The Home Selling Process
If you have never sold your home before or it has been a while since you have, I wanted to provide an overview of the home selling process for you. Selling your home can be a stressful process and it is important to have a good Realtor you feel comfortable working with that can help you through the process and to relieve some of that stress. If you are in the Bend area and thinking of selling hopefully I can be that Realtor for you. But regardless, to help you to know what to expect, here is how the typical home selling process should go.
Find out how much your home is worth
If you are thinking of selling your home, probably the most important thing to consider is how much you can expect to get for your home. The best way to find out what you can get for your home is by contacting a Realtor and having them do what is called a Comparative Market Analysis or CMA for your home. To do this the Realtor looks at homes in your neighborhood that have sold recently or are currently being sold and compares them to yours and includes some other factors such as market conditions, desirability of your neighborhood and your home’s current condition and comes up with what they think your home will most likely sell for. This is a free service that Realtors will do for you in hopes that you will eventually choose them to help you sell your home. In order to get an accurate home value the Realtor will need to come and look at your home to see its condition and how it compares to other homes in the area.
In addition to finding out how much you can expect your home to sell for, you should ask your Realtor to provide you with a “seller’s net sheet” if they don’t already provide one to you. This is basically a break down of what you could expect to walk away with at the end of the transaction. After all if your sell your home for $300,000 you aren’t going to be walking away with that much. The net sheet deducts your mortgage balance along with the real estate commission you would be paying the Realtors and an estimate of closing costs you will need to pay to the escrow company at closing.
I will caution you about using websites such as Zillow to find your homes value. They do offer their “Zestimate” to give you a rough idea of your homes value, but it is typically far from accurate. I have seen some that are close, but most are fairly off both on the high side and the low side.
Get your home ready to sell
The better your home shows, the easier it is to sell and the more likely you are to get your asking price. This can be as simple as cleaning the house really well and maybe de-cluttering some of your rooms. If you have a few items that are broken or not working properly that you have been putting off fixing, now is probably the time to get those taken care of. I am not going to go too far into this subject here as I have already written an extensive post on the subject of getting your home ready to sell which can be viewed here: Staging Your House to Sell.
Hire a Realtor
After your house is clean and you know how much you can get for your home, you need to hire a Realtor to list your home for you. You are going to be working closely with your Realtor so it is important to hire one that you feel comfortable working with. Once you hire your Realtor they will have you fill out paperwork and get a lot more information about your house. Then they will make arrangements to take photos of your house, get the sign put up in your yard and attach a lockbox to your home. The Realtor will create a listing in the MLS for your home and start their marketing plan for your home.
Show your home and your patience
Next comes what is usually the biggest hassle of the selling process, showing your home. Once your home is listing in the MLS and is showing up on all the home search websites, you will start getting people interested in looking at your home. Usually the first few weeks when your listing is new is the busiest time of people looking at your home. Be patient and flexible in regards to allowing people to view your home, and be sure to keep it clean. During this time when people are looking at your home your Realtor should be getting feedback from the buyers to determine if your home is priced right or if there is something about the house that you may need to work on. Depending on market conditions and your pricing strategy, finding a buyer may be quick or it may take a while. If it is taking a while then this is the time to try to be patient and keep an open dialog with your Realtor about maybe changing price or strategy at some point in the process if your home isn’t showing very often.
Get your offer
Eventually you should get an offer on your house. Depending on market conditions, your price, and the buyer the offer may be for what you were asking, higher then what you were asking or less then what you were asking. When you get an offer you have the options to accept the offer, counter the offer with a different price or terms or just to reject the offer. Which you choose is up to you. Your Realtor will discuss all these options with you when the offer comes in. Once you accept an offer, you will be able to stop showing your home, however you will still need to keep it clean for the inspections.
The home inspection
In almost all real estate contracts there is a home inspection clause that gives the buyer a certain amount of time to inspect the home to make sure there isn’t any unexpected issues with it. The buyer will typically hire a professional home inspector who will come out sometime usually in the first two weeks after the offer has been accepted. The buyer and their Realtor will usually accompany the inspector while they inspect your home. These inspections usually take about 3 hours or so. The inspector will then give their inspection report to the buyer and it will list all the issues with your house that the inspector finds. At this point the buyer will review the report with their Realtor and they have the option to either accept the house as it is, decide they don’t want to purchase the house anymore or negotiate with you to have you fix some of the issues that came up. Unless there is a major issue with the house the buyers don’t usually straight out walk away, but it is fairly common for them to ask for the seller to address a few of the issues in the report.
Unless your buyer is paying all cash, there will be an appraisal done on your home. The reason for this is that lenders will only loan money for what the actual market value of the house is. The reason for this is in case the buyer defaults on the loan and the lender has to sell the house to recoup their money. Even though your Realtor did a CMA to come up with what they thought the house will sell for, a CMA is just an educated guess where an appraisal in an official declaration of market value. The appraisal is usually done a week or so after the home inspection and the appraiser will come by and look at the house and take some pictures and is usually only there for a little bit. They then write their report and send it to the lender. As long as the house appraises for at least what the selling price is everything stays on track for closing. If the appraisal says the house is worth less then the selling price then typically the buyer will ask for the price to be reduced to what the appraised value came back as so they can still get the loan to go through. If the buyer asks for a price reducing to match the appraisal price, the seller has the option to either reduce the price, or the buyer will have the option to either walk away or to come up with the difference in price in cash.
Most of the time if your Realtor did a good job on the CMA and the home price didn’t get bid up too much, the appraisal isn’t too big of an issue. In really hot markets where value is going up rapidly though, sometimes the appraisal price hasn’t caught up to what people are willing to pay.
Pack it up
When you signed the offer for the sale of your house there was a closing date on the contract. This is the date when typically the transaction should be completed by. The date is more of a ballpark though because sometimes you will be able to close sooner, and sometimes there will need to be an extension done to allow more time for the loan to process. If you are still living in the home during the transaction, you will need to be out and have the house clean by the closing date since that is when the house will become the buyers.
Sign and get your money
Usually a few days before the closing date you will be contacted by the escrow officer to come down and sign all the paperwork to transfer ownership to the buyer. After you sign the documents, the buyer will sign their documents and then the loan will fund to the escrow company. The escrow company will then write a check or wire transfer your money minus loan payoff, Realtor fees, and closing costs.
This is very simplified version on how the sales process usually works. Obviously, there are other events that can occur and all transactions are a little different but this should give you a good idea of what to expect. If you are using a Realtor they will be walking you through this process and helping you with anything that comes up during the selling process.
If you have any questions about the process, feel free to contact me. Also if you are in the Bend area and would like to look into selling your home, I would love to meet with you and discuss the home sale process first hand.