The process of selling your home is a complicated process with a lot of different activities going on at the same time. Many of the activities are dependent on each other in that the success in one will allow the other to be successful as well. For instance prior to the mortgage lender being able to fund the loan commitment the house must appraise at or above the amount that is being borrowed to purchase the home. In the end though all the activities associated with selling your home do go to one end point and that is the actual sale of your home to the buyers. This article will explain to you the partners who will be working with you and your buyers to help get your home sold.
PUTTING HOME ON MARKET AND PURCHASE OFFER
When putting a home on sale a majority of home sellers (more than 85%) use Realtors to list and market their home for sale. Realtors partner with home sellers in order to provide input and guidance on home preparation, home staging, pricing and more in order to put the home in the best possible light for home buyers. Once the preparation stage of the home is complete the home is put on the market through the Multiple Listing Service.
A Realtor will submit an offer on your home in a majority of situations on behalf of their buyer clients. The offer will contain the purchase amount, how the purchase will be made (cash, financing, some other means) and will contain contingencies conditioning the purchase of the home upon home inspection, real estate contract picture appraisal, the obtaining of financing, delivery of clear title and more. When you are selling your home and receive an offer you and the Realtor representing you should review and discuss the terms and conditions of the offer and whether it suits your needs for selling the house.
If you as the home seller or home buyer are not working with a Realtor then it is in your best interest to have a real estate attorney look over the offer. By having an attorney look over an offer you are making sure the offer you get is legally sufficient and is not getting you into a contract to sell your home that you will live to regret. As a buyer you should have an attorney draft up your offer on a home in order to make sure you are protected in your purchase. If any contingency like home inspection, appraisal, financing or more are missing you could find yourself in a contract to buy a home even though the home inspection failed and all because you did not put in the right contingency language in your purchase offer.
The mortgage lender should have provided a pre-approval letter for the home purchaser to include with their purchase offer. The mortgage lender will run a credit check and in depth income/debt analysis to ensure the buyer can afford to purchase the home they are making an offer on. Once the buyer and seller are in contract the mortgage lender works behind the scenes with the buyer, buyer’s agent, appraiser and closing company to process the loan and prepare it for funding.
During an appraisal a licensed Appraiser will come out and examine your home and it’s condition to give the mortgage lender an opinion of the value of the home. If the opinion of value is for more than the amount being borrowed to buy the home then the mortgage lender can proceed onto the next step in their lending process. If the home is appraised for less than the amount that is being borrowed then the contract to purchase the home may be cancelled, the appraisal can be appealed or the buyer and seller can negotiate on how to adjust the home sale price or contribute cash towards reducing the loan amount.
During a home inspection a home inspector will examine the condition and mechanical functions of the house you are selling in order to advise the seller of any major issues or concerns that need to be further looked at. Depending on your state your home inspector may or may not be required to have a license. Ohio does not have home inspector licensing requirements whereas Kentucky does require home inspectors to be licensed.
The home inspectors report may suggest further evaluation be conducted in areas they find of concern but are unable to give an opinion on. Common areas where further evaluation by professional contractors is recommended include the HVAC system, roof, foundation, garage doors, and plumbing. After the home inspector provides the inspection report the buyers can ask for repairs to be made if needed, ask for a reduction in sales price to account for the condition or can cancel the contract to purchase the home completely if they believe the repairs are too much to deal with.
The Title Company usually gets involved early in house transaction process after an offer to buy a home has been accepted. The title company begins their process by researching the title/deed history of the property to make sure a freely transferable title can be transferred. Often times title companies are owned by attorneys or have attorneys on staff to provide opinions of titles. A clear title is needed for title insurance to be able to be purchased. A mortgage company will not lend for the purchase of a property if title insurance cannot be obtained.
In addition to making sure the title is freely transferable the title company works with the mortgage lenders of the seller and buyer for the transfer of money upon closing day. If the seller has a mortgage
the title company will obtain a pay off quote for the seller’s mortgage. The title company will also work with the buyer’s mortgage company providing information with regards to the title work, title insurance and by obtaining the mortgage loan check and preparing their own checks for distributing funds to the seller’s mortgage company, Realtors, Home Warranty company, tax authorities and any other bills that may be outstanding on the property.
As you can see there are many partners involved in a transaction to sell you home. By understanding who is involved in the home sale process you can keep yourself on track and be ready at each step of the way. As mentioned above many of these steps are interdependent on each other so if one step is skipped that could result in your entire home sale falling apart.