Step 6: An Offer To Buy »
What you should do and consider when a potential buyer makes an offer for your house.

• Reviewing the offer
  Carefully review the offer to purchase with your Prudential Radford & Associate, REALTORS agent. You may wish to consult an attorney to assist in this review. It tells you the price the buyer is willing to pay and under what conditions. This offer is the most important document of the sale. Once you and the buyer sign it, it becomes the contract of sale.

  Your options
  

  • Accept the terms with no changes and sign the offer.
  • Make a counteroffer to the buyer by making some changes. Many counteroffers may take place before the final agreement is signed.
  • Reject the offer entirely.
  • Once you've signed an offer, you may accept a backup offer if the buyer clearly understands the house is under contract.
• Price
  
  • Decide on a price. Your sales professional can estimate your proceeds — the sale price minus fees, taxes and insurance.
  • Don't be concerned if the offer is your asking price. It doesn't mean you under priced your home, but rather that you priced it right.
  • If the price is less than you wanted, look at the contract as a whole. Perhaps the buyer is assuming some of the closing expenses you expected to pay.
  • Consider splitting the difference if you and the buyer come within about $1,000 of each other. Remember time on the market is an additional expense.
• Earnest Money
  An earnest money deposit will be held by a third party until an agreement is reached between you and the buyer. At that time, the money is usually credited to the buyer and applied to the down payment. Until you accept his or her offer, the buyer may withdraw the offer and get the earnest money back. On the other hand, if the buyer fails to follow through with the contract once it's accepted, it is customary for the earnest money to be forfeited to the seller.
• Property title
  As part of the contract process, you must prove to the buyer that you have a clear title on the house — that you own the property, and there are no legal claims against it. Through a title search, proof is provided:
  
  • The insurance company may search the title through the owner's policy of title insurance. Either the buyer's insurance company or your own may conduct this, depending on the buyer's preference of company.
  • The abstract of title is a condensed history of a title to a property and a certification by the abstractor that the history is complete and accurate.
  • The certificate of title is reviewed by an attorney who searches the title and issues an opinion that the title is clear.
  • In some parts of the country, the Torrens system is used as a means of registering property. At closing, the duplicate Torrens certificate of title is turned over to the buyer.
• Property deed
  Be prepared to convey the property with a deed — a legal document that transfers the title (or ownership rights) of the property to the new owner. Most buyers will require a general warranty deed, in which you guarantee that no one will bring a claim against the title.
• Conditions
  Review the contract for the special conditions under which the buyer is offering to buy your home. A common condition is one in which the purchase of your home is contingent on the buyer selling his or her old home. The conditions may also be more specific, such as asking you to provide a survey of the property.
• Provisions
  Read the fine print in your contract to understand the provisions (or ground rules) of who pays for what in the context of the sale. For instance, the contract should explain who is responsible if there's damage to the house after the contract is signed. The responsible party will want to insure the property through the transition. You or the buyer may add special provisions to the standard ones.
• Sales Specifics
  Double-check the list of everything you intend to sell that is included in the contract and make sure it is accurate. This list may include items such as fixtures, window treatments or appliances.

Step 7: Closing and Settlement »
What you need to know about closing and settling up on the sale of your house.

• Closing and possession
  • The buyer and sales professional arrange the settlement and select the settlement agent, with your approval. The person who handles the closing may be a broker, lender, title insurance company, escrow company or attorney.
  • Frequently, closing is dictated by the necessity of the buyer in arranging financing, usually a period of 30 to 60 days.
  • Look over any terms in the contract that state when the buyer will take possession. If you aren't moved out by that date, you are often obligated to pay rent to the buyer.
  • Your sales professional or attorney can help you line up any of the paperwork that the contract has called for you to supply, such as the title insurance or a survey.
  • Expect the buyer's lender to send an appraiser and a surveyor to check your home.
  • Notify your lender that you will be paying off the mortgage and ask for a statement of what you owe. Your outstanding balance will be subtracted from the amount you'd receive from the seller. (Any penalty for paying off the mortgage early will also be subtracted.)
  • Have fix-up work done according to the contract so that final inspections may take place.
  • Gather all warranties and instruction books for your home's appliances or major systems to give to the buyer.
  • Once you have a closing date, notify the utility, telephone, water, trash and other services to advise them of your final billing date. Utility companies should make final meter readings on the day of closing.
• Settling up
  
