You have an agent, you’ve whipped your house into dream-home shape and your carefully crafted listing is live. Now that you’ve done all of the heavy lifting, it’s time to turn “for sale” into “SOLD.”
There are so many intricacies involved in the home-selling process after your home goes on the market and before you seal the deal. We’re talking negotiations, appraisals — and let’s not forget about the mountain of paperwork.
Here’s a step-by-step look at what to expect in the final stages of the home-selling process.
Prepare Your Home
You’ve already cleaned and staged your home for professional photos to accompany your listing, but now you’ll need to stage your home again to prepare for in-person showings and virtual tours for buyers shopping from out of state and even abroad.
Hopefully your home is still pristine after you took on deep cleaning and decluttering each room in your house. This time around, visitors will be opening kitchen cupboards, walking through each room and scrutinizing and taking photos from every angle.
You may need to hire a professional stager if you need the extra help; they’ll have furniture and statement art and design pieces to elevate the look of your home. Staging your home is especially important if you’ve already moved out and your home is empty. When potential buyers visit your home, they should be able to picture themselves living a beautiful life in your space. Proper staging helps sell them this image.
Show Your Home
If you’re still living in the home, you’ll need some patience and flexibility when it comes to showing your home. Your listing will ideally attract lots of interested buyers who will ask for a walkthrough. At this step, you’ll need to communicate closely with your agent about when you’ll be out of the home so they’re free to do showings. You and your family members — and even your pets — shouldn’t be home during viewings so prospective buyers can ask questions and wander through the home comfortably.
Prior to each showing, make sure to put away personal belongings and re-stage the home. You don’t want prospective buyers to visit a home that smells like your cooking, or has an unmade bed or a bathroom with toiletries strewn about. It may easier to earmark a few evenings each week for eating out after work, so your agent has the home for the night for showings.
Decide with your agent if you prefer to organize viewings by appointment only so you can prepare before a viewing each time. Your other option is to provide your agent with a lockbox or keypad so they can enter the home for viewings throughout the day. This makes the logistics a lot easier, but it means you’ll need to reset your home each time you leave in case your agent has an impromptu viewing.
Your agent will also work with you to consider hosting an open house to see if this is a strategy worth deploying.
Field Offers and Negotiate With Buyers
If you’ve played your cards right with marketing your home and pricing it appropriately, the offers should start rolling in. It could happen as soon as your home hits the market, after just a few showings or after a few weeks of private appointments.
An offer will include the amount the buyer is willing to pay, requests on dates for closing and taking occupancy, and any contingencies, such as a satisfactory home inspection.
If you receive multiple offers, you’ll have some leverage with buyers. However, the highest bid may not be the best choice. One offer may be the most generous, but it could come with some key caveats, such as being contingent on the sale of their current home or their ability to finance the property. If this buyer can’t sell their house or can’t qualify for the mortgage, you could be back to square one. Your agent can help you look at the strength of each offer, taking into account what’s in the fine print, but you’ll have the final say.
To protect yourself, you can include a “kick-out clause” into your agreement. This clause allows you to keep showing your home and accept another offer if it comes without as many caveats.
If you receive an offer that’s too low, don’t be afraid to submit a counter offer to get the negotiations going. Sometimes buyers test the waters to see how receptive you are to going below your asking price. If a buyer isn’t happy with your counter price, they could suggest another compromise until you’re both happy. If you don’t receive any offers, you’ll need to regroup with your agent on your next steps, as you don’t want your home to sit on the market for too long. Based on feedback from viewings and open houses, you may learn that you need to make improvements on staging your home, that you’ve priced your home too high, or that the timing just isn’t right.
Open Escrow and Hire a Title Company
Once you’ve signed an offer you’re happy with, your agent will open escrow and move you into the stage of hiring a title company. This step is called the option period. Escrow is a financial arrangement that uses a neutral third party to secure taking payment of funds. With large amounts of money and property involved while some contingencies are still in place, payment is held in a secure escrow account and is released when the agreement is seen through by both parties — the buyer and the seller.
Title companies take care of the escrow account along with all of the nitty-gritty details that need to be ironed out, such as the title policy and insurance policies, as well as facilitating your closing. While your agent may suggest their go-to title company, you can do your own homework to select a title company of your choice. Ask the companies about their services and pricing so you know what to expect.
With your house in escrow, the title company will source your title report to confirm you’re the legal owner of the home. Road bumps are commonplace here and you may need to recruit a real estate attorney to help you resolve any issues with your title report. The title company will also ask you to fill out or provide more paperwork, such as a grant deed, state specific forms and property information statements. Between your agent and your real estate attorney, you should have a supportive team around you to ensure you have the right documentation on hand.
