If you’re feeling confused or overwhelmed trying to understand the process of selling your home, you’re not alone. There are quite a few steps, and it can feel like a lot to wrap your head around. We put together this step-by-step overview to help you make sense of the process.
1. Decide how you’re going to sell.
There are a few different options available to you when you’re planning to sell your home. You can look into selling your home directly to Opendoor, sell your home yourself (also known as “for sale by owner” or “FSBO”) or you can work with a listing agent. You’ll want to assess these options and determine the best fit for your circumstances. For instance, if you’re looking for some guidance in the process, FSBO might not be the right option for you.
If you’re going the traditional route and plan to list with an agent, you’ll want to find an experienced local professional to help guide you through your home sale. One common way to find a listing agent is through referrals from people you know. In fact, 64% of sellers found their agent through a referral according to the National Association of Realtors.
You could also consider to sell your home to a direct buyer like Opendoor. At Opendoor, we take a single service charge to provide you with a hassle-free sales process without listing, showings, and months of stress. You’re in complete control of your moving timeline, and choose your own closing date. You can start the process by getting a free offer on your home – or getting in touch with us if you have any questions.
2. Decide on an asking price.
Most homeowners have an idea of what their home is worth, but how do you decide on the right asking price? There are several tools online that estimate your home’s value, and your agent will leverage those tools as well as comparable homes in your area to determine the right asking price.
Setting the right price is tricky. Price the home too high, and it will sit on the market too long. Price it too low and people might suspect that something is wrong with it. The good news is that you can learn a lot by assessing similar, comparable homes nearby.
Estimations will also take into account things like the special improvements you’ve made, the history of the real estate market in your area, and supply and demand. Before you hire an agent, make sure you can come to an agreement on the listing price of the house during their listing presentation. Once you’ve agreed on a price it’s time to get the home show-ready.
3. Get your home show-ready.
After living in a home for a long time, it’s extremely difficult to look at it objectively. Prospective buyers will be seeing your home for the first time—that’s why a great first step to getting your home ready is putting yourself in the buyer’s shoes and evaluating your home room-by-room to determine the work that needs to be done.
Once your home is ready, your agent will help you take photos and create a listing on the Multiple Listing Service—the industry standard listing database used by real estate brokers across the country. The listing will include things like your square footage, an enticing description of your home, and, of course, your photos. The process can take 3 to 5 days, but once it’s all uploaded, your listing will be available for viewing on the MLS.
4. Show your home.
When you’re working with an agent they’ll typically show the home without you present, unless you request otherwise. Your job as a seller is to create a welcoming environment that makes it easier to attract a serious buyer. Here are a few best practices to consider:
– Ensure that the home isn’t too hot or too cold
– Clean the house top to bottom to make the best impression
– Find a place for your pets to stay during the showing
– Make sure that the rooms are well lit
– Don’t overdo it with any scents
– Have your agent ask visitors for feedback and use it to improve.
Keep in mind that, nationwide, homes are on the market for 65 days on average before the owner receives an offer, according to Realtor.com. It also takes 10 showings on average to find a buyer, so don’t get discouraged. Of course, these numbers vary greatly depending on the market where you live and the unique condition of your home.
4. Receive purchase offers and negotiate.
If your home is priced appropriately and it shows well, you’ll start seeing offers come in. As a seller, you don’t always want to accept the initial bid a buyer makes on your home. Buyers may expect there to be a negotiation, so they’ll often come in below the list price.
You may also receive multiple offers, so you’ll want to be ready to counter-offer accordingly. Depending on the circumstances, it’s okay to counter-offer at the list price. Even if you receive a lowball offer, be sure to take it seriously and negotiate a counter offer. Once you’ve found a buyer and come to an agreement on a sale price, you’ll need to prepare for the inspection and appraisal. The appraisal typically happens before the inspection, but the order can be changed.
6. Prepare for the appraisal.
Once you’ve accepted an offer, if the buyer is using financing, the buyer’s lender will schedule an appraisal of the home. A good tip is to clean the house beforehand, so that it’s in great condition for the appraiser. Once you’re finished with the appraisal, the house will need to be inspected.
If the home receives a low appraisal, don’t panic. A low appraisal doesn’t necessarily mean that the sale is off. It simply means that the bank will only fund the buyer’s loan to the amount of the appraisal. There are several options you can take to continue with the sale, and your agent will typically have a recommendation. For instance, the buyer can make up the difference in cash, you can lower the home price, or you can try providing a list of comparable sales to the lender’s underwriter in hopes that the appraisal changes.
7. Prepare for the inspection and provide disclosures.
Following the appraisal, the buyer will request an inspection of the home. Ask your agent for a checklist to prepare for the inspection. Make sure the inspector has access to the attic and basement. If the general inspector finds any issues the buyer may request follow-up inspections, like a roof certification.
Following the inspection, your agent will help you provide seller disclosures to the buyer, including lead-based paint disclosures, and any conditions that could affect the buyer’s decision to buy the house. If your neighborhood has a homeowners association (HOA), you’ll also need to share the rules of the HOA—also known as the Covenants, Conditions, and Restrictions or CC&Rs—with the buyer.
7. Contact the title company and open escrow.
To move forward, you’ll need to work with a title company. The title company does a search of property records that helps catch issues like disputed ownership claims and incomplete documentation. The listing agent, your lender or anyone you know who has bought or sold a home should be able to recommend a title company. Once you know the title company you’ll be working with, your agent will order a title policy.
As part of a home sale, you’ll also pen an escrow account, which is basically a trusted third-party service to ensure that money only changes hands from buyer to seller once the relevant commitments are met. At this phase, you’ll ask the buyer for an earnest money deposit. Earnest money is essentially a deposit the buyer gives to the seller to show their good faith in the transaction. There’s no official amount required for earnest money, but it’s usually 1% to 3% of the sale price.
8. Negotiate repairs and seller concessions.
Based on the inspection, buyers may request repairs before they purchase the home. It’s important to note that repair requests are extremely common. Unless your house is brand new it will likely need some repairs. If the buyer requests repairs, you are entitled to a copy of the inspection report. If you prefer not to complete repairs, a buyer may accept a credit instead.
Buyers may also request that you help with their closing costs. Anything that you agree to give the buyer to improve the deal is part of what’s called seller concessions. Seller concessions include things like paying for inspection, appraisal, and processing fees.
9. Sign title and escrow documents.
You’re almost there. All that’s left is for you to sign your title and escrow documents. Be sure to bring a valid photo ID with you when you sign. Following close of escrow, documents showing that the seller now owns the house will be recorded in public records. You’ll be wired your money, and the sale will be complete. Congratulations, you made it!
We hope this helps clarify the selling process.
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