You can get an overview from the Bullet Points version.
Steps to Sell a House
Pre-listing video
Let's Sell Your House! (8:34 minutes)
Let's Sell Your House! (Detailed version - 18:29 minutes)
Let's Sell Your House! (Brief version - 2:14 minutes)
Before we meet
1) First Meeting
2) Prepare House for MLS
3) Make Listing Live
4) Initiate Marketing
5) Offer Received
6) Under Contract
7) Loan Processing and Underwriting
8) Final Steps
9) Close and Fund
If you naturally turn to the last chapter of any book, you’ll love this post. It’s a recap of almost everything you must do to sell your house. If it’s too much information, no worries. I’ll track everything and tell you what needs to be done next. You are the hero in this story, and I’m your guide. I’m here to help and serve you!
All Texas real estate agents are prohibited from giving legal advice unless they are also a state-licensed attorney. If you need legal advice, please contact a lawyer. I can provide a list upon request.
As a licensed Texas REALTOR, I can help guide you through the home-selling process. I can locate trustworthy vendors to help prepare your home for the market, help determine the best listing price based on a comparative market analysis, effectively market the house to get maximum immediate exposure, negotiate favorable terms, orchestrate the collection of Option Fees and Earnest Money, negotiate repairs (if any), monitor loan officers and title to keep the process on track and get the transaction closed.
Please call or text 214-862-7212 or email me when you are ready for my help.
Selling a house is exciting. It’s also a little overwhelming because it’s probably your biggest investment. It also takes a while and some expense to get it ready for market. I’m here to help. I’m on your side before, during and after the transaction. I look out for your best interests. I’ve got your back.
I’m an OPFOR Infantry veteran. In our lingo, “I’ve Got Your Six!”
I’ll be on the lookout for problems, and I’ll do everything in my power to keep you safe throughout the transaction. I’ll give you information about the market prices of comparable properties. I’ll ensure everything goes smoothly and everything stays on track. The mission is to get you moved into your next ideal home with the least stress. I’m on duty to make it happen.
Pre-listing video
If you haven’t seen it yet, please watch my pre-listing video. It is the fastest way to understand what to expect. It will also introduce you to me and my brokerage. You’ll see that you are with the right people, and you made the best decision. See it at the following links:
Ideal version - covers everything you need to know.
Detailed version - goes into detail about what you can expect
Brief version - quickly covers the basics. Hit pause to read the details.
Before we meet
Prepare yourself to sell the house. It has been your home for years. You probably need to make some photos for your scrapbook and look in rarely used cupboards. You should go through your belongings and see what you may want to pack now or gift to others.
Next, you must set aside some money to get the house “market ready.” When you’re selling a home, there’s much to do before you claim your equity and appreciation. We can talk about the specific needs of your house once I see it in person. The longer you or a tenant have lived in the property without full maintenance, the more attention it needs. If you’re handy, expect to at least spend a little time and money on paint and caulk. If you’re not handy, I have a robust list of trusted vendors to help you.
If you plan to also buy a house, the sale of the house hopefully covers your down payment. The goal is 20% to avoid mortgage insurance. VA loans don’t require down payments and don’t have mortgage insurance. It’s still good to pay any additional related expenses and pay a comfortable amount of principal early to avoid interest on those funds.
If you want help obtaining a preapproval letter, I’ll help you talk to the lender of your choice. I have many trusted options for different needs. Otherwise, contact me once you have a preapproval letter from your preferred lender.
Please tell me about your timing. Ideally, we want one direct move from your current house to your ideal home.
Call, text or email DFWmark
Please call or text 214-862-7212 or send an email to DFWmark@kw.com or markhancockrealty@gmail.com to get started.
When you first contact me about selling your house, I’ll send you an invitation to my website (DFWmark.com). By creating a password, you can save individual properties or entire searches.
You must know about the competition in your neighborhood. You want the price of your property to be just right – not too high or low compared to similar properties.
My website is tied directly to the Multiple Listing Service (MLS). You’ll have access directly to MLS listings at no cost to you. Unlike 3rd party websites - which can be far behind the market – DFWmark.com is “live.” If you see an Active property, it’s still listed as Active in the MLS.
I’ll send you the state-mandated Information About Brokerage Services form. It creates no obligation. It is a state-required disclosure. It explains how agency works in Texas and lets you know the names and numbers of my supervising brokers. My brokerage requires it to be initialed. It can be done in person with ink, but it’s better to get digital initials because we can ensure the system works properly with your preferred email address on your computer or smartphone.
