Sell My House Home Selling Smarts 5 — Questions and Answers
Question 1: What is 'forbearance' and how might it affect a seller?
- A type of home warranty offered to buyers
- A temporary pause on mortgage payments that may need to be repaid before or at closing (Correct answer)
- A property tax deferral program for seniors
- A discount offered by buyers who waive contingencies
Correct answer: A temporary pause on mortgage payments that may need to be repaid before or at closing
Mortgage forbearance allows homeowners to temporarily skip payments, but any deferred amounts typically become due at closing and reduce the seller's net proceeds.
Question 2: Which pricing strategy can generate multiple competing offers in a hot seller's market?
- Pricing significantly above recent comparable sales
- Pricing at or slightly below market value to attract many buyers quickly (Correct answer)
- Requiring buyers to sign non-disclosure agreements on the price
- Hiding the listing from the MLS for the first two weeks
Correct answer: Pricing at or slightly below market value to attract many buyers quickly
Pricing at or slightly below market value creates urgency and attracts multiple buyers, often resulting in a bidding war that drives the final price above asking.
Question 3: What is an 'escalation clause' in a buyer's offer?
- A clause that automatically increases the sale price every 30 days
- A provision that automatically raises the buyer's offer by a set increment above competing offers, up to a maximum price (Correct answer)
- A penalty clause if the seller backs out
- A clause requiring the seller to make all repairs before closing
Correct answer: A provision that automatically raises the buyer's offer by a set increment above competing offers, up to a maximum price
An escalation clause lets buyers automatically outbid competitors by a specified amount without submitting a new offer, up to their stated maximum price.
Question 4: What is a 'leaseback' (or rent-back) agreement in a home sale?
- The buyer renting out the home immediately after closing
- An arrangement where the seller remains in the home temporarily as a tenant after the sale closes (Correct answer)
- A seller financing arrangement replacing a traditional mortgage
- A contract to lease before the home is listed for sale
Correct answer: An arrangement where the seller remains in the home temporarily as a tenant after the sale closes
A leaseback lets sellers close the transaction and receive their proceeds while continuing to occupy the home temporarily, buying time to find and move into their next home.
Question 5: What is the purpose of a 'walkthrough' inspection typically conducted just before closing?
- To finalize the home's appraised value
- To verify the property's condition hasn't changed since the purchase agreement and agreed-upon repairs were completed (Correct answer)
- To allow the buyer's lender to inspect the collateral
- To give neighbors a chance to match the sale price
Correct answer: To verify the property's condition hasn't changed since the purchase agreement and agreed-upon repairs were completed
The final walkthrough lets buyers confirm the home is in the same or better condition as when the offer was made and that all negotiated repairs were completed.
Question 6: What does 'pending' status mean for a home listing?
- The home is available but the seller is reviewing offers
- A purchase contract has been signed but the sale has not yet closed (Correct answer)
- The listing has expired and the seller is re-evaluating
- The home has failed inspection and is being re-listed
Correct answer: A purchase contract has been signed but the sale has not yet closed
Pending status means the seller has accepted an offer and the home is under contract, though the sale is not yet complete and could still fall through.
Question 7: Which of the following is a legitimate reason a seller could keep a buyer's earnest money deposit?
- The seller received a higher offer after accepting the buyer's offer
- The buyer backed out of the contract without a valid contingency reason (Correct answer)
- The home failed to appraise at the purchase price
- The buyer's lender denied the loan during the financing contingency period
Correct answer: The buyer backed out of the contract without a valid contingency reason
Sellers can generally keep earnest money only when the buyer defaults by walking away without a contractual contingency to justify the exit.
Sell My House Home Selling Smarts 5
What is 'forbearance' and how might it affect a seller?