Step 4 - Closing the Deal
There are literally hundreds of points that you and your Coldwell Banker Hunter Realty agent can negotiate in a real estate transaction. Work closely with your agent to help you negotiate the best transaction possible.
Many offers include financing and home inspection contingencies. Ask your agent to explain the language, so that you can make an educated contract decision. The purchase contract must include the seller's responsibilities, with such things as passing clear title, maintaining the property in its present condition until closing and making any agreed-upon repairs to the property.
The two most common contingencies are financing, which makes the purchase conditional on the buyers' ability to obtain a loan and an inspection, which allows the buyers to have professionals inspect the property prior to final offer acceptance.
How flexible should a seller be in granting contingencies?
It depends on the specific offer and many other conditions including the condition of your property, the price you want to get, and how eager you are to sell. Once contingencies are negotiated, they become part of the deal and are written into your contract. Both the buyer and seller can place requirements on the table during the negotiation phase of a real estate transaction. Whether the buyer will find the seller's requirements reasonable, or even achievable depends on the individuals involved. Financial capabilities usually play a major role in negotiations.
Deciding what stays and what goes is usually up for negotiation. Sellers who want to take fixed items out of a house should specify so in the sales agreement. Usually appliances that are not built in (washer, dryer, refrigerator, portable dishwasher, portable microwave, freestanding stove) are removed by the seller at closing unless specified otherwise in the Purchase and Sale Agreement. Built-in appliances, window coverings, tacked down carpets, and fixtures permanently attached to the property are included, unless otherwise specified and agreed to by both the buyer and seller.
Earnest Money Deposit
This is a deposit paid by the buyer as evidence of the good faith intention to complete the transaction. The amount earmarked for earnest money is subject to negotiation. It may serve as a source of payment of damages to the seller if the buyer defaults without legal recourse. Until a real estate transaction is closed, the earnest money may be retained in a trust account. Earnest money is credited to the buyer's purchase price at closing.
The Contract of Sale or Purchase and Sale Agreement is a legally binding document whereby the buyer agrees to purchase for a certain price, and the seller agrees to convey the title. The contract also serves as directions to the escrow company to close the transaction. When your Coldwell Banker Hunter Realty agent prepares your contract, he or she should be clear about the following details:
Who is paying the various expenses of the sale, including closing costs?
Sellers usually pay for a portion of the closing costs, including a portion of the escrow fee and title insurance, a portion of the past year's taxes and assessment, and the real estate commission.
What is the actual closing date?
The closing date is the date in which the proceeds of sale are available to the seller and the deed has been recorded in the county recorder records. The date of closing can affect your closing costs (make sure to ask your lender for a good faith estimate).
What is the date of occupancy?
This date is agreed to between the buyer and seller during the negotiations. If the seller remains in occupancy after closing, then there should be a rent back agreement in place prior to closing
Increase the success of selling your home and decrease the chances that you'll have to pay for repairs after you've sold your home with a Coldwell Banker Home Protection Plan, paid out of escrow at the closing, which will also cover the cost for repairs or replacement to any mechanical systems or major built-in appliance for 180 days during the listing. Ask your Coldwell Banker Hunter Realty agent or click here for details.
A professional inspection should disclose repairs that may be found by a buyer or which should be completed prior to listing your home. The inspection and your Coldwell Banker Hunter Realty agent can give you recommendations on what to repair in advance so that there are fewer surprises when the buyer's inspector comes through.
An appraisal is an estimate of a property's value on the open market and is usually prepared by an appraiser for a lender's benefit.
Appraisers consider numerous factors such as square footage, construction quality, design, floor plan, amenities and energy efficiency. Other issues taken into account are neighborhood quality and a property's proximity to transportation, shopping and schools. Appraisers also look at lot size, topography, view and landscaping.
The final stage of a closing occurs with the transfer of title from one party to another. The policy of title insurance is sent to the buyer after closing has occurred.
Escrow is the third party which transfers the money and documents (including title and deed) between the buying and selling parties. The escrow company prepares documents, draws up the closing statements, obtains necessary signatures, records documents and receives and disburses funds.
If you would like more information about Title/Escrow services, please contact your Coldwell Banker Hunter Realty Agent, HL Title Agency, or Lawyers Title and its consumer education site
Once you've sold your home, make sure to keep your papers in order and know your rights as a homeseller. File all closing and settlement papers, including escrow papers, title report and your original purchase and sale agreement. Also be sure to include receipts and warranties for any home improvements you made while you owned the house.
Of course, one of the best parts about buying or selling a home is the tax break you may receive from the government. Contact the Internal Revenue Service directly at 1-800-TAX-FORM or log onto the Internal Revenue Service website. Ask your accountant for more information.