It would be great if closing a real estate transaction was like buying a new bike or TV, just cruise through the aisles, pick your favorite model and head for the register. But this just isn’t the case. Real estate transactions are complex and involve as many as twenty diﬀerent players including real estate brokers, buyers, sellers, attorneys, inspectors, appraisers, lenders, and often contractors. Because of this, even the simplest transaction today typically takes between 30 and 45 days to close.
Here’s an overview of how the process will typically work once an interested buyer has submitted an oﬀer.
Dealing with Oﬀers
When a buyer or a buyer’s agent makes a formal oﬀer we will review the oﬀer in its entirety together. It will include the oﬀer price, as well as the terms and conditions of the oﬀer.
Oﬀers will come on a legal form, and if accepted, you will be entering into a legal contract with the buyer. (Keep in mind that there are still lots of ways ‘out’ for both you and the buyer at this point.)
When we evaluate oﬀers we’ll of course consider the oﬀer price, but we also need to review:
All of the terms and conditions of the oﬀer. Home buying oﬀers regularly include terms such as what should be included in the sale of the home.
Anything that is an unusual request or requirement of the purchase oﬀer. We’ll want to explore the full implications of anything odd that the buyer is including in a purchase oﬀer.
Whether or not there are other oﬀers on the table that are a better ﬁt for you.
After a buyer submits an oﬀer you can accept, reject, or counter oﬀer. We will prepare any counter oﬀers together, and I will submit that to the buyer’s agent or the buyer and guide you through the negotiations.
The Oﬀer is Accepted. Now Let’s Get to Sold.
Once we’ve received an acceptable oﬀer and entered into a buying contract, there are several steps that will need to be completed before the transaction and transfer of your property is complete.
On a typical home sale, here’s how things will run:
- The buyer submits “earnest money” that is deposited into your real estate broker’s account. This is typically 1%3% of the agreed purchase price.
- A title policy will be ordered on your property.
- We will set a closing date with the buyer.
- The buyer will order an appraisal and in most cases, an independent home inspection.
- The buyer will remove the “conditions of sale” after the appraisal and home inspection, try and renegotiate their initial oﬀer, or remove their oﬀer entirely.
- After the ﬁnal oﬀer is ﬁnalized we will submit the ﬁnal legal disclosures and other material facts relevant to your property.
- You will need to complete any agreed upon requests for repair that were submitted by the buyer before the closing date.
- The buyer will most likely schedule a walk through to verify the condition of the property and see any repairs that were made right before your closing appointment.
- Closing is scheduled and completed. Your house is sold!
Understanding Property Disclosures
Before ﬁnal closing, you will be asked to ﬁll out a disclosure statement that will list “material facts” about problems you are aware of regarding the condition and history of your home. Both federal and state laws govern what must be disclosed during a property sale and as the homeowner you must be the person to complete these disclosure forms. By law your real estate agent cannot complete these forms for you.
|Yes – you must disclose!||The general rule of thumb is that you must disclose anything that would:
As you ﬁll out these forms just remember, you should strive to answer all of the questions to the best of your ability. Don’t sweat the small stuﬀ, but make sure you disclose everything that you’d want disclosed to you if you were the buyer. If you don’t know the answer to a question (such as exact age of the roof if you’re not the original owner or the like), answer “Do Not Know.” But not having precise facts about defects you know exist does not permit you to answer “Do Not Know” to every question. This will always raise a red ﬂag.
If you feel like you don’t properly understand the disclosure requirements, you should consult a real estate attorney who knows the local disclosure laws.
What Will Happen at the Closing Meeting?
Closing is the legal transfer of ownership of the home from seller to buyer. It is a formal meeting that most parties involved in the transaction will attend. Closing procedures are usually held at the title company or lawyer’s oﬃce. Your closing oﬃcer will coordinate the signing of documents and the collection and of disbursement of funds.
As a seller, you can help to ensure a smooth closing meeting by making sure to do the following things:
Review the Settlement Statement or HUD1 that the buyer’s lender or closing agent will provide you 1 to 2 days before closing. These documents will contain a detailed description of all costs associated with the transaction, including the exact dollar amount the buyer will need to bring to closing.
Verify with your closing agent any other items that you need to bring with you such as a valid driver’s license or other form of identiﬁcation.