SterlingResidential.com | Buying & Selling Residential Properties in Texas | Houses for Rent Houston Area | Humble Atascocita Kingwood & Spring Texas Realtors | Sterling Residential®, Realtors® | Real Estate Broker: The Home Selling Process

In 2006, during a robust home sales market, almost 90% of sold homes were MLS-listed, 88% percent of home owners were satisfied with the selling process, and brokered home sales brought 16% higher prices than homes sold by-owner. These National Association of Realtors survey statistics illustrate that brokers get the results most wanted by home sellers – a closed sale at the right price, while providing a satisfactory selling experience.

Why are home sellers among the most satisfied consumers? For one, brokers have embraced internet advertising, making their listings available across a broad marketplace. Internet usage among consumers and brokers has exploded in the last ten years, providing an accessible and convenient platform to advertise homes for sale. Homes are viewed across the globe on MLS sites and email communications are made in an instant. MLS Internet listings, available only through MLS-member brokers, have been a real boon for home sellers.

Even with new marketing technologies, home selling basics remain the same. Preparing, marketing, and selling your home sale is an important undertaking requiring some decisions on your part. As you go through the process, you’ll have questions and face critical decisions affecting the sale of your home.

Home Selling Questions You May Have

• Should I sell myself or list with a broker?
• What do I know about market pricing?
• What home documents should I gather before listing?
• What property conditions require disclosure?
• What preparations should be made before listing?
• What repairs are needed before listing?
• How do I prepare my house for showing?
• How do I advertise my home for sale?
• What do I need to know about offers?
• When will the home inspector arrive?
• Do I have to make buyer-requested repairs?
• What do I know about contracts?
• When will the closing occur?
• What documents do I sign at closing?
• When do the buyers get possession?

For sale by owner (FSBO) or broker listing?

FSBO selling requires effective marketing and pricing, showing, screening buyers, negotiating purchase contracts, coordinating inspections, managing deadlines and contingencies, and reviewing expenses and closing documents. During strong seller markets, FSBOs benefit from higher demand and increased buyer traffic. When markets conditions favor buyers, FSBO selling requires more aggressive marketing and competitive pricing. In today’s market, most home buyers are broker-represented, and FSBO sellers should determine whether to offer compensation to buyer brokers contacting you on behalf of their clients.

Employing a listing broker provides leverage in a competitive market. Listing brokers explain the selling process and navigate you through the traps and pitfalls. Listing brokers will help you make selling decisions, determine a competitive price, represent your interests, and advertise your listing —- essential exposure in a competitive marketplace. Listing brokers manage the home sale, while you concentrate on life’s other priorities.

Pricing is vital to your marketing strategy

Setting a competitive price generates volume traffic at the beginning of the listing period when interest is highest. Listing brokers are a valuable source for current market information. Using a comparative market analysis, listing brokers analyze MLS activity for similar homes that have been listed, sold, or withdrawn from the market. Today’s buyers are usually represented by brokers, giving them access to sales comparables — and setting a competitive price upfront will attract more buyers to your home.

Prepare your selling documentation and seller’s property disclosure

Buyers make quicker buying decisions when they have access to good information. Taking the extra step to assemble a file of your home’s documentation before listing your home will save time later when questions arise. Include closing documents like your previous title insurance policy, existing survey, inspection reports, and insurance policies including any claims records. It’s also helpful to include information about utility providers and monthly expenses. Additionally, information about your homes systems and appliances is important and should include information on HVAC, pools, spas, sprinklers, security systems, specialty wiring or other amenities important to buyers. Finally, you should include information about repairs, maintenance, upgrades, remodeling, or additions, particularly information about costs and building permits.

Texas also requires a seller’s property disclosure. In today’s marketplace, it’s no longer caveat emptor, but rather caveat vendor —- seller beware. Most litigation between buyers and seller’s involves property condition issues. Sellers are required to disclose known defects listed on the seller’s property disclosure. Even when selling your home “as is”, disclosure of known defects is required. As part of the listing agreement, your listing broker may request additional disclosures regarding your property’s condition.

