You’ve decided to sell your home, but before you get that “for sale” sign up, or select the perfect buyer, there are some things you should know, to be sure the process is a success.
1. Assess your home’s value
Your realtor will decide on the list price for your home, but before you even meet with your agent, you can get a ballpark figure for what it might be worth. HomeLight’s Home Value Estimator is a great place to start, and from there you can work through a Comparative Market Analysis to compare your home to other similar properties in your area.
2. Get to know your agent
Once you get serious about selling your home, you’ll want to hire a professional who knows your city, town, or even neighborhood, and can advise you on current market conditions. You can start by asking friends if there is someone who they have used recently and would recommend.
3. Understand what needs to be repaired
You know the quirks that you have gotten used to in your home — like a squeaky bathroom door, or creaky hallway? Well, they may not be so appealing to a potential buyer. Go through each room (and outside too), and make a list of simple repairs.
4. What needs to be deep cleaned?
Deep cleaning will give your home that extra glow. You can hire professionals, or tackle the job yourself, leaving no surface untouched, especially windows, bathroom grout, and cobwebs on ceilings.
5. Take stock of what you don’t need
Before you even look for an agent, you can start adding lightness to your home with decluttering. Make an honest assessment of what you need, want to donate, or can put in storage. Marie Kondo is a decluttering expert who can guide you with her KonMari method.
6. How will your home perform on the stage?
Your home may be a comfortable haven for you and your family with toys in the living room and a home office in the kitchen, but that may not appeal to everyone. Professional stagers know the characteristics that can make your home an inviting space, or you can follow DIY home staging tips, like adding neutral accents and live plants and flowers and creating light with open windows or lamps.
7. Assess your curb appeal
The first few seconds when a potential buyer sees your home could mean the difference between them continuing through the front door, or moving on — that means curb appeal, or how the front of your home looks, matters. Trimming hedges or trees, mowing the lawn, and adding a fresh coat of paint to your front door in a pop color, are a few curb appeal ideas to start with.
8. Find an experienced photographer
Once you get your home camera-ready, you’ll need to find a photographer who can show it off. These photos will be useful for online listings (where nearly 90 percent of buyers are said to begin their home search, according to the National Association of Realtors), social media, and print advertisements.
Are you looking for a move in ready home? Then this is the home for you. Starting outside, you will love the low maintenance landscaping and the new garage, patio, gutters, soffits, leaf guards and driveway. The updated don't stop there. There is a newer A/C, carpet, refrigerator, stove, window treatments, updated bathroom, and 1st floor laundry. Other features include eat in kitchen with plenty of counter space, large windows in the huge living room and hardwood floors in the bedrooms. Best part is all the stores, restaurants, school and more that are within walking distance of this home. You can visit hot spots like Houdinis, Stone Arch, Pullmans, Riverview Gardens, Downtown Appleton and much more!
Usually at this point, all that’s left to worry about is loan approval for you. You should have been in frequent contact with your lender, who updates your real estate agent on the status of the approval. Loan approval means that you have provided all of the documentation required by the lender and that the lender is satisfied that you have the resources to purchase and make mortgage payments on your home .
It’s now time for “closing.” Closing is the ceremony where ownership of the home changes hands and you become a homeowner. Closing protocol varies significantly around the country. You may actually meet the seller and sign your paperwork together, or you may sign separately. Either way, the actual closing is usually rather anti-climactic; you pretty much just sit at a table and sign dozens of documents.
Depending on your contract with the seller, you will either get possession of your new home immediately after closing, or a few days later. In some markets it is customary to allow the seller three days to move out after closing without a rental agreement because they may be purchasing another home with the proceeds of your sale. You will arrange for utilities to be placed in your name as of the date of move-in, not necessarily the date of closing.
As you probably know, moving requires a lot of patience and planning. Be prepared for unexpected “surprises” during move in, such as door knobs falling off, or light bulbs all burning out. It’s just all part of the adventure!
Making Sure You Receive Clean Title for Closing...
When property is sold or refinanced, the lender and/or buyer needs a preliminary title report to see exactly what liens and encumbrances are against the property. Items that a preliminary title report show include:
Easements of record
Restrictions, covenants, and conditions
Liens and/or judgments
Exact vested owner of record
When the sale of the subject property is final and the title company has recorded the necessary documents, they then will issue a policy of title insurance to the new lender and the buyer showing clear title to the property.
It’s Time For The Lender To Check The Value of The Home...
