If you think a home marked “sale pending” is off-limits, think again. Yes, this label means that the buyer and seller have negotiated an accepted purchase contract, but things happen—and sales can fall through. For that reason, there’s no harm in making a backup offer.
“If a buyer is in love with a particular home that happens to be pending, why not give it a shot?” asks John Lazenby, president of the Orlando Regional Realtor® Association.
So don’t let go of that dream house just yet. Here’s what you need to know on making a backup offer If the original deal falls through and you’re next in line—you could end up nabbing the home you were pining for all along. Sweet!
Why would a pending home sale fall through?
Even after all the work that a buyer and seller went through to create the contract, sales can still fall through.
“The contract often contains contingencies that can kill a transaction if they’re not met,” says Lazenby. Common examples are contingencies related to the following:
- Inspections: A sagging foundation, leaking roof, or other big-ticket repair items could kill the deal.
- Appraisal: If a home is appraised under the sale price, the financing can fall through if the buyer isn’t able to make up the difference.
- Buyer’s loan approval: If a potential buyer is only pre-qualified, rather than pre-approved, the financing might not materialize.
Another common reason is a bit simpler: buyer’s remorse. Maybe an expected promotion didn’t come through or the buyer decided she didn’t like the open-plan kitchen after all. Truth be told, there are a million reasons buyers get cold feet and change their minds.
Reasons to make a backup offer
Some potential buyers are in a better position than others to wait it out. If you relate to one of these conditions, making a backup offer is a good idea:
- You’re not under a time constraint—such as the desire to be settled before the start of the school year. “If a buyer is in a hurry, it might not be feasible to wait a month or longer to see if the initial contract falls through,” Lazenby points out.
- Inventory is particularly tight, and there’s nothing else in your price range that’s tempting. Sometimes it’s best to wait and see on the house you love, rather than jump on something else that isn’t quite right.
- The listing agent is able to give you some intel about the house that leads you to believe the other buyers might get cold feet or that there are contingencies.
- It’s a short-sale transaction, which Lazenby says is much more likely to collapse than a regular transaction. Often the bank, or whoever holds the mortgage, will find the price too low and will demand the seller put it back on the market to achieve a fair price.
How to make a winning backup offer
If you and your agent decide to put together a backup offer, here are a few touches that can help turn the tables in your favor:
- Money talks. Present a clean offer, complete with mortgage pre-approval and proof of funds. If you are able to, offer over asking price.
- Be flexible. Are you willing to give them extra time to enjoy the holidays in their home, or forgo minor repairs that others might insist on? Some sellers might appreciate benefits other than cold, hard cash.
- Write a letter. You never know when a personal touch might resonate with the sellers. Tell them how much you’re looking forward to raising a family in their family home or entertaining in their amazing dining room.
- Stay visible. You want the sellers’ agent to know you’re ready to move when they are. Have your agent be in frequent touch to ensure you are on their radar should anything change.
The bottom line: Never say never when a sale is pending. With a little determination and luck, that house could be yours.
No matter how great a home looks at first glance, a host of problems could be hiding right under that fresh coat of paint—which is why buyers will want to scrutinize certain paperwork they’ll receive called property disclosure statements.
Property disclosure statements essentially outline any flaws that the home sellers (and their real estate agents) are aware of that could negatively affect the home’s value. These statements are required by law in most areas of the country so buyers can know a property’s good and bad points before they close the deal. Here’s what all buyers need to know about real estate disclosures.
When do buyers receive property disclosure statements?
While it varies by area, most buyers will receive property disclosure statements after their offer has been accepted, says Atlanta Realtor® Bill Golden. That way, buyers can review this paperwork at about the same time that they typically hire a home inspector to check the property for any defects. In fact, disclosure statements can help point your inspector toward areas of a home you’d like to home in on, so try to read your disclosure statements before scheduling the inspection.
In certain areas, sellers might even hand buyers disclosure statements before an offer is made. But no matter what, it should be early enough to give buyers time to do their due diligence and spot problems that could make them reconsider whether this home is right for them.
What types of flaws must be disclosed?
Sellers are required to complete a variety of disclosure documents, which are often in the form of a government-issued checklist where they mark whether their home has (or once had) a variety of problems such as the following:
- Windows that don’t close or doors that stick
- Faulty foundation or leaky roof
- Problems with appliances or home systems like the HVAC
- Repairs made on any of the above as well as insurance claims
- Renovations completed without a permit
- Pest or mold infestations
- Environmental hazards in the area (e.g., floods and wildfires)
The federal government requires certain disclosures anywhere in the U.S., like the existence of lead-based paint, asbestos, or other clear health and safety risks. However, states and counties also have their own particular laws on which issues must be disclosed. For instance, some states require sellers to disclose nearby sexual offenders, while others do not. Some require a death on the property to be disclosed, especially if it was a murder, while others leave you to do that kind of sleuthing yourself.