You may want to know Who Pays For What now.
To be completely transparent, your listing agreement is with the brokerage. The brokerage is paid after the sale funds. I’m paid by the brokerage after they have been paid and deducted their expenses and franchise fees. Meanwhile, I personally incur multiple expenses to sell your house. I am not reimbursed for these expenses unless we get your house sold. Therefore, I’m motivated. I’m relentless.
• Sign listing agreement
• Determine needs and preferences
• Review comparable market analysis
• Determine timing and expectations
Our first meeting can be in person, via Zoom (virtual), or even a phone call. You and I want to see if we’re a good match. We can talk about the comparable Active and Sold houses in your immediate area.
If I haven’t already gotten one from you, I must present a state-required Information About Brokerage Services (IABS) form and ask for initials. Your initials indicate that I have presented the document to you and explained “agency” in Texas. Again, it has no obligation.
Next, I must understand your needs and see how I can help.
• Why must you sell?
• What is your goal?
• When must you move?
• Which is more important to you time or money?
• What vendors do you need?
• What do you value in a REALTOR?
• Do you plan to move before or after closing?
• What concerns do you have?
Ideally, you understand that I care about my clients, and you’ll trust me. Then, we can mutually agree to work together to get your house sold. I’ll ask to become your agent. If you agree, I’ll present in person or send a digital Exclusive Right To Sell Residential Listing Agreement.
Once signed, you’ll have full fiduciary rights of obedience, loyalty, disclosure, confidentiality, accounting, reasonable care and diligence from me as your agent.
Time to Shop The Competition
At this point, it’s good to shop the competition online. You don’t need to visit because the photos should sell the house. You’ll understand how buyers think and can apply that mindset as you prepare your house for sale. Make your house the one that buyers want to buy on its first day on the market.
Additionally, you’ll narrow down the criteria you want in your ideal home. When it’s time to buy, you’ll be focused and ready.
If you are buying locally, please read my Home Buyer Guide.
• Declutter and remove personal items
• Stager evaluation
• Make professional photos
Before the house goes on the Multiple Listing Service (MLS), more paperwork must be completed. Specifically, you must complete a Seller’s Disclosure (SD). A Seller’s Disclosure is a notice required of most sellers to disclose the condition of their real property prior to the execution of a contract for the sale of the property. This must only be completed by the homeowner – not by the REALTOR. It’s the owner’s one chance to be completely honest and forthcoming about the condition of the property. It must be complete and entirely truthful to help avoid future repercussions.
There are multiple ways to complete this form depending on your preference. I suggest Seller’s Shield (sellersshield.com) because it allows homeowners to easily make changes digitally and quickly resubmit the updated document. They will show the premium paid version, but it is also available at no cost to the homeowner.
Next, if no physical changes occurred on the property since it last changed hands (no rooms added or removed, no new fences or decks, etc.), sellers may use the last survey. In addition to the survey, sellers must complete a T-47 Residential Real Property Affidavit that states no changes have occurred and the survey is correct. I’ll provide the form and notarize it earlier in the process.
If you don’t have a survey or something has changed, let me know. We can decide the best route depending on the market, your property price point and your individual circumstances.
I must know all major repairs and upgrades to the house. I’ll use the information to create a document that I provide for other agents.
Other documents that may be needed at this point include the Lead Based Paint Addendum if the house is older than 1978. If the property has a tenant, a Keybox Authorization is required. If the property is a condominium (some townhomes and even a few houses are deed restricted as condominiums), a Condo Addendum is required.
Almost everything is negotiable in real estate – if it’s done in advance. Now is the time to understand exactly what you require to complete a transaction. “Renegotiation” is a new negotiation and tends to give up more than it gets.
Do you need a short-term “leaseback” agreement? It is formally known as a Seller’s Temporary Residential Lease. How much time do you need to find a house?
Most leasebacks are less than 15 days but depend on market conditions. In a tight market, sellers may want extra time to find their next home. If buying a new-built inventory home, the hunt and move should be relatively quick and easy. Please understand that the leaseback arrangement makes you the tenant of the new owner and allows your new landlord to set requirements such as professional cleaning of the property at your expense after you leave. There can be - but often isn’t – a daily rental fee. A deposit is required, and steep penalties can exist for staying past the agreed-upon date. These arrangements are also negotiable.
