If you’re selling your home, there are going to be difficulties at some
point in the transaction. Some problems can’t be fixed. It’s important
to figure out whether yours are fixable or not. Then you can either fix
them or move on and find another buyer. If it’s priced appropriately,
there’s a buyer out there for virtually every property.
Title Problems
You get a call from the person searching the title to your property
saying your first cousin once removed is shown as having a ten percent
interest in the property. I hope you (and not just your lender) have
title insurance.
If you don’t, perhaps your cousin will sign a “quit claim deed” (or
whatever similar term your jurisdiction uses) if her father was paid
for his interest long ago, but nothing was recorded to that effect with
the land records. If that doesn’t work, perhaps your cousin will agree
to join in the sale and receive ten percent of the proceeds.
Failing that, you’re probably looking at a court proceeding. The sale
will fall apart, and you’ll have to start all over again once the
problem of legal ownership has been resolved. Bummer. Before you put a
property on the market, make sure your title is clear.
Lender Objections
Lenders can really punch holes in a home sale. Let’s look at a few examples.
Example One
The lender calls and says your garden shed is encroaching on your
neighbor’s property, while their fence is on yours. The lender won’t
fund the buyer’s loan until everything is moved to where it belongs.
Typically, the lender isn’t going to back down. What are your options?
If you get along with your neighbor and can do the work yourself (or
can afford to have it done), the problem can be quickly cured. I once
saw a very creative resolution to this problem. The shed was on a
utility right-of-way. The seller got the county to write a letter to
the lender saying that if a shed weren’t on a poured foundation (it
wasn’t) and could be moved on notice, then it wasn’t considered an
encroachment until/unless such a notice was sent.
Example Two
The lender says your property will appraise for the amount needed for
the loan so long as the following repairs are made. The list of repairs
upsets you. Time to take a deep breath and think. How can you get them
taken care of before settlement? Can you do them? Have them done? Would
the buyer be willing to help out? Is this a deal to walk away from?
Regardless of the answer, the key is to make a logical decision not an
emotional one.
Example Three
The lender’s appraiser comes in with an appraisal that is below your
agreed sales price. The lender is willing to lend based on the
appraisal, not the previously agreed price.
There are several options for fixing this problem.
1. You can reduce your price to the appraisal price.
2. If the buyer wants your property enough and has enough money, he can
pay a larger down payment and leave the purchase price the same.
3. The two of you can split the difference; you come down some, and he increases his down payment some.
4. Or, sadly, the deal can fall apart over this issue.
The real key to successfully dealing with problems is to stay calm,
open minded, flexible, bottom line oriented, and think win/win. Most of
the problems that occur do have solutions. We just need to look for
them persistently.