If buyers (and their real estate agent) read a disclosure document and see nothing to worry about, they sign off on it before moving one step closer to sealing the deal. If, on the other hand, buyers spot something worrisome, it’s in their interests to delve further.
What to do if a disclosure reveals something bad
If you spot something on a disclosure statement that you don’t understand or that raises concerns, have your real estate agent bring it up with the sellers (or their listing agent). In some cases, they might have an explanation that puts you at ease (i.e., “we had bedbugs back in 2012 but hired an exterminator and have been free and clear ever since”). Or, if the issue makes you seriously question whether you want to move forward, this could be an opportunity to renegotiate the sales price to compensate for the added risk you’re taking on buying this home.
At worst, you can always back out of the deal without penalty—meaning you won’t have to forfeit your earnest money deposit. And if you happen to find a problem that should have been disclosed but wasn’t, that’s all the more reason to consider carefully whether you want to move forward. After all, if sellers covered one thing up, what else could they be hiding?
However, keep in mind that the sellers are required to reveal only all known problems. That’s key. Sellers aren’t typically held responsible for problems they aren’t aware of. And that’s just one more reason why buyers absolutely should get a home inspection to root out any potential problems themselves.
But all in all, smart sellers inform buyers of everything they need to know upfront. While property disclosures exist mainly to protect the buyer from getting a lemon, this paperwork protects the seller, too.
“If sellers disclose everything they know about the house, a buyer can’t come back to them later saying they weren’t told about an issue,” says Golden.
Property disclosure statements save everyone time, hassle, and expense by preventing deals from falling apart—and that benefits both buyers and sellers.
You’ve heard it before: Turning off the lights, closing the windows, and not taking 40-minute showers are all little ways to save energy in your home. But what if there was a way to determine which energy-saving solutions will pay off based on the configuration of your house? Say hello to the energy audit, a home assessment that can help you go green and lower your energy bills by potentially thousands of dollars. So what’s an energy audit, really? It tells you how energy-efficient your house is and offers home improvement recommendations to take your efficiency to the next level.
How a home energy audit can help buyers
While energy audit information is typically not included on home listings alongside the number of bedrooms and square footage, it can often be found in the multiple listing service, which has more specific details. Only licensed real estate agents can view the MLS, so you’ll want to ask your agent (or the seller’s) if an energy audit was performed. If not, you can request one during the home inspection.
The energy audit information will offer more insight into your home’s true energy potential than a review of past utility bills. That’s because the energy audit will tell you how the home is built, not how the home is used. Someone who perpetually cranks up the heat or leaves the lights on might have a high energy bill, even if the house itself is relatively energy-efficient.
“For owners and sellers, having an energy assessment done can be a powerful selling tool—or a wake-up call if it comes back low,” says Welmoed Sisson, a home inspector with Inspections by Bob in Boyds, MD.
The Home Energy Score
Home energy audits can be provided by various institutions (e.g., local utility companies) and go by different names. However, the one rating that is gaining the most traction is the Department of Energy’s Home Energy Score. It’s important to note that not all energy audits will give you an HES.
The HES measurements provide a standardized process for calculating a home’s efficiency, thus allowing two homes to be compared side by side, even if they are different ages or styles, or in different locations. All assessments take into account the local climate, too.
“The HES was developed to give buyers an easy measurement they can think of, like a car’s mpg rating,” says Sisson. “It’s a way to objectively compare a home’s energy use with others, knowing that the same standards were used to assess all the properties that have been scored.”
Other types of energy audits
The efficiency audits offered by other sources (e.g., utility companies) typically don’t involve specific measurements. Instead, they rely on visual inspections to see whether windows are double-glazed or if energy-efficient lightbulbs are in use, for example. The recommendations they offer are more general.
How much does an energy audit cost?
Depending on the size of the home, an energy audit can cost between $150 and $250, although some assessors may charge less if it’s included as part of a regular home inspection. Many home inspectors offer the service. If you want to get your home’s HES from someone who has been certified by the DOE, consult this database.
What the energy auditor looks for
An energy audit takes about one to two hours.
Using a tape measure, the assessor will measure the windows, floor space, and insulation. The assessor also records the type and age of heating or cooling appliances and water heaters, and notes the condition of the ductwork. These findings are then entered into a database to calculate the overall score for the home.
Homeowners will receive a report with a score on a 1-to-10 scale—with 10 representing a home among the top 10% in energy efficiency; 5 representing the performance of the average home; and 1 indicating a home that consumes more energy than 85% of U.S. homes.
