How To Sell Your House
- Ready to sell your house
- How Much Is My House Worth
- Real Estate Documents and Disclosures
- Perform a property owner inspection
- Preparing the marketing and handling incoming traffic
- Receiving, Reviewing offers, Negotiating, and Accepting An Offer
- The closing process and what to expect and involved
Our free how-to guides are to help you organize the selling or buying process of your house in simple steps.
1. Are You Ready To Sell Your House
What it will take to ready your house for sale will ultimately depend on your “why.” It is important to explore, review, and understand the reasons for selling. In many cases, the reason for selling will most likely have an urgency that needs to be addressed. Your “why” will allow you to overcome the challenges you may face when selling your house.
Personal goals or events: Your household may be the driving force in why you need to sell. It is understood as your household grows, so will the need for more space, bedrooms, bathrooms, etc. Perhaps there is a job opportunity, or your current employer needs you to relocate quickly. On another note, perhaps your goal is to downsize and make a profit.
Time and Speed:
Once you have honed in on your "why,” you can now address the “time and speed” at which you want to sell your house. It is often stated that the best time to sell your house is in the spring. However, you may not have the luxury to wait. The truth of the matter is a house can be placed on the market at any time; however, there are a few factors to consider regarding the speed at which it will sell.
To help determine how fast your house may sell, the following is a formula, regardless of the time of year.
Research and list six months' worth of homes sold within your local market of one to three miles around your house. It is encouraged that you find homes that are similar to yours in almost every way or close enough. It is important to confirm, or at best, guess the Listing Date, Offer Acceptance Date, and Closing Date.
Listing Date: This is the official date on which a house went on the public market.
Offer Acceptance Date: This is the date on which there was an offer made by way of a purchase agreement contract. Typically when there is an accepted offer, the status of the listing changes to Pending. Try to confirm, or best guess the offer date.
Closing Date: This is when the house officially closes, and possession is transferred to the new owner.
How many days did it take to place the house on the market from when an offer was received? Knowing the answer to this question will help gauge if there is a pool of buyers or a lack of them. Typically, offers that are made within 14 days from the listing date is an indication that there is a pool of interested buyers.
Next, count up how many days from the Start Date and Closing Date of when the houses sold and calculate the average. This will help gauge the speed, or how many days it took, to sell the house.
Out-of-pocket repairs and expenses:
Selling your house will require money. In most cases, your money should go toward major repairs that will position your house in the best light. Below are major areas that should be assessed, addressed, and money set aside in the event there is a repair needed.
Structural: This includes foundational issues, roofs, uneven floors, and anything that compromises the integrity of the house. These items should be inspected and addressed by a licensed professional.
Mechanical: The following is a list of the most common mechanicals, and in no particular order, that keep your house operational throughout the year.
Main Circuit breakers - All electrical that the house receives will most likely go through the main circuit breaker. This is an electrical safety panel designed to protect your house from a potential electrical fire.
Heating, Ventilation, and Air Conditioning (HVAC) - Furnace, Ventilation, and Air Conditioning units. These items are important to keep your house warm in the winter and cool on hot summer days.
Water, Sewer, and Plumbing -
- City water and City Sewer - The city is responsible for providing a water and sewer connection line underground. If there is a city water or sewer line issue, the city is responsible for repairing only the city line and not your house water or sewer line.
Well, water, and Septic Feild - Depending on your state, county, and governing rules, you most likely are responsible for any well and septic issues.
Water Heater - Water tank, on-demand water heater.
Safety: Regardless of whether your house is a single-family home, small condo, etc., safety is at the top of your mind. Therefore, create a checklist of items that could pose a safety concern.
Entry Doors - Inspect and repair doors that do not close, open, lock, and unlock properly.
Windows - Inspect and confirm they are able to close, open, lock, and unlock properly.
Steps and Trip Hazards - Inspect and repair any trip hazards such as broken steps, missing handrails, loose carpet steps, driveway cracks, sidewalk cracks, etc.
Electrical components - Inspect and confirm all wall outlets work properly and are grounded accordingly. Confirm wall outlets that are required to have ground fault interrupters (GFI), such as kitchen and bathroom sinks, work properly.
Out-of-pocket real estate-related expenses:
Real Estate Attorney: Selecting a real estate attorney to represent you anticipate paying $400 and up an hour. Services provided will vary. Make sure to ask how they structure their fees.
Real Estate Agent / Realtor / Broker: Hiring a real estate agent, you can expect to pay 6 percent commissions.
Title Company: Typically, a title company will charge fees based on the sales price and the complexity of the sale. Therefore, when selecting a title company, make sure to ask how they structure their fees.
2. How Much Is My House Worth
Price your home right from the start. Your pricing should line up with your urgency or your goals. Therefore, set a realistic price that can be justified because buyers are at the mercy of their lender approving the value of the house.
