Selling a Home? 4 Warning Signs about the Potential Buyer
Selling a home can be very nerve-wracking, so you may be tempted to take the first offer that comes along. Be careful! Potential buyers can be problematic if you don't know what to look for. Not all offers are created equal, so if you jump at one too soon, you could end up breaking the law, tying up the sale of your home, or seeing your home sale fall through.
Here are some signs of potential trouble when looking at offers on your home:
The buyer requests a cash-back-at-closing deal. Here, the buyer offers you more than the home is worth if you agree to kick back the extra money at closing. This practice is fraudulent and can land you in jail.
The buyer isn't pre-approved for a mortgage loan. This person can tie up your home, preventing you from considering better offers.
The buyer offers no or very little earnest money deposit (EMD). The lower the EMD, the more likely the deal will fall through.
The buyer makes the purchase agreement contingent on the sale of his home. For your home to sell, several other transactions must occur first. This is known as the domino effect, and you should avoid it, if possible. This type of contingency ties up the sale of your house with no guarantee that the interested parties will ever actually go through with the deal.