After the inspection, the next hurdle is the appraisal of the home. The purpose of the appraisal is to prove to you and your lender that the house is worth what you have agreed to pay for it. Usually, the appraisal will indicate a value very close to the purchase price.
In the event that the house “appraises” low, (e.g., you are under contract at $205,000 and the appraisal comes in at $195,000), the seller is in a sticky situation. The lender will only lend on the appraised value.
There are three ways to resolve this problem:
The seller can agree to a reduced price,
The buyer (you) can pay the difference between the appraised value and purchase price (ugh!), or
You can back out.
Your real estate agent will advise you in this situation.
The next step is to professionally inspect the house. Your real estate agent will probably recommend a few good inspectors for you to hire, but the final decision is yours.
The purpose of the inspection is to:
Inspect the major systems in the house (heating, roof, electrical, plumbing, structural) to discover serious problems, and
Educate you about maintaining a home.
The inspection will take 1 ½ to 3 ½ hours and you should try to be present. The cost of the inspection is your responsibility (typically $200 - $400).
An inspection is NOT a warranty of anything and inspectors are not usually experts in any one area. If a major system in the home looks suspicious to the inspector, he may recommend further investigation on your part (e.g., a roof, electrical or furnace certification). It will be your decision to pay or not to pay for further inspections or certifications.
After the inspection, you have the right to ask the seller to fix major problems. Sometimes (depending on your financing), you can ask for an allowance to fix something yourself. The seller can agree to your request, counter back or reject your request. As long as you are reasonable, the inspection process does not have to be a difficult negotiation. Try not to overwhelm the seller with a laundry list of minor repairs.
REMEMBER, the purpose of the inspection is to identify serious problems. Leaky faucets, cracked tile, or ugly carpet are not items that should scare you away from purchasing a home, nor are they items that you should expect the seller to fix. Your real estate agent will help you through the inspection.
If you’ve made it through the inspection, breathe a sigh of relief. The hardest part may be over!
It’s easy to make sure the home you’ve chosen is a smart buy. By having a home inspection, the home’s vital systems are checked. A home inspection allows you to purchase your home with confidence. Fox Cities Home Pro will help you set one up after you have chosen the home you like. We recommend the following minimum standards when choosing an inspector:
1. Membership in ASHI (American Society of Home Inspectors) and Adherence to its Standards of Practice and Code of Ethics.
2. A written report at the time of inspection.
Items on your home inspection report will include:
Foundations, Basements, and Structures Basement floor and walls, proper drainage and ventilation, evidence of water seepage
Exterior Siding, Windows, and Doors, Exterior walls, porches, decks, balconies, and garage
Roof, Roof type and material, condition of gutters and downspouts
Interior Plumbing System, Hot and cold water system, the waste system and sewage disposal, water pressure and flow, and hot water equipment
Electrical System Type of service, number of circuits, type of protection, outlet grounding, and load balance
Central Heating System, Energy source, type of cooling equipment, capacity, and distribution
Interior Walls, Ceilings, Floors, Windows, and Doors, Walls, floors, ceilings, stairways, cabinets, and countertops
Attic, Structural, insulation, and ventilation information
Fireplace, Chimney, damper, and masonry
Garage Doors, walls, floor, and opener
Appliances Built-in and other home appliances, smoke detectors, and television/cable hookups
Lot and Landscaping, Ground slopes away from foundation, condition of walks, steps, and driveways.
At the time your offer is accepted, you will be required to make a deposit in the form of a personal check or cashier’s check. The amount deposited will be kept in the trust fund account stated in the contract or to the seller. This money represents your sincerity in the attempt to purchase and is fully refundable if your loan is not approved, or if the seller does not meet some other condition of the contract. You should anticipate a minimum of $1,000 for homes under $100,000.
In homes over this price range, expect to deposit one to five percent of the purchase price. The check will be made out to name stated in the contract. This earnest money will be credited to you at closing as part of your down payment and/or closing costs, if it exceeds those amounts, the balance will be refunded at closing.
You Will Officially Apply For Your Mortgage
Now that you have an accepted offer, you will meet with your lender within 2-3 days to officially apply for a mortgage loan. The application normally takes about one hour. At this time, you will be required to pay in advance for your credit report (usually $60-75) and the appraisal (usually $350-450). This is required by the lender to determine that the amount of the loan does not exceed the value of the property. These are normally the only charges required by the lender prior to the closing.
