Step 1: Making the Decision
For many, the first and most difficult step of the whole process is admitting that you've run out of space for your growing family and your fabulous home just doesn't work anymore. Or maybe it’s just the opposite and now you have an empty nest and way too much house to keep up and yard to maintain. Whichever the case, it’s time to consider a change and make that decision.
First make a list of everything that doesn't flow or work for you in your current house. Is the kitchen too small, outdated, not enough cabinets? Not enough bathrooms for the number of people using them. No place for the kids now that they’re teenagers. The yard is too big or too small. Don’t like the neighborhood any more or you love your neighbors and don’t want to leave. Once you've made your list, then you need to make another list of how to solve the problems. Maybe you just need to remodel, fresh paint, new windows or whatever is needed to make you “love” your home again. And if none of those answers seems appealing, then maybe it’s time to “List it”.
Step 2: Find a REALTOR®
Once you’ve determined that moving is the best choice, now what? Well, you could just put a sign out in your yard, “House for Sale”. But then, who will answer the calls, show the house, market the property so that there are people wanting to see it. How will you know how much it’s worth? Does Zillow really know? Not really. Only a local REALTOR® can give you real facts and information regarding selling your home. Only a REALTOR® can provide you with local market information and what your house may sell for and only a REALTOR® can put your home in the Multiple Listing Service so that millions of individuals will know that your home is for sale and help you to be sure you get the best return on your investment.
According to the National Association of REALTORS® 2012 Survey of Home Buyers and Sellers, sellers using an agent got $40,100 more: The median sale price for the 88 percent of sellers who worked with an agent was $215,000, versus a median sale price of $174,900 for the 9 percent of sellers who didn’t use an agent.1
But how do I find a REALTOR®? In this link you will see all the local brokerages in Williamson County. Be sure to ask any questions you might have about your house or the process. Potential questions include pricing strategy (what price range are they thinking, how many days on market for your neighborhood, what happens if we don’t get an offer after 20, 30, 45 days, etc.), how many homes they’ve sold in your neighborhood, changes that need to be made to your home to get it in listing condition, etc. And do they have past clients you can talk to about their experience of home selling. More info about the home selling process can be found on the National Association of REALTORS® website.
After interviewing potential REALTORS® select the one who will work for you and that you feel you can trust to take you through the process. Let them know first, then be sure to contact the others you interviewed that you went with another REALTOR®. At this time, some REALTORS® will put a sign with “COMING SOON” in your yard to let everyone know your house will be on the market soon. The coming soon sign (or lack of) should be part of the marketing strategy your REALTOR® discusses with you prior to listing your home.
Step 3: Staging & Decorating
This includes spring cleaning, removing/changing furniture, artwork, de-personalizing the home and more. You want potential buyers to fall in love with this house like you did. Don’t forget to tidy the closets (if it’s summer – bring the sweaters and heavy jackets to a storage unit.) This is a good time to start the packing process! If your budget allows, it is recommended that you rent a storage unit to move these items. The goal is to have your home free from clutter, including your garage! A couple of photos here and there are okay; but the shrine down the hallway of your family tree will not impress buyers, nor will the marti gras themed kitchen! Neutral and fresh colors are best. Some buyers relate the tidiness of a house to how well it was kept up with maintenance, don’t let that hold them back from making your home, their home.
Step 4: Say Cheese
After you get your home in ready to list condition, your REALTOR® will have photos taken of your house. There are many people who may come take these photos, it could be your REALTOR®, their assistant, or even a professional photographer. This and more should be part of the listing and marketing plan you and your REALTOR® discussed prior to listing. These photos will be listed in the MLS and any syndication sites for everyone to see so be sure to review them prior to being published. Make sure they represent your house and that they are free of pictures of a sink full of dishes, food on the counter, pictures of the toilet and etc. The pictures should show your home in a positive way and most buyers start their home search on the web! So that picture of the backyard with trash, dead plants and dirt should not be posted.
Step 5: ... And We're Live
Once everything and everyone is ready, your REALTOR® will enter the information into the local MLS. Information included in the MLS includes, number of bedrooms/bathrooms, utility types, square footage, tax rates, school districts, HOA information, and much more! Be sure to ask your REALTOR® to preview this information prior to it going live to ensure that all of the information is accurate for potential buyers.
Step 6: Bring on the Showings
Once the listing is active in the MLS, it could be minutes, hours, days, or even weeks before you get that first request to show your house. However, be sure to keep your home in ready to show condition. The first call could come half-way through your weekly trip to the grocery store, and you wouldn’t want to leave because you needed to tidy up your home. Be sure to discuss with your REALTOR® how you want showings handled. In Williamson County, many agents use a showing service which uses your smartphone to schedule showings. Another popular option is having another REALTOR® call you directly to schedule an appointment.
Step 7: Continue to Pack
We cannot stress this enough, you don’t wait until you have a contract to pack. This is a great time to pack up the pots and pans you never use, clean out the pantry, or donate those items collecting dust to a local charity. Remember, you are committed to moving! The process will go quicker than you think and your buyers may want to close and move in within a month. You don’t want that to be an obstacle to the sale, so be ready.