Complete your home preparations and repairs before listing

Are there fixtures attached to the property that you do not intend to sell with the home? Light fixtures or chandeliers, lawn furniture, children’s outdoor equipment, storage sheds, shelving, or other attachments that could be mistakenly included in the sale should be explicitly itemized and excluded in the sales contract, or removed and replaced prior to listing. The TREC purchase contract includes an extensive list of items included in the sale and should be carefully reviewed prior to accepting a purchase offer.

Prematurely listing your home before cleaning, maintenance, and repairs are completed could be a costly mistake. In any market, the best prepared properties often sell faster and for more money. Save time and money by giving the home a thorough cleaning. Handle any deferred maintenance and repairs early, and eliminate those negotiating points before the buyer’s inspector points them out.

Stage for showings by focusing on the home’s strengths. Maximize the curb appeal with an inviting front entry —- fresh paint and landscaping work well. Clean out garage storage and clutter for an organized look. Inside the home, remove extra furniture and belongings to create a spacious flow for buyers to easily walk through. The home should look lived in and welcoming to interested buyers. Vacant homes present a challenge because they lack that “lived in” look. Consider some simple staging with furniture to give the rooms a sense of proportion.

The MLS & Realtor network promotes your home to a global market

If your broker is an MLS member, your home will immediately receive exposure brokers and buyers across the internet. Cooperation with other brokers is essential, and compensation is recommended for buyer brokers bringing you offers from qualified clients.

According to NAR surveys, the most effective marketing activities include yard signs, digital photos or virtual tours, broker and public open houses, property flyers, and print or direct-mail advertising – strategies employed by your listing broker to promote your home.

Showing your home and making a great first impression

Comfortable buyers will stay in your home longer, providing you the best opportunity to make an impression. If ill at ease, buyers will walk in, through, and out. Don’t miss the opportunity to positively influence their first impression. It’s a crucial moment because many buyers are influenced by a gut feeling, and are asking, “Could this be my home?” Remember, brokers are required by law to make your property available to buyers regardless of race, religion, national origin, sex, disability or familial status.

Make the buyer’s showing experience the best possible. Kennel pets during showings. Make yourself scarce, giving the buyers and brokers time to leisurely view the home. Turn on lights, open drapes and blinds, and make the home as comfortable as possible. Security is an issue and you should take prudent precautions to remove valuables, collectibles, or medications. Some precautions recommended by the Texas Association of Realtors include:

Secure your home for showings

Change your phone message
Never leave a message on your answering machine telling callers you are not at home. Never discuss your personal schedule or habits with potential buyers.

Get contact information
Never set an appointment with anyone to see your home unless you have their name and number and have called back to verify that number. It’s better to refer inquiries to your broker.

Remove valuables & medications
Remember to remove keys, credit cards, jewelry, and other valuables from the home or lock them away during open houses.

Check your home after showings & open houses
After a showing or an open house, check all the windows, doors, and other entrances to make sure they are locked.

Receiving purchase offers and understanding important contract provisions

When you receive an offer, you may accept, negotiate, or decline the offer. You may consider multiple offers in any order. Purchase offers contain many terms and conditions including price, financing terms, cost sharing, deadlines, duties, contingencies, notices, and legal remedies for contract defaults. Your listing broker will explain the contract provisions, but any legal questions should be directed to an attorney of your choosing.

TREC purchase agreements include important contingencies, among them a negotiable buyer’s option to terminate. If the contract terms include a termination option, the buyer retains the unrestricted right to terminate the contract in exchange for a payment to the seller. Most buyers schedule inspections and negotiate repair requests during the option period.

Once all parties have signified their agreements in writing, with signed and dated documentation, it becomes a legally binding contract. The purchase contract is delivered to the designated title company with any earnest money payment. If an option fee is indicated, the payment is delivered to the seller.

Getting from the contract signing to the closing table

With the purchase contract delivered to the title company, many things must be completed during the contract term prior to closing. The purchase contract is buyer and seller’s roadmap leading to a completed home sale. If the contract terms are not completed, there are legal ramifications for either buyer or seller. Sellers with legal questions should contact an attorney of their choosing.