There are multiple resources that will help you estimate the value of your house. However, getting a professional opinion is the best way to determine your listing price.
Hiring a professional licensed real estate appraiser is the best option to identify the value of your home. An appraiser is highly trained and will provide you with a comprehensive evaluation. These evaluations are recognized by banks, municipalities, and other institutions.
Another option to obtain the value of your home is having what is called a Broker Price Opinion, also known as a BPO. A licensed real estate broker is able to provide a comprehensive valuation; however, it is only an opinion and is not a substitute for an appraisal.
The most common method of determining the value of your home is what is called a comparable market analysis, also known as a CMA. Real estate agents can provide you with a comprehensive valuation of your house; however, it too is an opinion and is not a substitute for an appraisal.
3. Real Estate Documents and Disclosures
There is a lot of paperwork involved when selling your house. Below is a breakdown of what to expect in simple-to-understand phases.
Phase 1: Documents needed when your house is placed on the market for sale.
The following two documents are needed to help inform and educate prospective buyers before an offer is made.
Seller Disclosure Statement: This document is filled out and completed by you as the homeowner. This disclosure allows you to describe the overall condition of your house. The seller disclosure statement document in most states is required, and failure to provide this document may allow a buyer to back out of a purchase agreement contract without penalty.
- Include additional pages to disclose any repairs and improvements
Lead-Based Paint Disclosure: The Environmental Protection Agency, a Federal entity, requires you to disclose important information about lead-based paint. Failure to disclose this information may allow a buyer to back out of a purchase agreement contract without penalty.
Phase 2: Documents needed when there is an accepted offer
A signed purchase sales agreement and signed addendums pertaining to the sale of the house. Below is a list in no particular order and may not apply to our transaction.
-Purchase Sales Agreement signed and dated by Seller and Buyer.
Homeowner Association documents
A home warranty purchase contract
Federal Housing Administration FHA addendums. This applies to a buyer that is using an FHA Loan
Veteran Loan addendums. This applies to a buyer who qualifies for a VA Loan program
Rural Development Loan addendums, also known as RD loans. This applies to a buyer if they are using an RD loan program.
U.S Department of Agriculture, also known as a USDA Loan. This applies to a buyer if they are using this loan program.
First Time Home Buyer Assistant Program addendums. This applies to a buyer that is using this program
A signed seller disclosure statement and any additional pages. Both Buyer and Seller must sign and date.
A signed lead-based paint disclosure and any additional pages. Both Buyer and Seller must sign and date.
Buyers' financial proof documents
- Pre-approved mortgage letter
- Cash Buyer Letter from bank or institution showing funds available at or above the accepted offer price
A copy of the earnest money check
Buyer's personal letter. Provided at the buyer's discretion
Phase 3: Documents needed for closing with a Title Company
- A signed seller and buyer purchase agreement and any signed addendums pertaining to the sale of the house.
- Mortgage Authorization Letter and Payoff Request.
- Documents related to the title
- Property surveys if required
Your title company will handle all of the calculations and paperwork that is required and may request additional documents when necessary.
4. Perform A Property Owner Inspection
Before placing your house on the market, perform a home inspection by a certified home inspector. Having a formal home inspection helps to uncover hidden defects or potentially expensive problems that may come up on a buyer's inspection. Having insight allows you to make any necessary repairs and allows you to prioritize them. In the event there are repairs, you can position yourself as a proactive homeowner that cares about the home.
5. Preparing To List, Deploying The Marketing, And Handling Of Incoming Traffic
Preparing to list your house will require a lot of careful planning in regard to organization, decluttering, cleaning, and paperwork. The goal is to present your property in a professional manner that will allow prospective buyers to envision themselves in a new home. Your house needs to sparkle from the outside in.
Take care of any exterior repairs, paint, trim work, etc. Your house must visually have a new feel or a well-taken care of look. One of the most inexpensive ways to achieve this look instead of painting the outside is to have the exterior power washed. Just like going to a used car dealership, all of their used cars have been washed and waxed. The new feel look will motivate the buyer to have a look at the inside of your house. In terms of landscaping, clean up the lawn and tidy up areas that will help give a new feel look.
The interior of your house also needs to have a new feel look. For starters, remove all personal items, such as family pictures and any items that would reflect you and your family. The goal is to help the buyer dream of what it would be like living in the house with their items and family. Help the buyer dream by keeping all bedrooms, bathrooms, closets, shelves, and cabinets organized, clean, and clutter-free.
Store all of your personal belongings that reflect you and any items that may distract the buyers in a dedicated room of choices, such as the basement or garage, or rent a storage unit
Deploying Marketing is heavily dependent on photos, videos, and virtual walkthroughs. Consider hiring a local photographer that has the experience and offers these services and more. The purpose of marketing your house is to attract as many buyers as possible online and offline.