House Repairs
All houses need maintenance. Major repairs must be addressed before the photos are made and displayed online. You only get one opportunity to put your best foot forward for a quick sale at top dollar.
If it has been a while since the house was caulked and painted, expect those actions to be necessary. Remember to put some spackle in holes where you’ve hung photos or shelves and use precisely matched paint – color, finish (sheen), quality and brand. Don’t give the wall measles.
Additional work may be required to get the home show ready. While maintenance won’t add to your home’s overall value, it helps the property sell faster and not have those same items become issues during repair negotiations or ultimately deductions during the home’s appraisal.
If a claim was filed and paid through an insurance company, that work must have been completed. If not, the house can’t be sold. If a homeowner was paid for a damaged roof and the roof was not repaired with the claim funds, the homeowner is on the hook to repair the roof – even if costs have increased significantly since the initial claim.
De-clutter and organize
If you sell the house, you must eventually pack. It’s best to start now.
Start from the most obscure places (attics and deep closets) and work your way to the living areas. This ensures you don’t miss anything.
Organize everything into groups:
• Throw away
• Sell (online or garage sale)
• Donate
• Gifts
• Pack for storage
• Keep available
These groups are obvious. However, it’s vital to always keep all house-related paperwork available.
Please consider renting a storage area for a month or two for the items you won’t need immediately. The goal is to remove items from the house. However, if this isn’t in your budget, the garage works as a storage area during the listing period.
That said, buyers, inspectors, appraisers and others must have access to mechanical items in the garage: garage door opener, electrical box, water heaters, attic access, etc. Not having a clear path to these items may cause transaction delays and additional expenses.
Pre-stage
Before a professional stager sees the property, homeowners should go through the following list of staging tips. These ideas prepare your house to succeed and get a high price quickly. Don’t go overboard with your budget here, but any hard work pays off later.
Focus on the front curb appeal and everything visible from the street. Then, complete all deferred maintenance such as cleanup and simple repairs. If it’s fixed correctly, nobody notices. If it is NOT correct, everyone sees it immediately.
Next, remove everything personal from the house. No personal photos, very little art. Remove everything “exotic” that would divert attention away from the house itself. Keep the breakfront but remove the curios. A visiting guest should not be able to guess who lives in the house or anything about their lifestyle or profession. Again, the guests must see themselves in the house.
Remove medicines, valuables and any fixtures you plan to keep. All valuables and medicines should be in a secure location – preferably away from the property. Leave them with a trusted relative, friend or neighbor until the showing period is complete.
While televisions may need to be in listing photos, jewelry cases, collections and such don’t. Remove them before photo day.
Likewise, remove fixtures you plan to keep. A fixture is anything attached to the building. Fixtures are not personal property. Fixtures are part of the purchase of the preowned home. Some examples of fixtures are lights, curtains and rods, television mounts (not the TV, but the mount is attached to the wall), permanently installed outdoor grills, etc.
A refrigerator is not a fixture unless it is “built-in.” Most mounted microwaves are fixtures unless they sit on the counter and plug into a wall socket.
The goal is to remove all these items before the photos and showings. It eliminates future arguments about what conveys with the property. These items can be listed as exemptions on the contract, but you can’t count on the buyer to read or understand the contract in its entirety. It’s simpler to remove those items before photos.
That said, non-fixtures such as the refrigerator, clothes washer, dryer, doghouse, hot tub, etc. are personal property. If they are on the property when the house is shown, they can become part of the bargain.
Everything remaining on the property is negotiable. Consider what you will and won’t want to sell and a price for each object. The buyer may want your grandmother’s kerosene lamp enough to buy a house at a significantly higher price. What is it worth to you?
Finally, hop in the car, drive around the block and come back to the house as if you were a buyer. Look at the outside, look at the inside, look for cracks, inspect the paint, check the drawers and door handles, smell under the sinks, and listen for creaks. Is there dust or dirt on ceiling fan blades or vents?
Would YOU buy this house for this amount? If not, why not? It’s either condition or price. Please repair the condition or adjust the price now.
Staging
Once all non-essential items are out of the house, please prepare your house for “inspection.” If any furniture will remain at the property during showings, I’ll hire a stager for one hour at my expense. The stager reviews the property in person or virtually and gives you a detailed list of staging ideas to make the home “show ready.”
Staging a home sets an appealing scene rather than spends thousands of dollars to do so. There are simple ways to make a house more desirable to potential buyers. The goal is to make any home more marketable by creating a blank canvas for the buyer to envision their future home.