Step 8: Start Looking for your next place to live
If you haven’t already started to do so, now is a good time to start looking for that next home. Let your REALTOR® know what you are wanting in your next home so he/she can start looking for you. Your REALTOR® will often have access to information regarding a new listing prior to its going on the market. This can help by giving you an opportunity to drive by, check the neighborhood and determine what you might be willing to pay for this home. This is a busy and tumultuous time in your life, don’t make it any more stressful by shoving all of your home buying into just one weekend, because no one makes good decisions under pressure! Enjoy the process! Find that next dream home.
Step 9: The first offers comes in
Congratulations, the first offer came in! Now the fun starts. You and your REALTOR® will go over the offer with a fine tooth comb to determine what the buyer is offering. Do they want the appliances and the fridge? What about new carpet? Do they want to close in 15 days and have you pay part of their closing costs? Use your REALTOR® to help you determine how much you should net after fees, closing costs, etc. Then decide, do I want to accept or make a counter-offer back to them.
Step 10: Turning the offer into a contract
For some, negotiations are the most stressful part of the process, and for others, this will not happen. Whatever it is for you, remember that’s why you hired a REALTOR®. Things to negotiate include: price, closing costs paid by you, closing date, temporary lease back, etc.
The buyer will write two checks, one to you for the “option fee” and then another to the title company for earnest money. Earnest money is essentially a security deposit showing your earnest (or sincerity) in purchasing a house. This amount is held onto during the entire offer period and will be retained by the seller if the buyer cancels their contract.
The state of Texas offers what is known as an “ option fee” when purchasing a house. In short, the “option fee” is money paid by the buyer to the seller for the option to terminate the contact and still retain their earnest money. For a little extra money, the buyer can guarantee an unrestricted out from the contract without consequence within an agreed up amount of days for a set amount of money.
The option fee gives the buyer time (usually between five to ten days) to fully evaluate the condition of the property after submitting the offer. This gives the buyer time to renegotiate the initial offer based on inspections, needed repairs, or other considerations. During the option period, buyers may either terminate the contract or proceed to purchase the home. Sellers not only receive the benefit of the option fee payment, but also avoid jeopardizing a successful sale. In addition, during the option period, the Seller can continue to negotiate and accept back-up offers from other potential Buyers.
Once you and the buyer sign off on the offer, then your house is officially under contract! Congratulations, you are one step closer to your closing date!
Step 11: The Inspection
The buyer will bring in a vendor of his/her choosing to inspect the house. The inspector will look at every aspect of your home and make sure that it is in working order and up to the current safety guidelines and codes. This includes the roof, water heater, appliances, sceptic if it applies, the stove hood, HVAC System, wiring of the house, and MUCH more. This information is necessary for the buyer as they to be sure that everything on the disclosure you presented is accurate and true and that something wasn’t missed. This is all to be done prior to the option period ending. If the inspection reveals some areas of work to be done, this will then need to be negotiated between you and the buyer. Who is going to pay for the repairs? Does the seller want repairs done or maybe they will want to reduce the offer to cover expenses they will incur upon moving into the home.
Step 12: Option Period Ends
Once the option period ends, the contract will move forward as usual. The “option for the buyer to back out” has passed, for the most part. The buyer has his/her inspection report and knows the condition of the house; they have had time to iron out any changes to the contact that they want (only if you agree to them). Of course, there are always outs in a contract, but instead of losing their option money for backing out, they also lose their earnest money (usually around 1% of the sales price.)
Step 13: Appraisal
The buyer’s lender will order an independent and unbiased opinion on the price of the home. If the appraisals value comes in at or above the offer on the home, the contract can move forward toward closing. If the valuation comes in below the offer price, then other options come into play.
The first option is for the buyer to put additional money down at closing so that the lender doesn’t lend more money than the home is worth. The second option is a renegotiation of the sales price of the home. A third option is a protest of the appraisal by the Seller’s REALTOR® by using comparable sales that match the criteria of your home and support the sales price. Another option is a termination of the sales contract, and the seller goes back to step 6 and reevaluates the sales price. If you are ever in this situation, consult your REALTOR® for advice on how to proceed.
Step 14: Moving Day
Depending on how the contract is worded, some sellers choose to be out of the house completely before the closing starts. Some have a closing time built into the contract based on their schedules. Whichever you have set up, this is when it becomes real for many. Working with the moving company to move the furniture and boxes to the new house, and your final cleaning can be bittersweet. Just remember, someone new will be able to enjoy this home as much as you did!
Step 15: Closing Day
Congratulations! You’re almost done with the process, and with just a couple of signatures your house will be officially sold. At this point, you will sign the paperwork and leave all of your keys at the title company for the buyers to take with them. The keys are not released by the title company until the loan is funded, which means that they have received the money for the home from the buyer’s lender. This is when the home officially belongs to the new buyers!
No two real estate transactions are the same. This list is meant to be a guide only. Always consult and trust your REALTOR® along the way.