On the other end of the transaction, your buyer will send a deposit to the escrow account in good faith to keep up their end of the offer. This deposit will be applied to their closing costs if the contract moves forward. Your buyer will also need to work with their lender or mortgage broker to get their financing in line.
Your title company will act as the liaison to help both parties select a date to close. This is usually based on when your buyer’s loan will go through.
Get Your Home Appraised
More likely than not, your buyer will need to take out a mortgage to pay for their new home. To determine your home’s market value, they’ll need a third-party appraisal. You’ll need to schedule an appointment for the third-party appraisal and make sure your home is putting its best foot forward. The appraiser will walk through your home and research the home’s location, its condition and how much similar homes (comparables or “comps”) have sold for in the neighborhood.
The appraiser will send your buyer’s lender the final report with their estimation of your home’s value — this will help the lender decide how much to approve for your buyer’s loan.
Traditionally, homeowners aren’t entitled to see the appraisal. If it turns out your home received a low appraisal, you’ll need to consult with your agent about next steps. Your buyer could ask to renegotiate your deal or walk away altogether. Check on what contingencies are in your contract to see if either of you have leeway if you get into this tricky situation.
Get Ready for the Home Inspection
On top of the appraisal, your buyer will likely ask for a home inspection within 10 days of going into escrow to receive professional assurance that they’re making a sound investment. This could be in your contract’s list of contingencies.
Ideally, you’ll have had a pre-listing inspection during the early stages of your home-selling process, so you’ll know in advance what to expect. You may have even resolved any issues that were found. If this step is completely new to you, however, your agent can provide you with a home inspection checklist to help you prepare.
A home inspector will look at the condition of your home’s structure, roof, electrical system and plumbing. They’ll study your home’s interior and exterior for defective, hazardous or mechanical issues throughout your property. They’ll also check for termites and pests. The inspection usually takes about three to four hours to complete.
Just like the appraisal, the inspector will produce a report outlining what was inspected and what requires repair. Your buyer should receive a report within four to five business days. Don’t be alarmed if your home inspection comes back with some repairs to follow up on; we’ll discuss ways to handle that situation in the next section.
You’ll also deliver your seller disclosures at this time. Homeowners, by law, must provide a full disclosure of issues they encountered while they lived in the house that may affect the home’s property value or appeal. For example, homes built before 1978 need to disclosure whether there is lead-based paint. You should have a state-specific form filled out and ready to provide to your buyer. The buyer will need to sign and date the form to acknowledge receipt.
Negotiate on Repairs and Get the Home Move-in Ready
Once you have the appraisal and inspection report on hand, you and the buyer can negotiate on any repairs that need to be made. The inspector could have flagged a major repair that could cost your buyer thousands of dollars to fix. In response, you could offer to provide a closing cost credit to offset the expense.
You don’t have to accept every request the homebuyer is making, but you should aim to come to a compromise, otherwise your buyer may ask to renegotiate on price or pull of out of the sale if they have wiggle room in the contract. It’s worth noting that most contracts have the home inspection as a key contingency – if your home inspection leads to several glaring issues, this could be grounds for your buyer to abandon the sale.
Once you come to an agreement, ask your buyer to release any remaining contingencies on the contract. If the sale was pending an appraisal and home inspection, your home has made it through these checkpoints.
You’ll need to make sure you’re all moved out before your closing date and so the buyer can do a final walkthrough. Do your part to get the home tidied up and move-in ready. Make sure to settle any outstanding debts and accounts you own that are tied to the home, such as HOA fees, unpaid property taxes and utilities bills, and don’t forget to redirect your mail.
Sign the Title and Close Escrow
You’re nearing the finish line now! At closing, both parties will sign all of the paperwork needed to complete the sale. The title to your property is officially transferred to the buyer and you’ll hand over your sets of keys. (Don’t forget the mail key and the garage door code too.)
In return, payment for your house is processed — your title company will take the funds to pay off the remainder of your mortgage on the house, along with any transaction costs and commissions to the company, your agent and your attorney. The remainder is deposited straight to your account or provided to you in a check.
Crucial documents like the loan papers, deeds, insurance policies and property tax bills will also be prepared and signed off on, and the transfer will be filed with your local municipality’s records office.
While the closing process is formal, it can take place in person or by mail. In some states, it’s commonplace for the seller to presign these documents, with the buyer meeting with their agent in person for these last steps.
And after a months-long journey, you’ve made it through the home-selling process. Congratulations, you’ve just sold your house!
Carmen Chai is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. She started her career in journalism writing about crime and local news for the Toronto Star, Canada’s largest daily newspaper. After that, she covered a variety of subjects from federal politics in Ottawa to the 2015 attacks in Paris. She has also worked as senior health reporter for Global News and as now the Parliamentary Affairs Manager for UK Research and Innovation. For NewHomeSource, Carmen covers a variety of topics, including insurance, mortgages, and more.