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The Basics of Selling Real Estate

The first thing a seller of real estate needs to know is a price range that house would sell. A seller can search “sold and pending” sales on this website using the last option under Search in the Navigation Bar. A seller can obtain listings that compare to theirs using this search. Of course, we offer a free service for sellers that are looking to list their property for sale called a Competitive Market Analysis (CMA). The free service will provide them with a price range and a list of items they can do to obtain the most for the property. It will also provide a Net Sheet showing the cost to sell their property and the net proceeds they should expect to receive when the sale is closed.

Another thing a seller may want to consider is helping the buyers by paying for some or all of a buyer’s closing costs. If funds are limited for the buyer the seller may want to consider paying for some of a buyer’s closing costs which is discussed here. Sellers typically do not want to pay for closing cost of the buyer but sometimes it is necessary to get a specific transaction done if funds are limited for the buyer. This is another item that would typically be reviewed as part of the CMA and included in the net sheet if appropriate.

Getting Ready and Listing for Sale

After a price range and the terms are established the next step could be either listing the property for sale or planning to complete items necessary to obtain a higher price for the real estate. A top real estate broker is going to help determine any items that may need to be address when marketing the property. A top real estate broker is going to make sure their client is informed about every aspect of the marketing, sale, and closing of their property. Timing is a big part of the transaction. It is important that the real estate broker know the seller’s needs in this regard because it can play a big part as to marketing and pricing.

Marketing the Property

There are many aspects to marketing property. One is exposure which is probably the easiest part of marketing a property. The other is making sure the property is exposed to the market place in such a way that it attracts the right buyer. This is partially done by creating a story about the property with pictures and narrative that attract the right buyer. Good advertising and marketing is critical but so is management of the process.

A top real estate agent is going to keep the seller informed as the property is being marketed. Especially relating to buyers that have toured the property. A top real estate brokers are going to discuss showings with the brokers showing the property to get as much information as possible about the showing. Some of the things that top real estate brokers are interested in are as follows: How did the showing go? How interested is their buyer? Where is the property on the buyer’s list? Is the property in their top three? Did they experience anything negative? Is there anything the buyers or real estate broker feel the seller should consider fixing or improving to make the property more desirable? How is the property priced compared to other properties they toured? We feel a top agent talks to the showing real estate broker personally and does not relied on automated technology. A personal phone call can obtain a lot more information than an automated request on how the showing went because one question can lead to others. More information can be obtained by a personal telephone call.

Buyer Makes an Offer

After the right buyer finds the property the buyer’s agent will prepare an offer per the buyer’s and his lender’s instructions. Once the offer is written and the buyer has reviewed and signed the offer it is delivered to the listing agent. The listing agent reviews it and sets up a meeting with the seller to review the offer and consider its terms. Typically a net sheet is prepared for the seller to see the net proceeds they would receive if the offer is accepted. If the terms are acceptable to the seller the offer is signed and sent back to the buyer’s agent. At this point the offer would be considered “mutually accepted.” This means that everyone (buyers and sellers) have agreed to all the terms of the transaction in writing. This date becomes important because other dates, such as, the inspection period and the depositing of earnest money are based upon this date.

If the offer’s terms are not acceptable in some way a counter offer is prepared and signed along with the original offer. The counter offer is then sent back the the buyer’s agent who reviews it with the buyer. The process continues like this until the offer is accepted by all or the offer is abandon by one of the parties.

Buyer has Property Inspected

An accepted offer will almost always have contingencies allowing the buyer to inspect the property without the risk of losing the property or their earnest money. This gives the buyer time to inspect the property without fear of losing it. A typical price range for an inspection runs about $340 to $400 which a home inspector typically requires at the time of the inspection. This is a cost paid by the buyer at the inspection. If the property turns out to have issues that cannot be overcome then the buyer terminates the transaction and gets their earnest money back from escrow. Of course, there can be many other contingencies which a good real estate broker would review with you. Typically, an inspection contingency runs for 10 days but this is negotiable as are all other aspects of an offer.

After the Property Inspection

Now that the property has been inspected and found to be acceptable the lender would order an appraisal. A typical cost for an appraisal is around $550 (paid by buyer) and can take a week or more to complete. The lender almost always gets this fee upfront from the buyer because they would be responsible for the fee if left unpaid by the buyer. Typically lenders will wait to order the appraisal until after the home inspection to make sure the property is acceptable to the buyer. They do not want to add another cost onto the buyer if the property turns out to have insurmountable issues. If the appraiser concludes that the property is at least worth the purchase price and there are no items requiring to be fixed by the appraisal then the process moves to the next aspect of the transaction which is underwriting.

Lender Underwriting

Underwriting is done by a person or persons insulated from influence by all including the lender. The time it takes an underwriter to review a loan package can vary and sometimes the process can be backed up due to volume which can add to the review process. The time involved can be 48 hours to weeks if there are issues found with the loan package. Underwriters are the checkers of the transaction. They review all aspects of the transaction from the buyer to the property and make sure the transaction meets the lenders and general aspects of the type of loan the buyer is obtaining. When a loan is in underwriting potentially the underwriter can and typically does ask for addition information about the buyer or property. Underwriter have full authority to deny a loan if any aspect of the transaction does not meet lender and government requirements. Once the loan is approved by the underwriter it will be ready for the documents to be prepared and sent to the closer.

Drawing Docs

The preparation of documents to be sent to the closer for review and signatures is typically called – “Drawing Docs.” This process typically takes about 24 hours. This is one of the final aspects of the loan process prior to obtaining signatures for the parties involved in the transaction. It is the process of preparing all lending documents to send to the closing office.

Lending Documents to Closing Office (escrow).

Once the loan documents are received by the closer (a neutral party) they are reviewed and prepared for signature. Any additional documents are prepared by the closer. The closer then calls all parties and schedules an appointment to review them with the buyer and seller and get their signatures. Buyers and Sellers sign and review the documents separately. A great real estate broker will always be at the signing to make sure everything goes smoothly and that all questions are answered. Once everything is signed and approved the documents are sent back to the lender for final review. This process also ranges in time depending upon the schedule of everyone involved. But it can happen the same day the documents are received if everyone has the time including the escrow officer.

Final Review by Lender

After loan documents are received back from the escrow officer they will review the documents to make sure they have been completed and signed properly. This can be on the same day or next day. It depends upon the lender. If it is taken care of the same day they call it “table funding” which basically means they may be able to fund and record the same day they receive the documents for review and the same day the documents were signed by everyone. This can be an important question the buyer will want to ask the lender because it can make the difference in closing sooner than later. The question to the lender is “can you table fund my transaction.” It may or may not mean that the transaction will close the same day because there are other considerations, such as, the time of day everyone is signing. But if a buyer wants to get the keys as soon as possible it can be an important question. Once the documents are reviewed and credit is re-checked by the lender (do not buy anything on credit prior to this process or my may be denied the loan) and found without changes the loan is approved and funds are sent to the closer.

Closer Funds and Records Transaction

When funds are received by the closer the property’s Deed of Trust is sent to the county for recording into the buyer’s name. A check is written or a wire is made to pay off any outstanding loans the seller has on the property. A check or wire is prepared for the seller as they instructed. Once the property is recorded in the buyers name a call goes out to all parties letting them know that the transaction is completed and that funds, if any, are available to the seller. In Washington state the seller has until 9:00 PM the day of recording to be out of the property. If the seller is already out the buyer may be able to get keys and assess to the property upon recording.