  • Prior to closing, your buyer may wish to make a final inspection (or walk-through) to see that the home is still in good condition.
  • Ask your settlement agent for a copy of the closing costs before closing. This document is known as the closing statement or settlement sheet and will contain most of the charges you'd be asked to pay.
  • You may pay a loan discount fee or service fee. This fee — or points — is a percent of the mortgage amount and charged by the lender to adjust yield to reflect current market interest rates. For VA guaranteed loans, the seller pays the points. Otherwise, they're a negotiable item.
  • Depending on your area and your negotiations, you might pay for charges related to the title such as title insurance or attorney's fees.
  • The buyer will likely pay the fee for recording the mortgage, while you may be asked to pay the transfer fee and the deed recording fee. Other fees, such as settlement agent fees, document preparation, notary services or warranty coverage, are charged for preparation of closing. Discuss which fees you will be responsible for with your sales professional.
  • Typically, you as the seller will pay the sales professional's fee. If two brokers are involved, the fee is divided between them. Your listing agreement will spell this out.
  • After the balance you owe on your mortgage is subtracted from your proceeds, as well as any early payment penalties if applicable, you also may pay a small charge to have the title cleared.
  • You will typically be responsible for paying your prorated share of property taxes and hazard insurance until the date of settlement. If these charges have been paid from an escrow account, you may still have money in your account. Or, if the charges have already been paid in advance, you may receive money back from your lender.
• Closing activities
  
  • Closing may involve more than one settlement activity: closing the property transaction, the buyer's loan and possibly your mortgage.
  • Depending on your local customers, you may attend a closing meeting. An escrow agent may complete the entire transaction. Or, you may be part of group meetings in which you, the buyer, your sales professionals, attorneys, the lender's representatives and the settlement agent meet together or separately.
  • Any issues or questions should be resolved by this time so that both parties can simply review and sign each document.
  • You will sign over the deed to the buyer to convey the title to the property. You should also review the final version of the settlement statement to be sure it is in order.

Finally — it's the moment you've waited for! At the settlement meeting or shortly thereafter, you'll turn over the keys to your house — and be given a check you can take right to the bank.

Selling Tips:

There's really no “best” time to sell a house.
It doesn't pay to play the waiting game. If the housing market is strong, you'll get a higher price for your house — but pay more for your new house. If the market is weak, you might have to take a lower price when you sell — but you should be able to get into another house affordably. The time to sell is when your family and financial circumstances determine it's time.

Presentation Is Everything
Make sure that your home looks ready to be sold. Condition alone can sometimes prompt fast buying decisions. Not only should you fix any defects, but consider upgrading your home by making major repairs and cosmetic improvements before selling. A nice looking home triggers the emotional response that can lead to a financial response. Some things to look for:

• Landscaping - Has the front yard been maintained? Are areas of the house visible to the street in good condition?
• Cleaning or Redoing the driveway - Is your driveway cluttered with toys, tools, trash etc.?
• Painting - Does both the exterior and the interior look like they have been well taken care of? Any fading, chipping, or peeling?
• Carpeting - Does the carpet have stains? Or does the carpet look old and dirty?

A bad first impression can dissuade a potential buyer. Don't show your property until it's all fixed up. You do not want to give buyers the chance to use the negative first impression they have as means of negotiation.

Ask around for the opinions and first impressions others have of your home. Real estate agents who see houses everyday can give solid advice on what needs to be done. Consider what architects or landscape designers have to say. What you need are objective opinions, and it's sometimes hard to separate the personal and emotional ties you have for the home from the property itself.

A few hundred dollars for minor improvements could mean thousands more when you sell your home.

Be Convincing
If you insist on getting your asking price, think of what you can offer to the buyers, for example, improvements you've made, or even offering seller financing at a lower than market interest rate on a portion of the sale price. Convince them why they should be paying the price you have set.

Know Why You are Selling
If you know exactly why you are selling, then it is easier for you to set the right plan of action to get what it is that you want.

