Before You Put Your Home on the Market
Good Morning Relaxing Retirement Subscriber,
As each year passes, more and more Relaxing Retirement members approach me with a desire to downsize the large home they raised their children in, and to move to a more manageable situation.
This is especially true of members who spend their winters in warmer climates down South or out West.
Assuming for a moment that you’re able to find exactly what you want at a price you’re willing to pay (a more significant challenge than most anticipated), your next challenge is preparing your home to be sold.
While we’re currently in a seller’s market, a deal is not a deal until the closing and money changes hands.
And, prior to closing, virtually all buyers want their home inspector to go through your home for hours with a fine-tooth comb to determine if it really is as good as it looks on the outside.
What Could Go Wrong Now?
Let’s assume that you found what appeared to be the perfect buyer. They’re clearly excited and want to move in right away.
However, the pragmatic attorney they hired strongly suggests that they have an inspector put your home to the test first before they sign a Purchase and Sales Agreement (P&S) and make their 10% deposit.
On the night of the inspection, you receive a phone call from your realtor who explains that the inspection report revealed some issues that the buyers want resolved before signing a P&S.
This is sort of an emotional blow because you’ve taken such good care of your home and you’ve never experienced any problems.
The written inspection report revealed that you have a small sample of termites, a mold issue in your attic, and that your septic system doesn’t appear to be within code.
How could this be? You’ve had your pest control company out every year. And, how could your septic system be out of code?
This doesn’t sound good.
Unfortunately, it gets worse. The carpenter and pest control folks were able to deal with the termite issue, but it required replacing a support beam which turned into a major project because an entire ceiling had to be opened up to gain access to it.
Next came the “mold” issue. It turns out that you have a small sample of mold in your attic which necessitates that they inspect and run mold tests in every room of your home.
The results reveal that, although the problem is not severe, it requires three days’ worth of work in your home to rectify it, and you have to vacate your home while they do the work.
Can This Get Any Worse?
It was hard enough to arrive at a decision to sell your home. Now this!
Paying for all of this was certainly not in your plans, but that’s not the worst part.
As each new piece of information was revealed, the buyers began to question everything. At first, they were very anxious, and you could tell they really wanted the house.
But, as time went on, the exchanges became less friendly as their demands increased.
Not only did they want all of these issues rectified on your dime, but they also wanted to reduce their offer price.
Finally, after two days of back and forth negotiating, they withdrew their offer and walked away.
Now, you have to start all over again.
The Lesson and Strategy
What’s the lesson in all of this? And, how could it all have been avoided?
While there’s no way to avoid the issues that were discovered with your home, you can control who discovers them and when they’re discovered?
The solution is to hire your own independent home inspector prior to putting your home on the market.
What this allows you to do is discover and rectify any issues before showing your home with full confidence that everything is under control.
Yes, you would still have had to face the costs to rectify everything. But, it wouldn’t have killed the deal with your buyer, and your home would be sold which is your goal in the first place.
(This is exactly what Colleen and I did prior to selling our home in Chatham and moving to a new one. While it slowed the process down a little before hitting the market, we went into the transaction with complete confidence that we would not be hit with any surprises.)
Selling and purchasing a home is such an emotional experience. When purchasing, you want everything to be perfect. The reason you make an offer is the home appears to be exactly what you want.
When “issues” and “problems” keep popping up little by little, your confidence in your decision begins to erode, even though the problems get rectified.
It places seeds of doubt which, ultimately, kill the deal.
Don’t allow this to happen to you. Hire an independent home inspector prior to placing your home on the market.
Committed To Your Relaxing Retirement,
The Retirement Coach
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(The content of this letter does not constitute a tax opinion. Always consult with a competent tax professional service provider for advice on tax matters specific to your situation.)