Home sellers could pay more to close a sale - KTTC Rochester, Austin, Mason City News, Weather and Sports

Home sellers could pay more to close a sale

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ROCHESTER Minn. (KTTC) -- As home sales increase, you may be thinking about putting your home on the market.

But you may not realize that some sellers have to pay out of pocket--up to tens of thousands of dollars--to get the sale to close--even after finding a buyer.

When you're selling your home, the last thing you want is to dig into your savings at closing to make the deal go through, but that can and does happen to some Rochester sellers.

After a buyer and a seller agree on a price, the bank orders an appraisal on a property to make sure they aren't lending the buyer more money than the house is worth.

If the appraisal is lower than the agreed price, someone has to make up the difference.

Buyers and sellers have some options if they still want the sale to go through, the buyer can come up with extra cash to cover the amount the bank won't, the buyer and seller can share the cost or the seller can bring a check to closing to cover the difference.

Rochester real estate Broker Duane Sauke says this happens most often when home prices are rising in an area. Since appraisers find the value by looking at similar homes that sold three to six months ago, the appraisal might not be caught up to current market.

To avoid this, Sauke says sellers need to be tuned into the local housing market when pricing their home -- especially if its over $150,000.

Sauke says another way to avoid this problem is to keep from including other items like luxury appliances or expensive lawnmowers in the purchase price because they will not be counted in the appraisal

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