How To Really Run The Numbers When Reviewing Offers For Your New Jersey House

Reviewing Offers For Your

When you have to review numbers for an offer for you house in New Jersey, it’s important to know how to calculate these numbers. Nearly 40% of americans DON’T know who pays closing costs when selling a house, so it’s important to understand all the concepts!

So, the higher the offer the better right? Not always! There are many different numbers that you need to pay attention to when reviewing an offer for your New Jersey house. Below we will discuss some of the associated costs when selling a house in NJ.

Closing Costs

In a traditional sale with a realtor selling the house to a private buyer, the seller needs to pay for the realtor commission plus some additional costs like transfer tax, attorney fees, Certificate of Occupancy fees and any mortgage/liens due. While this varies by the transaction, you’ll want to budget at least 6% of sale price as closing costs to ensure you are covered. You don’t want to be surprised at the closing table, owing more than you had planned for.

Repairs

One of the costs that sellers usually don’t pay attention to, is the cost to repair the house if the inspection report comes back with a lot of issues. Remember that inspection is one of the usual contingency clauses in a real estate contract, and potential buyers can back out of the deal if the inspection report has a lot of issues. So it’s important that you do a pre-assessment of what are the most important items that you will have to fix before selling your house with a realtor. Spending money on a house you ultimately want to sell can be extremely frustrating, with a direct sale, you’ll be able to keep that cash in your pocket.

Other Contingencies

There are all kinds of contingencies a buyer might put in their contract. Having a contingency protects the buyer should something go wrong. If there is a problem with the property, they will be able to back out of the sale without any penalty. Some common contingencies include things like not being able to sell their current house in time. If their lender backs out of the deal. And if the inspection comes back with a significant number of repairs that need to be made.

Timeline

How fast will your buyer be able to close? As any property investor will tell you, the longer you hold on to a property, the more it will end up costing you. Holding costs can add up quickly, eating into your profits. While the property in on the market, you’ll have to continue paying for things such as homeowners insurance, property taxes, utility bills, possibly a mortgage, and routine maintenance on the property. You are responsible for these items up until the day of closing. If your house sits on the market for a while or if your sale falls through, you could find yourself stuck paying these costs for the next several months.

Risk

When reviewing offers you’ll want to calculate the risk involved in the sale. If your buyer is using financing, you’ll want to be prepared just in case things fall through. Often times, a lender will back out of the deal if a property appraises too low. Sales fall through every day, and you’ll want to be prepared if yours does too. If you’re working with a buyer who is using financing, make sure they are pre-approved, not just pre-qualified.

If you choose to sell to a cash buyer, your risk of things falling through drops significantly. Cash buyers will have the money ready to go before making an offer for your property. This will save you days or even weeks as opposed to dealing with lender requirements. When you sell directly, you won’t have to deal with appraisals, inspections, repairs, or any red-tape from a lender.

If you choose to work with a local {market_city] real estate agent, you’ll have to commit to a listing agreement. Once you have entered into this agreement, your agent will be entitled to their commission, or at least a part of it, no matter how the house sells. However, if you are able to find a reputable buyer such as Orange Sun Investments before hiring a New Jersey agent, you’ll be able to instantly save on commission costs. This can be upwards of 6% of the final sale price that you’ll be able to keep in your pocket. This could amount to thousands of dollars you will e able to use for your next property should you so desire.

Appliances and Fixtures

Sometimes when selling a house, the furniture, fixtures, and appliances will all come into play. Does your potential buyer want to keep any of these items or will you be taking everything with you? If you are leaving any items with the new buyers, you’ll want to factor in how much it will cost you to replace these items. Having to replace appliances, fixtures, and other items in your new home can cost a fortune. Make sure you are prepared for these replacement costs before accepting an offer for your New Jersey property.

We can help you know what to look for when reviewing offers for your New Jersey property. Get in touch with us today! 1-888-WE-BUY-NJ

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