Your loan originator understands your concerns and is there to help with the approval of your loan. Feel free to ask questions at the loan application about anything that you do not fully understand. Also, you will receive a GOOD FAITH ESTIMATE OF CLOSING COSTS at this time so you won’t have any surprises at the time of closing.
Total time from loan application to loan approval averages between 20 and 45 days or more depending on the loan type, market conditions, and/or the complexity of verifying the borrower’s information and qualifications.
You and your real estate agent will “write an offer” or a “contract” to purchase the house. The contract will outline the terms of your offer (The amount you are willing to pay, Financing terms, any personal property specifically included, Loan commitment date, Closing and occupancy date, and Other contingencies, including inspections). Your agent should spend at least an hour going over the contract with you.
Your real estate agent will immediately present your offer to the seller’s agent. Typically, the seller has 24 - 48 hours to think it over and respond. During this period, you may rescind your offer at any time. Be aware that there is no first-come-first-served law - the seller can entertain other offers that come in after yours, prior to acceptance of yours.
Then...You wait...it’s harder than you think!
By the deadline, the seller will one of four things:
- Accept your offer as written (yahoo)
- Counter” your offer with changes (to price, terms, dates, etc.)
- Reject your offer.
- Ignore your offer (yes, this is rude).
Your real estate agent will advise you on a plan of action in each of the above scenarios.
Let’s assume your offer was accepted (you are now “Under Contract” or “In Escrow”). The next two weeks will be busy, so be prepared to be distracted. You will need to have some flexibility in your schedule for the inspection and a meeting with your lender.
Spend some quality time with your real estate agent discussing your “must haves”, your “would really like to haves” and your “absolute no-no’s.” Your agent will tell you up-front if you’re being realistic or not. There seems to be an unwritten law that your perfect house will stretch your comfort level a bit, so be prepared to either compromise on your “must haves,” or spend a little more than you’d like. Many first time buyers find that they adjust their expectations quickly.
A real estate agent makes looking for a house easy and hopefully fun. You’ll set up a time to get together (2 - 4 hours) and decide ahead of time which available houses you want to see. Your real estate agent will set appointments to “show” the houses to you and hopefully the sellers will leave during your showing to give you privacy.
Don’t be surprised if you dislike most of the homes you see; it sounds like a cliché, but you will know “your” home when you see it. It may take several trips to find it, so try not to be discouraged. New listings come on the market every day; your real estate agent should be updating you several times a week.
Application Fee: Fee charged by lender to pay for the fixed costs related to mortgage loan processing, such as appraisal, credit report, and underwriting.
Closing Fee: The fee charged by the agent who prepares the closing documents and closes the loan on behalf of the lender.
Commitment Fee: This is often called an origination fee and is generally computed at 1% of the mortgage amount, or an amount as charged by lender.
Discount Points: Each point is equal to 1% of the mortgage amount. Points are used by the lender to adjust the yield on the mortgage when it is sold to an investor. By paying more points, the borrower can obtain a lower mortgage interest rate.
Funding Fees: Normally applicable on VA loans only, equal to a percentage of the loan amount. The fee is due at closing or may be added to the loan amount and financed.
Homeowner’s Insurance: One-year premium is due in advance of the time of closing.
Mortgage Insurance: Insurance required by the lender when the down payment is less than 20%. In the case of loan default, this insurance reduces the lender’s loss.
Pre-Payables: Adjustment to escrow accounts from the date of closing to the date of the first payment. Interest is paid through the end of the month of closing; taxes are paid through the end of the month of closing, plus the following month. Two months of PMI may be collected. Two months of homeowner’s insurance may be collected. A homeowner’s insurance policy must be provided along with a receipt showing that the first year’s premium is paid.
Processing Fee: Fees charged by the escrow processor (either working for the escrow company, title company, or real estate company) for administrative escrow services performed from the point-of-contract through closing.
Recording Fees: Fees charged by state and municipal entities for entering the closing documents into the public record.
Survey Fee: Fee usually required and used by the lender to check for encroachments from within or from outside the subject property.
Title Insurance: Provides protection for lenders and homeowners against financial loss resulting from legal defects in the title.
Underwriting Fee: Fee usually included in the application fee, although practices do vary from lender to lender.
Flood Certification Fee: Lender must determine if the home requires flood insurance.
Tax Service Fee: A one-time charge collected at closing which arranges for the payment of real estate taxes from the borrower’s escrow account to the taxing authority or verifies payment to the taxing authority.