When you receive an offer on your house, it is imperative that you review it carefully. The offer tells you the price the buyer is willing to pay and under what conditions. You may wish to consult with an attorney to assist you in reviewing the offer – it is the most important document of the sale. Once you and the buyer sign it, it becomes the contract of sale.
Ask your Real Estate Agent if you are to be present when the offer is submitted. In some areas this is customary; in others, your agent acts as your representative. Reviewing a buyer’s offer is an extremely important step in selling your home. Your Real Estate Agent will assist you, advise you on the best course of action and answer any questions you have.
Once you and your Real Estate Agent have thoroughly reviewed the buyer’s offer, you have several choices.
Accept the terms with no changes and sign the offer.
Make a counteroffer to the buyer by making some changes. In some cases, many counteroffers will take place before the final agreement is signed.
Reject the offer entirely.
Once you’ve signed an offer, you may accept a backup offer if that buyer clearly understands the house is under contract. The backup offer becomes effective only if the first offer falls through and the transaction fails.
Consult with your Crestico Agent to determine a price. Your agent can estimate your proceeds – the sale price minus fees, taxes and insurance.
Don’t be concerned if the offer you receive is exactly your asking price. It doesn’t mean you under-priced your home, but rather that you priced it accurately.
If the price is less than you wanted, look at the contract as a whole. Perhaps the buyer is assuming some of the closing expenses. Consider possession and financing terms, as well.
Consider splitting the difference if you and the buyer are within a few thousand dollars of each other. Remember that time on the market is an additional expense.
An earnest money deposit will be held by a third party until an agreement is reached or there is a closing between you and the buyer. At that time, the money is usually credited to the buyer and applied to the down payment. Until you accept his or her offer, the buyer may withdraw the offer and get the earnest money back. On the other hand, if the buyer fails to follow through with the contract once it’s accepted, you may be entitled to the earnest money. Your Real Estate Agent can answer any questions you may have regarding earnest money.
As part of the real estate contract process, you must prove to the buyer that you have a clear title on the house – that you own the property, and there are no legal claims against it. Through a title search, proof is provided.
The insurance company may search the title through the owner’s policy of title insurance. Either the buyer’s insurance company or your own may conduct this.
The abstract of title is a condensed history of a title to a property and a certification by the abstractor that the history is complete and accurate.
The certificate of title is reviewed by an attorney who searches the title and issues an opinion that the title is clear.
In some parts of the country, the Torrens system is used as a means of registering property. At closing, the duplicate Torrens certificate of title is turned over to the buyer.
Be prepared to transfer ownership of the property with a deed. A deed is a legal document that transfers the title (or ownership rights) of the property to the new owner. Most buyers will require a general warranty deed, in which you guarantee that no one will bring a claim against the title.
Conditions and Contingencies
Review the contract for special conditions requested by the buyer. A common condition is one in which the purchase of your home is contingent on the buyer selling his or her current home. The conditions may also be more specific, such as asking you to provide a survey of the property.
Although it may be dry reading, it is important to carefully read the contract and go over details with your Real Estate Agent. Read the fine print in your contract to understand the provisions (or ground rules) of who pays for what in the context of the sale. For instance, the contract should explain who is responsible if there is damage to the house after the contract is signed. The responsible party will want to insure the property through the transition. You or the buyer may add special provisions to the standard ones.
Does the refrigerator stay or go? How about the drapes in the formal living room? Double-check that everything you intend to sell with the house is listed accurately in the contract. This may include items such as fixtures, window treatments and appliances.
If you are thinking of selling a home, or want to talk with an expert Real Estate Agent, please work with a Crestico Agent. An agent at one of our local offices will be glad to talk with you, and help you in all of your Real Estate needs.