Clearing the title
The chain of title is reviewed and a report is issued by the designated title company to the parties, noting any encumberances. Encumbrances could include M&M liens or other claims against the property. TREC purchase contracts require that the seller deliver a clear, unenumbered title to the home buyer. Per the contract terms, the seller must resolve any title issues prior to closing.

Property Inspections
Per the contract terms, the buyer has access to the property for inspection purposes. Inspections generally cover structural, mechanical, electrical, and plumbing systems. Other testing may include environmental or wood-destroying insect inspections. In Texas, inspectors are licensed and regulated by TREC and perform inspections according to regulated standards of practice.

Option Period & Repair Requests
The buyer’s inspections will usually occur during the option period while the buyer retains the unrestricted right to terminate the contract. If the inspection reports indicate the need for repairs, the buyer will usually submit a repair request to the seller during the option period. Unless required by the lender, repairs are negotiable. The purchase contract should be amended to include negotiated repair terms, and seller repairs are contractually required to be completed before closing.

Buyer Loan Approval
During the contract period, the buyer will fulfill the lender’s requirements for loan approval. The underwriting and approval process includes a review of the borrower’s ability to pay and the approval of the loan’s collateral —- usually, the house being purchased. The buyer’s application is processed and verified. The underwriting department orders the appraisal, survey, or other inspections, reviews the loan file and approves or denies the buyer’s loan.

Closing the home sale

The sales contract states the home sale’s terms and conditions, providing the title company instructions for completing the sale. Home sellers should understand the purchase contract documentation, the negotiated purchase terms, and the expected seller’s expenses prior the closing appointment. Home seller expenses include the following categoreis:

Seller closing costs include the following

Title Transfer & Conveyance Expenses
Required or negotiated expenses may include title insurance, document fees, attorney fees, recording fees or other title-related fees.

Prorated Expenses & Credits
Various expenses are prorated between the buyer and seller on closing day. Prorated expenses may include property taxes, association dues and fees, or credits for prepaid seller expenses.

Mortgage Payoff
Any fees, penalties, or outstanding mortgage loan balances are paid from the sales proceeds.

Broker Commissions & Fees
Home seller broker fees are deducted from the sales proceeds including commissions or transaction fees included in the listing agreement.

Seller Concessions to Buyer
Negotiated amounts paid on buyer’s behalf including credits for closing costs, repairs, or other negotiated allowances, subject to lender’s approval.

Closing Document Preparations
Once the title company and lender requirements are fulfilled and the loan is approved, it’s time to close the transaction. The loan documents and closing instructions are sent to the title company and the closing documents are prepared. The closing documents include the final settlement statement accounting for the money to be distributed at closing – the HUD-1 statement. Upon the buyer’s written request, the HUD-1 statement must be provided to the parties for review at least 24 hours before the closing.

Buyer’s Final Inspection
Prior to closing, the buyer will usually do a final walk through to inspect the completion of negotiated repairs and verify the property’s condition is acceptable. If the seller’s retain possession after closing under the terms of a temporary lease, the final inspection usually occurs after the seller moves, subject to the temporary lease terms. The seller’s duty is to deliver the home under the conditions present when the purchase contract was negotiated and executed.

Home sellers should create a checklist of items they’ll deliver to the buyers at closing including the following

• Keys for doors, mailboxes, or padlocks
• Garage, gate, or other remote control devices
• Security system codes and manuals
• Appliance operating manuals
• Home documentation for updates, repair, or additions

The Closing Meeting
At the appointed time, the buyers, sellers, their agents, and the lender’s representative gather at the title company for the closing appointment. In Texas, a title company escrow officer presides over the meeting and reviews the documentation with the parties. Each party receives their final closing documents and the settlement statement at the closing appointment. The buyers review and sign their loan and title documents. The seller’s review and sign the deed, settlement statement, and any title company or lender documents related the payoff of any existing financing. When the lender funds are available, the monies are distributed to the parties. Possession of the property is delivered to the buyers according to the terms of the purchase contract.