What Happens When You Sell Your House?

You have your eye on a beige beach bungalow with a bright turquoise door. Before you can roll up with your favorite swimsuit and grab the keys, you need to sell your house. We’ve simplified the process of selling into one list so that you know what to expect from start to finish. Ready to move into your dream home?

Here’s what happens when you sell your house:

Find a real estate agent

You need a licensed, professional real estate agent who is a match for your personality, knows the area, and understands what you hope to gain from the selling process. Mark Kiley, a top seller’s agent and single family home expert in Manchester, noted that strong communication between you and your agent is essential to make the sale work. As he says, “With no dialogue, there’s no date.”

Here’s what you need to look for in that agent

Level of expertise

Do they know the area? Have they sold in your neighborhood before? Do your personalities jive? You will be spending the next four to eight weeks with this person, so if you have doubts, swipe left.

Good fit

Be picky. Interview several agents until you find the Ross to your Rachel. Ask yourself if the agent is professional and efficient and if she has a good sales record. A trustworthy agent will provide her performance data at your request, and you can also look up her stats on her HomeLight profile page. Find an agent who is excited to listen to your goals, worries, and excitement about selling your home. As Mark Kiley says, your ideal agent respects what you need out of the process.

“For me, it boils down to one word: respect. I respect my clients’ privacy above all else and this customer confidentiality is the first step in building trust between my client and myself. Then and only then can an effective dialogue truly begin, and with my clients I do this by simply listening. I ask what I can do for them, and I listen.”

Licensure

Is your prospective agent licensed to sell in your area? How long has he been licensed? Your Aunt Cathy may have sold her house herself “By Owner” and has offered to help sell yours, but ask her to bake you cookies instead.

According to the National Association of Realtors, 92% of all homes sold in 2014 were sold by a licensed Agent. These same statistics show that the 8% of homes sold For Sale by Owner (FSBO) typically sold for $210,000, whereas the same home sold with the assistance of a licensed Agent brought an asking price of $249,000. That’s an additional profit of almost twenty percent. Hire a licensed agent instead of trying to sell your home yourself.

Caveat

You may have seen ads on billboards or around the internet for companies that claim to buy your house fast for cash. While this is true, you’ll lose thousands of dollars you could have made if you stuck with a real estate agent and gave the house a little more time to sell.

Your real estate agent gets to work

One of the first things an Agent will do is run an analysis of current market data and Comparable Market Analysis, or CMA. These are known as “comps.”

Your agent will use the value of nearby properties of comparable size and quality to determine a ballpark price for your home. Comps in your neighborhood are houses of lesser and greater value that your agent takes into consideration to determine a fair median value for your property.

Your agent will work with you to establish a listing price. The process includes a walk-through of the property and/or a preliminary appraisal by a professional appraiser. With comps as the starting point, a walk-through will show the agent the parts of your home that add value. These might include upgraded appliances, hardwood floors, a new roof, a landscaped front and backyard (succulent garden, anyone?), and close proximity to schools, nightlife, restaurants, public transportation, etc.

The fun part: Paperwork

Listing agreement

This is the agreement between you, your agent and their real estate agency that states in writing that they now represent you. The agent’s terms and commission rate as well as your rights as a seller are stated in this agreement.

Seller Disclosure Statement

This is a statement signed by the seller that says you are aware of things such as construction flaws or known problems with your property on the date that the disclosure is signed. It does not take the place of a formal appraisal or inspection but serves as an act of good faith to potential buyers. Here is a sample of a Seller Disclosure Statement.

Prep your home for sale

With the help of your agent, determine the following:

Updates

How much updating is needed? Paint? Appliances? Fixtures? Landscaping?

Repairs

How many repairs are needed? Cracks? Roof? Fencing? Water damage? Working outlets and light fixtures? The inspector will look at all of these.

Pro Tip: The official inspection of your home comes much later in the selling process, but at this early stage it is wise to get a preliminary inspection so that there are no surprises down the line. This gives you a chance to fix and perfect your property prior to the scrutiny of the buyer’s inspector and appraiser.

The three “I”s: Improve, improve, improve

Curb appeal

First impressions are key. Trim existing landscaping, disguise outdoor trash cans and visible air conditioning units, repair fences, paint your front door, update your house numbers. Keep your lawn mowed and pristine. Need some extra curb appeal landscaping tips? We’ve got you covered.

Indoor improvements

Clean the carpets, polish appliances, windex the windows, dust the blinds, and fill nail holes in walls. Paint all walls beige (trust us, beige is fabulous). Keep trash bins and litter boxes fresh and emptied at all times, and replace all light bulbs.

Outdoor improvements

Clean/update/repair shutters, gutters, fencing. Add landscaping to bare spots such as shrubs, landscaping rock/stones and potted plants.

Stage your home

Clutter is chaos

Put away the photo of your family swimming the Great Barrier Reef this summer, the watercolors tacked on the walls, and pick up the Shopkins littering the hardwood.

