Show #344 Airing Sunday, 6/4/06
If you don’t understand your contract, you might sell yourself short when selling your home. Here to offer tips on selling your home safely, and smartly, is Rachel Torchia from Gateway Title Agency.
Question: What do you mean by selling safely?
Answer: Selling safely means knowing what you are agreeing to in your purchase agreement. To do so, you must know what to look for in an offer to purchase, in addition to the sales price offer.
It means making sure you know all the terms. Beware of getting caught in a lending scam.
Question: What are some of the issues or scams that sellers might find themselves facing?
Answer: There are some mortgage brokers who will create an addendum to the purchase agreement asking the seller to "take back" a small mortgage of, say, $5,000 to $8,000. The buyer seldom pays the seller off in this situation. Most of the time, the buyer has been convinced to buy a property they really can't afford, they default on the mortgages, and the home goes into foreclosure. In other words, they're a victim of loan fraud.
Another item you must really understand before agreeing to is the idea of selling your home "as is." This is often stated in the purchase agreement, but what does that really mean if an inspection is ordered by the prospective buyer? Many times, you agree on a price taking into consideration the condition of the property and make concessions in the agreement. Then you find that, after the inspection, many more price reductions are requested. Is this something you can afford?
Question: Why are sellers falling prey to these tactics that really hurt them?
Answer: We find that many are selling homes due to economic circumstances. Maybe they did 100% financing when they bought their home or have interest-only loans, and now they owe more than the original mortgage. They may have lost their job and are behind on payments. They are desperate, and sign blindly without the advice of a disinterested expert, such as an attorney.
I have seen many contracts entered into blindly where the seller was unaware that they would actually have to bring thousands of dollars to the closing so that their mortgage would be paid off.
Question: What can sellers do if they find themselves eager to sell but wary of such scams?
Answer: They should talk to the holder of their current mortgage to see if a pay-off can be negotiated (it is not a title company's responsibility to negotiate a lower pay-off at closing).
They should call a title company and request that they go over the terms of the purchase agreement and give them realistic estimated charges and bottom-line figures.
We will be happy to give viewers estimated closing costs if they call us. We also offer free workshops and one-on-one consultations where we can go over the cost of selling in today's market.
Don't get caught in a home sale trap! Gateway Title will be happy to help you review your home sale options. And they offer free workshops on selling safely. Call the number that's next. My thanks to Rachel Torchia.