If the home will be empty, I have staging items to put in the house to help give it scale and more immediate appeal during the photos and possibly beyond.
Many stagers have rental items to place in the home to enhance its appeal. They can also arrive at your property and help you physically move and place items. They are professionals and most do a marvelous job getting the property show ready for photos or the actual listing period.
While most stagers work with your personal property to make an appealing scene and emphasize the use of space, some higher-end properties may warrant leased items such as pianos, billiard tables or other high-end, room-specific items.
However, any additional costs with the stager are at the homeowner’s expense. This is an additional expense and agreement between the homeowner and the stager.
Photos
Photos get buyers interested in a property. Professional photos elevate your property above the others. Fear Of Missing Out (FOMO) is real when it comes to properly priced, well-maintained homes. If the house is in good condition, priced properly and has high-end professional photos, it gets viewings and moves quickly. Buyers know this too. These factors motivate buyers to put in an offer today because it’s FOMO time.
Once the house is ready and staged, it’s time for me or a trusted associate to do my specialty. It takes a while to photograph a home properly. Depending on the direction the house faces, the shoot may take place near sunrise or sunset for exterior photos. If the house has beautiful exterior lighting features or a pool, it needs to be photographed at night.
If you look in the MLS at any house that’s been on the market more than 30 days in your neighborhood, there may be one or more of three main problems. 1) the house is overpriced 2) the house is in bad condition 3) the photos are horrible or nonexistent.
Since I’m there with my camera and drone, how about we make some fun portraits of your family and pets to remember your home. Then, you can share them with your friends, family and associates. They may know the person who is about to buy your house. This is my favorite part of the entire transaction.
• Listing is Active on MLS
• Sign is installed
• Lockbox is on door
• Showing service is activated
If you guessed there was more paperwork, you’re right. I’ll ask you to complete and sign the Residential Data Input Form from NTREIS (North Texas Real Estate Information Systems). I’ll enter this information into the MLS.
If your house has ever been on the MLS, I’ll give you older versions to help. Please verify the information before adding information. It’s a very long form, so please set aside enough time to go through it.
After the form is complete and the initial images are processed, we’ll see when the house can be ready to list. “New To Market” houses get the label for 10 days on the MLS – including Option days if one falls out for any reason. Our launch target is a Thursday to ensure it is listed as “New” on the MLS for two full weekends.
Coming Soon
If the house will be show ready within 30 days, we’ll post it as “Coming Soon” in the MLS and place a sign in the yard with a “Coming Soon” rider sign (also called a “swinger” on post signs).
Due to MLS rules, it’s vital to understand the house CANNOT be shown to ANYONE while it is in Coming Soon status.
If it is shown while in Coming Soon status, we will be punished. It must immediately switch to Active in the MLS and all the days that were in “Coming Soon” count as days on market (DOM) even if nobody saw the property. This could be a disaster if crews are still working on repairs because now you must decide to show it with active crews or just leave it on the market without showing it (the better option of two bad options).
Additionally, I’ll get hefty daily fines.
In short, DON'T show the home to anyone while it’s in Coming Soon status.
Behind the curtain
From this point onward, I’ll do a lot of “behind the curtain” work. I’ll communicate with the buyer’s agents, MLS reps, showing service, printers and others. I’ll be mailing, emailing, calling, texting, meeting face-to-face and arranging to get you an acceptable deal. My goal is to keep you focused on your decisions while I work hard to ensure your decisions are fulfilled and rewarded.
• Print and digital marketing materials
• Unique property website
• Social media advertisements
• Open houses and broker's tour
For most houses, your neighbors, buyer’s agents, my fellow agents
and folks with online accounts learn about your property before it becomes Active.
I’ll create and post unique online marketing materials across multiple platforms of social media. I’ll also create, print and mail printed materials to your nearby neighbors. They may want to inform a relative or friend that loved ones could live near each other now. These buyers can move fast and may offer more money for a location near their family or friends.
Switch to active
Most likely, you’ve already gotten several notifications for appointments in the days leading up to Opening Day on the market. On the first day of showings, expect requests and visitors from 8 a.m. until 9 p.m. Smart agents arrive early and put in an offer the same day.
If you choose to approve visitors, you’ll be notified each time an appointment is requested. You must approve or deny each request. I’ll also be notified via text, email or call. If you deny a request, expect a call from both me and the showing service.