If you are a seller who needs to close a sale as quickly as possible, then you should know that getting the highest price possible is not one of your priorities. It does not mean that you won't or cannot get the highest price, but it means that the price is not the deciding factor. A buyer who can give you a quick closing time will appeal much more to you than a buyer who can offer you more money but the negotiation and closing time drag on.

It's always good to know how low you will go, in terms of selling price. This will help to eliminate some of the offers that you find simply offensive or ridiculous. Even though you should consider all offers seriously and take into consideration the terms of each offer, sometimes, if you know the bottom line and are strict about it, you can save yourself time.

Once you know what your limits and reasons are, discuss them with your agent so that they can help you set your goals realistically. If you decide to list your home on your own, make sure you do research on the current market, and you get the proper advice you need in terms of legal issues, etc. The key is to be realistic and to know what your goals are so that they can be met.

Setting the Price
The most important factor of marketing your home is pricing it right. Your price should be adjusted to reflect the market, and the property's worth. The key is to get many people checking out your property at a fair price instead of having no buyers because your price is set to high.

The price is the first thing buyers notice about your property. If you set your price too high, then the chance of alienating buyers is higher. You want your house to be taken seriously, and the asking price reflects how serious you are about selling your home.

Several factors will contribute to your final decision. First, you should compare your house to others that are in the market. When you dicuss your home with your Prudential Radford & Associates, REALTORS,  agent. He/she will provide you with a Comparative Marketing Analysis (CMA). The CMA will reflect the following data:

• houses in your price range and area sold within the current market
• asking and selling prices of houses
• current inventory of houses on the market
• features of each house on the market

From the CMA, you will find out the difference between the asking price and selling price for all homes sold, the condition of the market, and other houses comparable to yours.

Also, try to find out what types of houses are selling and see if it applies to your area. Buyers follow trends, and these trends can help you set your price.

Always be realistic. And understand and set your price to reflect the current market situation.

Finding the Right Agent
List your house with a Prudential Radford & Associates, REALTORS agent who will ensure your house is listed on the MLS, the Internet and within other marketing materials.

Our local professionals can better serve your needs; they are familiar with what the local market condition is, what the local prices are, and what's hot or not in your community

A good sales professional earns his or her fee — and then some.
You can try to sell your home on your own, but you may be overlooking the vast resources available to you when working with a real estate professional.

Consider Offers Carefully
When reading an offer, keep in mind that you are out to get the best price AND the best terms for you. If you focus solely on the price, you may overlook terms that could be favorable to you as a buyer.

Some terms that may work in your favor:

• the buyer will pay for most or all of the closing costs
• the buyer will take care of any repairs
• quick close - the buyer is pre-approved and ready to close in a time that best suits you
• all-cash deal

When reading through offers, remember to look at the whole package. Take the time that you need to assess what is being offered and if it meets your needs.

Insist on a Home Inspection
A professional home inspection protects both you and the buyer. It allows both you and the buyer the opportunity to learn about the property's defects.

A home inspection usually covers the following:

• Plumbing conditions - if there is leakage or clogging
• Roofing conditions - the extent of deterioration, if there is leakage
• Electrical conditions - if there are inadequate circuits or potential fire hazards
• Structural problems - if there are problems with the underlying foundation of your home

As a seller, the home inspection reports protect you because it establishes the actual condition of the property at the time of sale.

If you reap a profit on the sale of your home, you can postpone or be excluded from having to pay income taxes on the gain.
Currently, the taxes on a financial gain — such as selling your home for a profit — can be postponed if you buy a home of equal or greater value within two years after you sell. If you don't buy another home in this time period, that profit will be added to your other income, and you'll be taxed at your regular rate. A one-time exclusion from this taxation up to $125,000 is available if you or your spouse are 55 years old when you sell. Ask your tax preparer for a current update on this deferment/exclusion option before you sell.

Simple, inexpensive selling tools can help a buyer decide to sign a contract on your house.
You can help your home sell faster and easier by giving your sales professional additional information that will set your home apart in the prospective buyer's mind.

For example, sketch the home's floor plan; take photos of your home's features; and gather information on utility bills.

Free Brochures for Home Sellers
Prudential Radford & Associates, REALTORS has information which may be helpful to you if you are thinking about selling a home in the near future.  Contact us today to receive free brochures.

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