Home sellers in Riverside still need to carefully analyse bids – beyond the money amount – and reject some even in today’s seller’s market with little inventory and high demand. Others genuinely aren’t qualified purchasers, others are just too picky and have unreasonable expectations, and yet others include things in their offer that are grounds for rejection. Here are three warning signs that Riverside property sellers should be on the lookout for to assist you.
1. Lack of Pre-approval and Too Little Earnest Money
One significant warning sign that Riverside house sellers must watch out for is a buyer who is either unqualified, unreliable, or simply a lousy bet. The two main signs of this are a lack of pre-approval and a proposal for an earnest money deposit that is excessively low.
Most serious buyers will obtain a mortgage pre-approval before they even start looking for a home. One of the best methods for buyers to demonstrate to sellers that they will be able to qualify for a mortgage at the end of escrow is to obtain a pre-approval. However, if a buyer isn’t pre-approved, you have no way of knowing if they will be able to secure finance for the transaction. A clear warning sign is an offer that isn’t accompanied by a pre-approval letter.
Here is the guidance given by industry professionals to home sellers in Riverside on this issue. “As the seller, it’s likely that you have an offer amount in mind that you’d like the purchaser to match or beat. No matter what figures are bandied around in an offer, a buyer must nevertheless demonstrate that he has the money to pay for the item. A pre-approval letter on the letterhead of the buyer’s lender should always be included in an offer if the buyer plans to obtain a mortgage.
An earnest money deposit that is simply too tiny is a warning sign for home sellers in Riverside (or really anywhere else for that matter). When an offer is accepted, earnest money is deposited as a security deposit for the seller. The seller may keep the earnest money as compensation for having to go through the entire selling procedure again if the buyer cancels without good reason.
A tiny earnest money deposit is probably a sign that the buyer isn’t seriously considering the acquisition or isn’t financially prepared to do it. Contact a Riverside agent at 951-476-3231 to find out more about what a proper earnest money deposit should be (one that isn’t a red flag).
2. Too Many Contingencies
Another glaring red flag for home sellers in Riverside is an offer with too many contingencies.
“Contingencies in real estate are requirements put forth by buyers that must be satisfied in order for the deal to proceed. For instance, a lot of purchasers will want the inspection contingency in the purchase agreement. This implies that the buyer will require some time for your home’s inspection. Additionally, if any problems are discovered, a buyer might demand that you fix them before the deal can be finalized.”
Such contingencies are common and to be expected. Cut when you see too many of them in an offer, that’s a red flag. “Every time a contingency isn’t met, the buyer has the option to back out of the deal and keep his earnest money deposit. Of course, from a seller’s perspective, the less opportunities the buyer has to back out of the deal, the better. In light of this, you should pick the deal with the fewest conditions from the beginning. The offer you choose should have as few conditions as possible, exactly like the sale price.”
But it takes expertise and experience to recognize when to turn down an offer because it has too many conditions. So once more, it would be wise to speak with a Riverside representative at 951-476-3231 about this.
3. Slow Response/Contract Errors and an Unworkable Closing Timeline
The contract will typically be passed back and forth between the buyer and seller multiple times during the negotiation process. Red flags for property sellers include flaws in the contract as well as slow responses and delays on the buyer’s end. These two factors alone or together might make the selling process more challenging and drawn out.
In addition, an unworkable or less-than-optimal closing timeline can be a red flag for home sellers in Riverside.
You should, industry experts say, “Think about the best time to go to the negotiating table. Particularly if you’ve lived in the house you’re selling for a time, moving out requires a lot of labour. To that end, you’ll want to be sure that the offer you select has a closing date that meets your requirements. Everything is based on timing. Many sellers want a quick closing, but some need more time to move. If the timing is better for them in that instance, even a reduced sale price offer can be more appealing.”
Red-Flag Assistance for Home Sellers in Riverside
These are undoubtedly some of the most significant warning signs that property sellers should be on the lookout for, but there are a great deal more. A knowledgeable local agent can help you spot further warning signs and prevent you from choosing a bad offer. In that case, be sure to get in touch with us right away at 951-476-3231 if you’re one of the Riverside home sellers who wants to make a prudent decision.