Owning & Renting Property

A Guide to the Home Selling Process

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Not sure how to sell your house? You’re not alone.

In a perfect world, selling your home would be as easy as a smile and a handshake. Until then, it takes careful planning, an understanding of the process and a lot of patience with paperwork. Here are six fundamental legal, business and financial steps involved to help your home-selling process go a little more smoothly.

1. Know your responsibilities and costs.

The costs generally associated with the sale of the home include:

Listing the property for sale (usually on the Multiple Listing Services, or MLS, for maximum exposure in your market).

Hiring a real estate agent and paying commission.

Paying any agreed-upon closing costs.

Making potential repairs as requested by the buying party.

As you get ready to sell, one of the first decisions you’ll want to make is whether you want to hire a real estate agent to help you sell, or if you want to go the sell by owner route. Keep in mind that if you decide to sell your house yourself, you’ll be responsible for showings, dealing directly with potential buyers, completing all the needed paperwork and more.

2. Set a price.

Pricing your home sale right is part science, part marketing and part instinct. Ideally, you want to get the maximum price and the best terms during the window of time when your home is on the market. Several factors come into play, including market conditions and interest rate, but as a general rule, sale prices are based on:

How much similar properties in the same area have recently sold for (called "comparables").

The supply and demand of your area, based on the local economy.

A fair market value of the home, based on an appraisal.

Owner needs (e.g., you might want to sell quickly, so this will affect how you price your home; if you’re wondering how to sell your house fast, setting a lower price will definitely help).

In addition, as the seller you could have an appraisal of the home performed to establish the fair market value of the property.

3. Show your home.

There are several simple and relatively inexpensive steps you can take so your home looks as inviting as possible to prospective buyers:

Spring for a quick spruce up. Make sure a small cosmetic or mechanical glitch doesn’t become a large issue. It could be as easy as replacing a toilet paper holder or fixing a squeaky front door.
Clean up clutter. Having the “lived-in” look is more of a distraction than a selling point for your home. Clearing off tables and cleaning out closets, for example, help show how much space your home offers.
Protect your private info. Chances are you’ll have several potential buyers parading through your home. Lock away valuable items and keep personal information (like mail or private documents or photos) out of sight.

4. Negotiating offers.

As the seller, you can either accept or deny an offer, or make a counter-offer indicating what needs to change to be acceptable. The buyer can then accept or refuse your counter-offer, or make another counter-offer to the new terms. Some important tips to keep in mind:

The offer doesn't become binding until both parties agree to the terms and sign the “offer to purchase” contract, subject to contingencies.

The contract should contain an expiration date, purchase price, initial deposit, buyer down payment, financing terms and contingencies, warranties and fees.

Generally, your sales contract will include a clause that allows the buyers to do a walk-through inspection of the property within 24 hours prior to your closing.

5. Prepare for closing.

A lot of procedures need to take place before you can complete or “close” the sale of your home. These steps usually include:

A home inspection where an inspector will do a thorough examination of the physical structure and systems of a house.

A title search to verify you really own the property and there are no other claims to the property.

A property survey, which is a technical drawing of the property and its structures.

A septic certification and well testing, which is required in some states if your property has a septic tank or a well.

A final walk through where the buyer is allowed to inspect the home within 24 hours prior to closing.

Disclosing to the buyer anything that may interfere with their decision to purchase the home.

6. Attend the closing.

Closing is the final step in the process. During the closing, the deed is delivered to the buyer, the title is transferred, financing documents and title insurance policies are exchanged, and the agreed-on costs are paid.

Some of the final documents, including the deed and mortgage or deed of trust are signed by the appropriate parties, and then delivered to the county recorder to be recorded. Keep in mind what you may be required to pay at closing:

Closing costs, such as agent commissions, loan fees, title insurance charges and recording filing fees

Transaction taxes and other fees

Need added assistance? Hire a real estate attorney.

Consider hiring a real estate attorney (which is different than a real estate agent) if you need help throughout the process, or if your state requires it during the closing. He or she will:

Attend the closing and review all the papers you will be required to sign.

Help both parties understand the sales contract and mortgage loan.

Run or review a thorough title search to make sure there are no covenants, easements, liens, etc. registered against the property that will prevent the new owner’s use of it.

Prepare and record all the legal documents.

Evaluate any adjustments, including taxes owing and utilities costs paid, prior to the transaction closing.

Ensure validly registered ownership subject only to the liabilities you have accepted.

Have patience and ask questions.

Remember, your home is a valuable asset. And you deserve to get the most out of your investment. But learning how to sell your own home can take some time.

Be patient, and follow up with your realtor if you’ve enlisted one. Ask questions if you don’t understand something, and stay the course so you can have the satisfaction of planting that “sold” sign in your yard.