The report also includes a set of recommendations tailored to the home, starting with the least expensive improvements that will yield the most return.
“Spoiler alert,” says Sisson. “It’s almost always ‘add more insulation.’”
The report offers an estimate of the savings you’ll enjoy after completing all the recommended improvements. For example, if you moved your home’s score from a 3 to a 7, you could save about $575 a year. On the recommendations page, the savings are broken out by improvement. While some pay off within a year or two, the DOE says that all recommended energy improvements will generally pay you back in 10 years or less. Score!
Home decor is all about reflecting your own personal style. It’s an opportunity to use your home as a blank canvas and paint a masterpiece that is decidedly you. And that style is never more apparent than in your living room—the spot where your guests gather and your personality is most on display.
We’ll never tell you to betray your decor desires in this room (or the rest of your home). But if you’ve gone nuts painting your living room in wild colors or spent thousands laying down Moroccan tile, bear in mind how potential buyers might perceive your choices.
Buyers need to picture themselves living and loving that space: throwing parties, entertaining guests, enjoying a lazy Saturday with a book. If your favorite living room design looks are dated or divisive, buyers might give your home a pass. So ditch these seven polarizing decor choices while you still can—before they sink your chance of a sale.
1. TV looming over the fireplace
“Today’s buyers are interested in beautiful, serene rooms with seating revolved around a focal point of beauty,” says Chicago interior designer and stager Kara O’Connor. A personality-free black box is neither serene nor beautiful.
Heads up: If you’ve already mounted your television on a wall or over the fireplace, you may have to remove the evidence after you take it down. No buyer wants to see unpatched holes in your walls.
2. Dead things
Obviously you’re not leaving dead mice lying around your living room (we hope!). Perhaps you should get rid of the enormous steer head hanging over your fireplace, too.
“We totally get it. Cowhides and taxidermy are super kitschy and trendy,” says Justin M. Riordan, a Portland designer with Spade and Archer Design Agency. “The combination of creepy and beautiful is all the rage. Unfortunately, for many, the creepy is far more powerful than the beautiful.”
Real or not, you don’t have to say goodbye to your animal skulls. Just tuck them away until the home is sold. Far away.
3. Blond wood
Don’t stain your hardwood just because you’re listing your home, but if you’re thinking about doing it anyway, O’Connor has some advice: Go dark.
“Dark, wide-plank floors are ‘in,’ and blond wood is ‘out,’” she says. “If the floors are dated, I encourage refinishing. The impact is huge.”
Alongside new baseboards and neutral paint, deep chocolate floors will give your home the modern edge that could attract on-the-fence buyers.
4. Saturated walls
Yes, your deep teal walls look rad alongside your dark wood credenza and velvet chaise. But all potential buyers see are dollar signs.
“More likely than not, your home’s next owner has some very distinct taste in furniture, which they recently spent quite a bit of money on,” Riordan says. “They are not going to buy new furniture to match your saturated wall colors.”
Many buyers do repaint before moving in, but painting over saturated tones requires more coats, more time, and, naturally, more money. And some buyers don’t want to deal with any of that.
To get the highest selling price—and the most interested buyers—paint the entire place in simple neutrals.
5. Outdated furniture
Buyers bring their own furniture. But picturing their gorgeous modern furniture in your space can be daunting if everything you own is outdated and overwhelming.
“If the furniture distracts the buyer from the square footage, a focal point, or hardwood floors, then it should be carefully edited out,” says Jill Hosking-Cartland, an interior designer in Windham, NH.
Not only might they struggle to see themselves in your place, they might also worry about the quality of your home.
“Old furniture can leave a buyer with the impression that there is a lack of attention to routine maintenance and updating,” Hosking-Cartland says.
Work with your Realtor® to stage your property using updated, on-trend furniture.
6. Narrow baseboards
New baseboards and crown molding can take a room from blah to bangin’ with an afternoon’s worth of work. But make sure the sizes and designs you choose look modern.
“Crisp, white baseboards that are a minimum of 5 inches high are preferable to the dated, 2- or 3-inch baseboards from the ’90s and early 2000s,” O’Connor says.
Teeny-tiny baseboards might not be a deal breaker, but they can make a room feel kind of off. Beware of going too big—though it is possible to overwhelm a room with your molding. Find the right size trim for your space before you embark on that weekend project.
7. Faux finishes
You might hate ordinary paint, but funking up your living space with a faux finish can be a sticking point. Even if your DIY job looks amazing, buyers see only another thing they need to change. Paint over your fake Venetian plaster, reclaimed wood, or “textured” walls before the first showing.
“Asking a buyer to adopt your specific design style is risky,” Hosking-Cartland says. “Most buyers see these polarizing design elements as work they will have to do and spend money on to make the home a reflection of their own personal style.”