wrong house the right choice, but it can tip the scales slightly in your favor.
In many home selling decisions, that’s all it takes to make a sale!
Native Atlantan John Adams is a real estate broker, investor, and author. He answers real estate questions every Sunday at 3 pm on WGKA-am(920). He welcomes your comments at Money99.com, where you will find an expanded version of this column.
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