Let’s take a closer look at what you should know about home selling contracts. There are things that you should be aware of including disclosures you should be prepared to make to prospective buyers. Now, these contracts may be different from state to state.
Signing a purchase agreement for a house is going to a big step for a buyer. It basically means you’re closing the deal so you’ll want to know who signs the purchase agreement first. Of course a buyer needs to know what to looks for in a contract when buying a house… But you want to know the information as well. Who writes the purchase and sale agreement? We’ll get in to it as these real estate contracts are explained below.
The first thing is the property description. When it comes to seller contract, it goes well beyond just a simple physical address of the property. It goes into the exact plot lines and the assessor’s parcel number at some places. They might just call it a tax number for that property. So it could be called something different around the country. We need to verify that the assessor’s parcel number matches the property that you have in any property description. This information should be on your original documents or available at the county clerk’s office.
Next you want to consider is what property you are going to leave behind. Now these are things that are affixed to the property in most cases. So if you have great grandma’s very special chandelier from the beginning of the Republic of the United States… Take it down prior to listing. Just replace it with a different chandelier or a different type of lighting. Whatever you show in your listing photography is usually best to consider as included. If you’re getting the home staged, just be sure to let a buyer know any features that’ll be staying. You could also list what’s being excluded from the sale of your property. Have a conversation with your trusted real estate advisor and make sure that everybody is crystal clear on what stays.
Lastly, we’re going to make sure that you actually own this property. Sounds silly, right? Believe it or not there is a lot of fraud out there. So we’re going to be checking out the tax records. And then title company is going to step in and perform what’s called a preliminary title report. We’re going to be looking for anything that’s going on with your property from liens to encumbrances. As well as anything else that may affect the sale of this property. It’s better to have foresight into this process to mitigate it up front. So, you don’t want to get in to the closing process and find out there’s a problem. You should be transferring a free and clear title. It must be clean transferring it to the new buyer.
So make sure that you’re prepared that if there’s any liens on the property that it’s worked into the negotiation. Of course it’s easier to sell a house with a clear title. That being said, a lot of things are negotiable. Review your options with your local trusted real estate advisor about how best to sell your home. Given the market conditions and transfer, it may or may not work. So be real with yourself on this and plan for it up front.
Another thing to consider is the financial arrangements. Why do you need to be concerned about financial arrangements? Well, there are two things that impact you directly as a seller. Number one, what kind of financing do you want to entertain? And depending on the price point of your home, you may be able to entertain certain financing types, not others. Because your buyer may have a conventional loan, VA or an FHA loan, consider if that works for you. Your seller’s agent should know what kind of financing options are available to get your home sold. The more financing options that you’re open to the higher the number of buyers will have the ability to purchase. Consider your financing options wisely.
Earnest Money Deposit
As a matter of fact, let’s get in to your earnest money deposit. Sometimes this is called the EMD. This is what you’ll ask of your serious buyer if they want you to take your house off the market. It’s basically a show of faith they are going to go through with this transaction. That said, the normal amount you will ask for is anywhere from 1% to 3% of the sale price. So let’s quantify that for you. If your home is going for $500,000, you should ask for between $5,000 and $15,000. Keep in mind that there are different tactics to this. Not everyone is going to have that kind of money. But if they want a guarantee, you need one too. Generally, a good standard practice is 1% to one and a half percent of the sale price.
Another thing to prepare yourself for are inspections and disclosures. Now with your inspections, get a home pre-inspection done. The reason we suggest this is because it will give you the opportunity to correct anything needed. And well ahead of the listing time! Sometimes you hear about renegotiation taking place when a property is being sold. Then the seller ends up accepting a lower price because the buyer used a home inspection to ask for repairs. So it’s up to you to get this right from the beginning. A very wise practice is to have a home pre-inspection done first. Go ahead and correct everything and keep track of the receipts.
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Contract Settlement Details
Next thing to talk about is the settlement details. Now, these are the details that the purchase offer will contain when an offer is made to you. It will include the date that they made the offer and the date they are asking to close. Now consider the very real fact it’s the polite and right thing to do to ensure that house is clean. If you’re living there during the sale you’ll want to leave it in great condition when you go. If you’re not living there, do a final walk through shortly before the closing date. Make sure no one accidentally left anything behind during the selling process. And of course, be sure to notate your final walk through date.
As you move forward through the closing process you’ll have what are called an estimated settlement statement and settlement statements. What this means is that the title company is going to be reaching out to you. Initially they’re going to ask for a Statement of Information so they can verify the ownership of the property. They’re going to ask you for your bank information to see if you have net proceeds. If you want that money wired to you or if you prefer to pick it up as a check. Contact your escrow title officer to review the estimated net sheet. This includes a breakdown of the cost of selling your property.
For instance, if you live in an HOA community… You’ll have the cost of a resale package, the transfer, and any master plan associated with it. Plus, it should include the capital contribution for the incoming buyer.
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Once you have a ratified agreement between the buyer and yourself, it is now legally binding. It’s standard practice for agents to communicate with you a minimum of once per week while selling your home. Reporting activities they are doing to get your home sold is a must! In addition, they should also be requesting feedback from a buyer’s agent. As they share, you can adjust your price accordingly. The main takeaway is to get a great listing agent you can trust and who will work hard for you!
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