Clean Suzy’s bachelorette party invitation off the fridge. Potential buyers should be able to visualize their blue suede couch and the memoir they read before bed sitting under the bright bay window in the living room.

Make it Pinterest worthy

According to the National Association of Realtors, you should arrange furniture so that the best features of your house stand out to potential buyers. Opt for clean lines and a few statements that draw the eye to the windows, crown molding, and unique structure of your space. You can learn a thing or two from the way Joanna Gaines stages homes on HGTV’s Fixer Upper if you need a starting point.

List your house

Enter home into MLS (Multiple Listing Service)

Congrats! You’ve listed your house for sale. Your agent will enter your home into the MLS database which will generate a searchable MLS number unique to your property. Having your home in the MLS system allows other agents to view the listing, read the description, tour the amenities, consider the asking price, and see photos.

Initiate advertising

Your agent has access to many online resources to promote your property to other agents and prospective buyers.

Fun Fact: The National Association of Realtors measured that 92% of buyers do their initial searches for homes on the Internet.

Schedule an open house

This step is optional (can you believe it?). HomeLight’s National Agent Insights Survey, currently underway, asked over 100 of the top real estate agents across the country and found that only 50% actually recommend hosting an open house. Current 3D technology allows prospective buyers to tour a home with virtual 360 degree views of every room. Some consumers prefer this option to get a feel for the place before touring in person.

Set up a few private showings

Your agent will show your home to interested buyers and their agents. These showings are by appointment only. When your house is on the market and listed for sale, you must always keep it ready to show at a moment’s notice. Your agent will likely give you about an hour’s notice before the buyer and their agent arrive to tour your property, but don’t panic. After all the work you did with your Swiffer duster and the minimalist arrangement of furniture, your house is ready to show at the drop of a hat.

Start receiving offers on your house

Purchase offers are presented to you via your agent, usually with a phone call from the buyer’s agent to yours. Can you feel the butterflies in your stomach yet?

Negotiations and counteroffers

Agents will do preliminary negotiating with the buyer’s agent, but ultimately it will be up to you whether or not to accept the offer or give a counteroffer.

Counteroffers are made by you to your Agent who then takes your number back to the buyer. This goes on until a price is reached that both parties are happy with. The buyers making the offer may accept an upgrade (paid for by you) instead of a lower sales price. Use upgrades and repairs as leverage for price negotiations and counteroffers.

Accept sales contract

At this point, nothing is set in stone. Property inspections and appraisals still have to be done, and depending on the results of said inspections you could find yourself back to the bargaining table.

Additional negotiations if necessary

If the Inspector finds flaws in your house such as non-working electrical outlets, foundation issues, roof repairs or even a leaky faucet, these things will have to be fixed. You can fix them at your own expense and continue with the existing contract, or the buyer can opt to do the repairs for a lowered sale price. These details will be presented in an updated Sales Contract to both parties.

Close the deal on your home sale

Closings are typically held at a title company where representatives for each party meet and sign all the finalized contracts, purchasing agreements, the buyer’s lender agreements, and where the sellers sign over the title or deed to the property to the new owners.

Most of the pressure is on the buyer to have secured funding for the purchase and the majority of the closing costs. This process only gets stressful for the seller if the buyer has not lived up to the original contract/purchasing agreement or is having trouble securing a mortgage, which can cause delays in closing (and let’s be honest–you want to sell your home fast).

If the buyer has not yet secured a lender, a “financing contingency” clause will be added to the contract so that if the buyer doesn’t secure a mortgage in a specified amount of time, the seller is protected.

The closing is where the funds from the buyer’s lender are transferred via escrow and to you as the seller, and where the title (deed) actually changes hands from seller to the new owner.

Calculate your closing costs

An experienced real estate agent will have discussed closing costs with you before you ever get to the table so that there are no surprises. The division of closing costs can be used during negotiations to secure the agreement between seller and buyer if push comes to shove (which it sometimes does). All terms must be in writing in the contract prior to closing.

Most of the closing costs fall on the buyer. However, there are still sales commission fees, inspection fees, appraisal fees, and title insurance costs that are the responsibility of the seller. Your contract can be written so that your part of these costs come out of the money you receive from the sale of your property.

Set a closing date

Agents for seller and buyer will work with the title agent, lenders, seller and the buyer, and schedule the closing on a date agreeable to everyone. On this date all involved parties will sign all contracts, deeds, and other legal documents and finally turn over the keys to the new owners.

After the sale

Have your mail forwarded to your new address. The USPS recommends initiating a change of address form 30 days prior to moving, or as soon as you know your new address. Skip on over to your nearest post office to pick up a form.

Keep your paperwork and all home improvement receipts for tax time and possible deductions. Asking yourself, “I just sold my house, now what do I do?” read our resource for everything you need to do post sale.

If you want further reading on what happens when you sell your house, check out our curated list of 4 of the best real estate books out there right now.

You’ve dotted the Is and crossed the Ts. As you run off into the sunset to reenact this comprehensive list in real life, remember that your real estate agent is your greatest resource.

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