How do I sell a house?

Whether this is the first house you are selling, or you weren't as involved with the sale process in the past, this post will walk you through the steps of the home-selling process.

1. How do I start?

It starts with the decision and intention to sell your house. Once you have made the decision, you may be paired up with one of our local professional Realtors®, otherwise known as “agents.” It’s important to note that the agent will be representing the house, and will help you make decisions in the best interest of selling the house, rather than choosing sides. Before your meeting, the agent will research the value of your property. They may pull a property profile from the title company to see what liens and mortgages are on the property. They will also prepare a competitive market analysis (or “CMA”) by reviewing recent home sales in your neighborhood. Most appraisers will use comparable sales within the last 3 months, within one mile of your home, if available. Of course, no agent knows exactly the price a buyer is willing to pay for your home, so they will also provide you with information on how to best show your home to prospective buyers.

Your agent will discuss a marketing plan and staging the home. Staging can be as simple as cleaning house, clearing the clutter and removing personal items. Or as extensive as painting, removing items and even bringing in rented furniture. Photographing most rooms in the home is also customary for internet buyers, and your agent may even do a virtual tour. Together, you and your agent will determine the best course of action to show your home in its best light to attract buyers.

Marketing, showing instructions and open houses are also discussed with you. Having a sign out in front of your home, allowing agents to access your home using a lockbox, or how to best arrange showings is an important discussion. Many areas do well with holding open houses on the weekends to allow potential buyers to browse the house without their agents. Lockboxes are often used so that other agents can make an appointment for a private showing with their buyers.

Based on the condition of your home, the current market trends, average days on the market, and the showing condition, your agent will help you come up with a strategy to pricing your home to attract the most buyers. You and your house deserve to get the most attractive offer with a great price and terms. It’s important to note that the listing price is the price that is used to attract buyers to view your home, but the market sets the sales price since it is up to buyers to determine what they are willing to pay for your property. Your home may be amazingly beautiful, but if it’s priced too high, buyers may not come look at it. A house priced too low may be perceived as having something wrong with it. When a house is priced fairly and competitively with other houses currently on the market, buyers will come look at it, and you may even receive multiple offers. Pricing a home inappropriately will make you lose valuable time on the market and will cause frustration.

Using the CMA to decide on an anticipated sales price, your agent can prepare a mock-up of a net sheet that will show you the estimated costs to pay off your mortgage, title and transaction fees, and this will give you a good idea of what you may anticipate walking away with when your house sells.

After meeting with your agent, discussing the showing and marketing plan, and deciding on a marketing price, you will sign an agency disclosure and listing contract. You and your agent will also discuss items to disclose about the house, such as age of the roof, any non-working systems, etc. and you will prepare the timeline to get the house ready to put on the market.

2. What happens during the marketing period?

Once your house has been prepared for the market (cleaned, photographed, ready for showing), your agent will place the house on the Multiple Listing Service, or MLS. This will alert all real estate agents in your area that your house is available. It will also push the listing onto multiple web sites such as Realtor.com, Zillow, and all the local and national real estate company sites (RE/MAX, Homes of Idaho, Coldwell Banker, etc.). Many agents and their buyers are on automated searches that will send them listings that match what they’re looking for. Those buyers will usually know about your house within 12-24 hours of your house going on the market.

Buyers will view your home at the open houses you have scheduled, or by appointment with their agents. If there is a lot of interest in the first week or two, you may expect to receive questions about the house and agents may let you know their buyers are interested in making an offer. If you have multiple buyers with interest, your agent may set a deadline or time frame for receiving offers. This will allow you to collect and review offers to select the best one. If your house has been on the market for a few weeks with dwindling showings and no offers, there may be something about the property or the price that may not be in alignment with buyer expectations. You and your agent should discuss showings, and whether a price reduction or other strategy is needed to attract buyers. She may also reach out to the other agents to discuss any objections buyers may have to writing an offer. It could be as simple as fixing an off-putting paint color, or making a repair.

3. What happens when an offer is received from a buyer?

When a buyer is excited and wants to buy your house, their agent will typically reach out to your agent to ask questions about what you are looking for in an offer. This usually has to do with when you want to move, if you need extra time in the home (i.e., a rent-back), and any other special terms you are looking for in an offer. Your agent will never disclose your personal information such as reason for moving or that this is in connection with a divorce.

The buyer and their agent will write an offer and send it to your agent, or present it in person. Offers have a purchase price, downpayment and loan information, a contingency period and a closing date when the buyer will own the house. Your agent will review all offers with you to determine if anything should be countered – price, closing date, or anything else that may not work for your moving timeline. Once you accept an offer, or a buyer agrees to your counteroffer, you are in contract to sell the house!

4. What is the escrow period and when does closing happen?

The buyer will put an earnest money deposit into escrow with the title company within 3 days of your acceptance of their offer. They will then have between 5-15 days to conduct an inspection of your property and to secure their loan (unless they are paying cash). If the buyers have a property inspection, they may come back requesting you fix some items, provide a credit for them to fix them, or even renegotiate the price. At the same time, the lender will have an appraiser view your home and perform a similar market analysis that the agent did at the first appointment. While it can be disruptive having inspectors and appraisers visit your home, it is customary and important to cooperate to move things along towards closing.

Once the buyer is satisfied with the condition of the house, and the appraiser has approved the value of the house for the loan, the buyer will remove their contingencies. This means that they are a solid buyer and you can start packing and making solid plans for your move. Unless you have made arrangements to stay longer (i.e., rent back), you will need to move out prior to the closing date. Make sure you’re still doing regular maintenance on the house such as mowing the lawn and taking out the trash. A few weeks may pass with little to no action until about a week to 10 days before the date of the close of escrow. Your agent will coordinate a signing date for you to go to the title company, or have a mobile notary meet with you to sign the sale documents. The buyers will also visit the title company to sign the purchase documents, and their loan documents. While you will largely be left alone to pack, the buyers may coordinate a final walk-through of your house before closing, to verify condition or check that any promised repairs were completed. Within a day or so of the closing date, the buyers’ funds will arrive at the title company and then the documents will be recorded at the County Recorder’s office to record the sale. This will close the escrow and the title will transfer to the new buyer.

5. What happens after closing?

When the buyers’ purchase money is deposited into the title company, the escrow officer uses the proceeds from the sale to pay off any loan amounts, mortgages, liens or other encumbrances on the property. The title company will prepare a closing net sheet prior to closing that will show all of the expenses from the sale such as city, county or state transfer taxes, mortgage pay off amounts, and commissions. The net sheet will also show any taxes due from the seller, or credits to the seller for pro-rated taxes. This will be provided when you sign all of the sale documents at the title company, so you will have a more exact figure of your payoff amount. You will also provide the title company with instructions on how to distribute your proceeds.

Once escrow has closed, the proceeds from the sale will be sent directly to the mortgage holders and other agencies (county tax assessor, etc.). Your proceeds will be distributed in the manner in which you chose at your sign off- the money may be wired directly to your bank account, or you may pick up a cashier’s check. The new buyer will now be the owner of record of the property.