When I go to a listing appointment—an appointment where I am trying to get the business of someone who is getting ready to sell a home—I go over the process of selling a home. Of course, each home is different, each negotiation is different but there are some basic facts that everyone must know before putting their home on the market.
Get your home ready to sell.
This means de cluttering, painting in and out if need be, staging it (with your furniture or furniture you can rent), making the yard look fabulous and basically—making your home shine. Don’t put your home on the market if you have a toilet paper holder that has broken and it is sitting—screws and all—on the floor next to the toilet. (True Story!)
Know the forms you need to sign before listing.
Before listing a home, you will be filling out a few forms. Your Realtor should send you these forms before your house actually goes on the market. You should get a couple to review—one called “How To Protect Yourself When Selling a Home.” You and your Realtor will also fill out a Listing Agreement together—basically protecting you both. The listing agreement sets the price for the home, sets how many days you agree to have it on the market with that Realtor’s firm, and spells out how you are to be represented by your Realtor and how much your Realtor makes on the transaction. A Realtor earns a commission based on the sales price of the home and receives that commission only after the transaction closes. This commission goes to both the seller’s Realtor and buyer’s Realtor—making the full commission in most cases 6%. The total commission is always paid by the seller at the settlement table, where the fee is subtracted from the proceeds of the home sale. This MUST be filled out for you (and your Realtor) to be protected before putting it on the market.
You will also want to fill out a Sellers Disclosure; a form that lets you share known additions or defects about your property as well as the age of major appliances including HVAC, hot water heater, etc. You will want to fill this out as truthfully as you can. You obviously do not want to say that your hot water heater is brand new if someone can see a date on it that says 1999. (True Story!) If your home was built before 1978, you will also fill out a “Lead Based Paint Exhibit” acknowledging that your home was built before lead based paint was no longer used in constructing single family homes. Having these forms ready from the get go makes it easier when you have an offer in less than 48 hours and the buyers want those disclosures ASAP!
Know how scheduling works.
If you live in the home, you will want to make sure that the Realtor who is showing your home gives you plenty of notice to show it. You can have your own Realtor coordinate calls or you can receive calls from each Realtor wanting to see the home and work directly with them on timing. I always ask in the private remarks of a listing that a Realtor give my clients ample notice—sometimes 24 hours if they have dogs or kids—so that the home can be spotless and ready for the visit. A reminder that there will always be a Realtor who calls you while sitting in your driveway asking if they can get in immediately. (True Story!)
The Steps Once You Receive an Offer
Let’s say you receive an offer within 8 hours of your home being listed. Boom. You and your Realtor have done everything right…how exciting! You will want to go over the offer together—making sure you look at how much you are being offered for your home, how much the buyer may want you to provide in closing costs, how long their due diligence is, when they want to close, what type of loan they are getting, and don’t EVER forget about the special stipulation page where there may be more stips in the agreement—like asking you for a termite bond or asking you to provide a home warranty or asking you to leave the cat painting above the fireplace. (Not a true story)
Your Realtor will want to make sure the buyers are pre-qualified and will certainly want to look at the bank they are using. (Many “big national banks” take much longer to close so always ask your Realtor for a good lender.) Anyhoo, there will probably be negotiations—unless they offered like 20 grand above asking (True Story!)—and hopefully you can come to an agreement in price. Once you are in a binding agreement, the true time line starts. During due diligence the buyer gets an inspection. You may be asked to renegotiate the terms of the agreement if things are found that need fixing. You then will wait during the financial contingency for the lender to approve the buyer. All of this takes between 20-25 days (unless your buyer is buying your home in cash…that is a much quicker closing.) As a seller, before closing, you will send all your mortgage info to the attorney to get your loan paid off at closing. After about 30-45 days, you will all be sitting at the closing table at an attorney’s office and drinking champagne, giving the buyer the keys to the home and eating cupcakes. (True Story)!