Thinking about selling but hesitant because you don’t know what is involved? Here is a summary of what to expect in the home selling process, broken down into 15 steps, with detailed descriptions of what happens during each step. If you have any questions, contact us.
If selling is a choice, evaluate if selling makes sense for you. Talk to a Realtor to get an estimate of what your home might sell for in today’s market and an estimate of what your costs might be. If you plan to buy after you sell, evaluate if you would be able to buy what you need after selling or if it makes more sense to stay put. Keep in mind actual sale price is what someone is willing to pay and what price you are willing to accept at any point in time.
If you decide to sell, choose a Realtor you trust to help you through the process and develop a marketing strategy based on your priorities. Be careful of choosing someone simply because you like the high list price they suggest… make your choice based on knowledge, telling you like it is not just what you want to hear, and someone you feel comfortable with. Your agent will be like your BFF during the process so choose someone you will be happy to spend time with.
Get your home ready for sale based on your priorities and marketing strategy. This step could take weeks, months or even more than a year. Preparations might include decluttering, home repairs/updates, city inspection, cleaning, staging. When you work with the HomesMSP Team one of our services is providing a consultation with a professional stager to work with you to help your home show at its best if that is the route you choose to follow.
Expect to sign a listing contract when you choose a Realtor, but also sign to withhold the listing from MLS until your property is ready to go on the market. At this point you will sign more paperwork including MLS listing information, and prepare your Seller’s Disclosure Statement required by the state of Minnesota telling about the condition of your property. You must disclose anything that may affect a buyer’s use and enjoyment of your home. Complete any city required repairs for Truth-in-Sale-of-Housing (TISH) and obtain a Certificate of Compliance from the city unless you plan to sell AS IS and require the buyer to assume any required repairs.
Prepare your home carefully, and hire a professional photographer to photograph your home (the HomesMSP Team does that on your behalf). With over 90% of buyers shopping online, professional photographs of well staged rooms are critical. These photos can be used for multiple marketing pieces, such as your MLS listing, virtual tours, a website for your home, flyers for open houses, social media, online search engines such as Zillow, Trulia and Realtor.com, direct email and snail mail. Install a For Sale sign, go live in the MLS and other online search engines, and let the showings begin!
Offers may come in with terms not acceptable to you… or you may get multiple offers that seem almost too good to be true. When reviewing offers be sure to consider all the terms, not just the price. Factors such as closing date, contingencies, seller contribution to closing costs, earnest money, buyer financing terms and lender, inspection requirements all play a role in selecting the buyer with whom you choose to work. Select a buyer you feel confident will make it to closing and negotiate terms.
The initial weeks following offer acceptance are critical. This is when the buyer submits earnest money and buyer inspections are conducted. Buyers may re-negotiate terms or cancel following the inspection… which means you do step 6 over again. If the sale is contingent upon the sale of another property, this could also take you back to step 6 if the contingent property doesn’t sell. This is where your choice of buyer (if you have a choice) can be critical. Select a buyer (and agent) who are responsive, committed to the property and show a desire to work together to a successful closing.
At this point you have passed city inspections if required, and your buyer’s private inspection if they elected to have their offer subject to inspection as more than 90% of buyers do. Expect one more outside visit to the property… for appraisal of the value of the property. This is required for a mortgage, sometimes also included as a requirement for cash buyers. If the appraised value comes in lower than sale price you could have a problem which may require further negotiation… or cancellation of the agreement and back to step 6 again. This is where a price that seems too good to be true could truly be that!
Title work for the transfer of the property is required whether your buyer is paying cash or securing a mortgage. The title search for any defects in the title is conducted by the buyer’s title company in Minnesota. Most of the time this is easy, but sometimes clouds appear in the title such as unpaid liens, unrecorded mortgage payoffs, ownership and other issues. If you purchased an owner’s policy title insurance when you purchased the property the title insurance company deals with this. If not, you as the seller must clear these issues yourself before you can close on the sale of your property.
Although not required, it is recommended that you set a final approval date 1-2 weeks prior to closing so there are no last minute surprises. Once received, buyers forfeit their earnest money if they cancel the transaction for any reason.
Once you pass appraisal it is usually safe to pack in earnest and make your moving plans. Keep in mind moving companies tend to be busiest over the weekend and at the end of the month… plan ahead.
Contact your utility companies and tell them your closing date and the name of your buyer. Your buyer must also contact them to effect the transfer. The water bill is most important, because it stays with the house not the owner. Order the final water reading for the final water bill for your closing date. Don’t be surprised if your buyer’s title company includes an estimate to be paid at closing. If they collect more than the actual amount due you will receive a refund from the utility company.
Your home is to be empty and clean at time of closing unless your purchase agreement specifies differently. Sometimes sellers leave leftover paint for the buyers, but not all buyers want it… be sure to check with your buyers before leaving ANYTHING not specified in the purchase agreement.
Buyers usually do a final walk through before closing to make sure your home is in the same condition as when they signed the purchase agreement… and that any repairs agreed to in the purchase agreement have been completed. This usually takes place shortly before closing, preferably after you have moved out and given your home a thorough cleaning.
Closing is where you sign papers transferring the deed to the new owner, your mortgage is paid off if you have one, you turn over the keys to the new owners, and you receive the proceeds from your sale. It usually takes about an hour. It is possible for sellers to pre-sign if you will be unavailable at time of closing, but you will likely have to assign Power of Attorney to someone who will attend closing for final signatures, often your Realtor.