When
a buyer makes an offer to purchase your home, your REALTORŪ will
contact you promptly. The REALTORŪ will scrutinize the document, review
it with you carefully, and answer your questions. The written offer is
important because it lays out all the terms of the proposed transaction
and will become a binding contract if you sign it. The offer states the
price the buyer is willing to pay and the financing terms, such as
assuming your loan or arranging a new loan.
The offer may be
contingent on the buyer's selling a home first, or obtaining an
inspection. Ask the REALTORŪ how these terms affect you and whether the
offer is reasonable and in line with the market. The offer describes
the property, states who pays for which closing costs, and specifies
dates of closing and possession. Along with making the offer, the buyer
may place some earnest money with the escrow agent as a sign of good
faith. The earnest money will be kept in an escrow account and applied
to the buyer's down payment or closing costs when the sale closes.
Your options
In
reviewing the offer, you have three options: accept, reject, or make a
counteroffer. A counteroffer is a rejection of a buyer's offer with a
simultaneous offer from you to the buyer. In making your decision,
carefully review the figures compiled earlier to determine your net
proceeds. Because the terms and estimated closing costs may be quite
different from earlier calculations, you will want to discuss the
possibilities with your REALTORŪ. You are also encouraged to seek the
advice of an attorney and a tax adviser.
Seller's Disclosure
In
most residential sales, a seller will deliver a Seller's Disclosure
Notice to a buyer on or before the effective date of a contract to
purchase the property. The notice is required by law to be delivered.
It provides important information about the seller's knowledge of the
condition of the property. Complete the notice to your best knowledge
and belief. Your REALTORŪ will most likely ask that you complete the
notice at the time the listing is first taken. Copies of the completed
notice will be made available to the prospects looking at your
property.
Lead-Based Paint Disclosure
If
your property was built before 1978, federal law requires that before a
buyer is obligated under a contract to buy the property, the seller
shall: 1) provide the buyer with a lead hazard information pamphlet (as
prescribed by EPA); 2) disclose the presence of any known lead-based
paint or hazard; 3) provide the buyer with a lead hazard evaluation
report or records available to the seller; and 4) permit the buyer to
conduct a risk assessment or inspection for the presence of lead-based
paint or hazards. A contract for the sale of property built before 1978
must contain a statutorily prescribed Lead Warning Statement to the
buyer. Your REALTORŪ will provide you with the forms necessary to
comply with their law and will suggest procedures to follow in order to
comply.
Accepting the offer
Once
you and the buyer agree on terms and sign the contract, the buyer will
generally have to find a lender and apply for a loan. Your REALTORŪ may
monitor the loan process, which could last several weeks. During this
time, your REALTORŪ will also be busy coordinating other arrangements
to prepare for the final sale.
Title search
As
part of the process, the title company may order a survey of your
property and research the title to your home, making sure the chain of
title is clear. Clearing the title may require paying off liens - that
is, any monetary claims - against your property. Examples are
mechanic's liens, unpaid state and federal tax liens, court judgments,
and probate considerations (if a co-owner has died). The product of the
title search can be in the form of title insurance, abstract of title,
or certificate of title, depending on what is commonly used in your
area.
Inspection and repairs
If
the buyer requires inspections of your home, your REALTORŪ may
coordinate the scheduling of inspectors. A buyer may hire an inspector
to review many items in the property such as the structural components,
mechanical items, electrical systems and plumbing systems. The
inspector will report to the buyer the items that the inspector finds
to be in need of repair. Most likely the buyer will provide a copy of
the inspection report to you and may ask you to complete certain
repairs. Do not be surprised when the inspection notes some items in
need of repair. An inspector is trained to see items and defects that
are not obvious to you and your REALTORŪ. No matter how new or well
maintained a home is, an inspector may very well find some items in
need of repair.
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