Once you have the digital assets of your house, you will need to research real estate sites and local venues where you will be placing your house for sale. Real estate sites will require you to verify ownership, they may require additional information, and will most likely require some kind of fee to use their platform. Be prepared to jump through their vetting process.
Alternatively, reaching out to your local newspaper online outlet is effective and may not require a lot of vetting. Nevertheless, it is an effective way to attract buyers and is less complicated.
Open Houses will be a part of your marketing strategy. Therefore, your postings should clearly outline your address, dates, and times. Before your open house, purchase directional signs from your local hardware store to help traffic find you easily.
Below is an outline of how your marketing strategy may look and in no particular order.
Coming To Market Ad
Open House Ad
Just Listed Ad
Offer Accepted
Pending and Accepting Backup Offers Ad
Handling incoming traffic from your marketing efforts will generate inbound calls, emails, text messages, and more. Therefore, this will require having a system in place to organize all potential buyer conversations, following ups, reminders, to-do’s, etc.
6. Receiving/Reviewing offers, Negotiations, and Accepting An Offer
Before receiving an offer, you will most likely have conversations and answer questions from prospective buyers. Whatever comes of those interactions, have everything and anything in writing, signed, and dated. As you consider accepting an offer, it is a good idea to confirm the offer lines up with your goals, such as the offer amount, whether you’re comfortable with the contingencies, and the closing timeframe.
Phase 1 - Receiving and Reviewing Offers
The primary talking points when receiving and reviewing an offer are below.
- Sales Price
- Earnest Money Deposit, also known as, good faith deposit
- Negotiating terms and conditions, also known as, contingences
- Proof of Funds or Financing Approval
- Closing Date
Phase 2 - Acceptance of An Offer
Once all parties have signed and dated the purchase agreement, also known as the PA, the next steps are important to follow.
Submit a copy of the purchase agreement to your title company.
Create a timeline of all contingency deadlines
Immediately hand off the signed purchase agreement contract to your title company, real estate attorney, loan officer, etc.
Confirm delivery of EMD with your escrow officer/title company. This is an important contingency.
Perform all Seller contingencies *most common contingencies and time-sensitive.
Seller’s title company to submit preliminary title to buyer’s
Submit Home Owner Association HOA docs to buyers if applicable
Real estate attorney approval for all documents such as PA, title work, HOA, municipal docs, etc
Satisfaction of all contingencies and removal of contingencies via addendum, especially the Clear to close from the Buyers lender
Anticipate extensions and if they are reasonable
7. The Closing Process And What To Expect
The closing date is also known as the transfer of property ownership. In order to close on time, you, as the seller, are at the mercy of the buyer's lender. The lender's ability to process the loan may take longer than what was originally agreed on. Therefore, anticipate the buyers to extend their closing date.
Nevertheless, once the buyers receive the notification, they have “Clear to close” below is an outline of the seller's responsibilities and what to expect.
Review the Seller statement from your title company before the closing date
- The title company will handle and prepare all of the documentation, such as the Seller and Buyer's itemized statement, title search, calculating transfer taxes, calculating what money is needed from parties to bring on the day of closing, mortgage documents, mortgage payoff, recording of documents, HOA transfer docs, etc.
Remove all personal property from the house but leave items in the house that were agreed upon in the PA.
Notify service providers before the closing date to end service on the date of closing
- Electric, Gas, Cable/Internet, Home insurance, Lawn service, Home alarm system, Trash pick up, and any and all ongoing subscriptions.
Create a folder of all manuals and warranties for items in the house and place them on the kitchen counter. Include all devices that allow the new owner access to the property, such as garage door openers, etc.
Bring the following items to the closing table
- 2 forms of state or government-issued identification
- Keys, home alarm fobs
Below is a list of documents that you may likely receive and will need to review and not in any particular order
Copy of Purchase Agreement and Any Addendums
Closing Statement
Signed Deed
Bill of Sale
Affidavit of Title
Loan Payoff Information
HOA Forms and Guidelines
Survey Results or Survey Affidavits
Home Inspection Results
- General home inspection
- Well and Septic
Proof of Repairs or Renovations
Home Warranty Information
Copies of Relevant Wills, Trusts, or Power of Attorney Letters
Relevant Affidavits (Name Affidavits, Non-Foreign Affidavits Under IRC 1445, etc.)
Closing Disclosure (for certain seller concessions)
Correction Statement and Agreement
Seller’s Property Disclosure Statement
Flood Zone Statement
Lead-Based Paint Disclosure
Once all the documents are signed and money has been transferred, have your title company print out a hard copy of all the documents and keep them in a safe place. Should you ever misplace your closing documents, the title company will have a digital copy on file in a secure link via the cloud.