Additionally, I’ll be notified when the showing agent activates the keybox. If there’s a problem, we can rebuild the timeline.
If your home is priced at $450,000 or below, you may want to consider staying at a hotel, with a friend or at a relative’s house for the first few days on the market – particularly if you have children or pets. Obviously, this changes with the market and the price point, but the housing shortages of 2020 equates to back-to-back or overlapping showings from start to finish of each showing day.
If houses are set to Show-and-Go - which I strongly suggest for the first few days - showings may be busier than appointment-based homes.
Pandemic protocols
This section was written during the COVID-19 pandemic. I’ll leave it as a reminder for future generations because everything is cyclical.
We want to keep everyone safe: homeowners, buyers, agents, inspectors, appraisers and contractors. Our brokerage policy is parallel to several other real estate brokerages.
No showings happen while any current resident is contagious or has been in contact with anyone who is contagious. After any recovery period, the house must be completely sanitized to protect other residents and visitors. It is currently typical to wait 14 days after someone has displayed symptoms before sanitizing and continuing showings.
Pandemic visitors
No person may visit the property if they are displaying symptoms or have had contact with anyone diagnosed with a contagious pathogen within the last 14 days.
Appointments (including Go-and-Show) are required for contact tracing. All visitors – agents, prospective buyers and contractors– must complete the Texas Realtors Model COVID-19 Certification for Property Access form prior to entering the house. This form is available to agents in the Transaction Desk of the listing (only seen by agents). There will also be a designated COVID-19 protocol station near the house entry.
The protocol station has physical certification forms, pens, hand sanitizer, shoe covers and a small foot-activated, covered waste can.
• Pre-qualify buyer and lender (if any)
• Negotiate seller's terms
• Call for Best & Highest offers
• Review the breakdown of offers
• Accept offer
After buyers have visited the property and decided to purchase, they send an offer through their agent to me. I’ll ensure the offer is valid by checking the contract and supporting documents. If there is a problem, I’ll refer it back to the buyer’s agent for corrections.
If the offer is valid (even if it is laughably low), I forward the offer to you with my opinion. If there is more than one offer, I’ll notate the key paragraphs of the offer on a quick-view spreadsheet. It allows you to quickly see the key points of the offer and the bottom line. The spreadsheet is arranged to highlight specific contract paragraphs.
At this point, nothing must happen. You aren’t required to react to any offers or take them in the order received or accept the most money if a lower-priced offer has appealed to your charitable side. They are all valid and active until the Buyer’s agent sends a Notice of Withdrawal of Offer, or you take an action to reject or counteroffer, which you aren’t required to do.
However, I’m required to inform all active offers about the house’s status every two days until some action occurs.
In multiple offer situations, there are fewer negotiations. The seller is presented with a buffet of options. The seller chooses the best offer for themselves and moves forward. If there’s a minor tweak, it can often be accomplished via Amendment - dates, amounts or other facts.
Negotiations
The advantage of having an agent is the “hands off” aspect of negotiations. We act as the shock absorbers in negotiations.
You tell your agent what you want. Your agent is on your side, so it’s non-confrontational. Your agent tells the other agent what you want. Both agents are unattached professionals who are looking out for the best interests of their clients. The other agent then explains the options available to their client.
This loop can happen several times in several different forms and layers of formality. Hopefully, the result is something both sides can agree upon.
Offer accepted
If you decide to accept an offer, the Buyer has already signed the documents. You digitally sign all associated documents. Those are returned to me. I’ll bundle them together and notify the buyer’s agent. Once I have notified the Buyer’s agent, the contract has been “executed” and the clocks start ticking.
The date the contract is executed becomes “Day Zero” for counting purposes. Day 1 is the following day. This is important when making Option Fee, Earnest Money and Option Period calculations.
Invitation to Submit New Offer
If a Buyer submits an offer that doesn’t meet your needs, but you want to work with the Buyer, we can reply with the Seller’s Invitation to Buyer to Submit New Offer form.
This isn’t a counteroffer. It’s an invitation. Therefore, the property remains on the market. It allows you to specifically state what you want from them to move forward.
Then, they can decide if they want to take your advice and submit a new offer.
Time to Buy
You have shopped for houses since step one. By now, you know what you want, where you want it and have a good idea about cost and possibly even selected a specific home.
If you have the funds set aside to purchase a house with at least 20% down to avoid mortgage insurance AND you have either paid off your house or have enough income-to-debt to handle two notes, you can now actively look to buy your next ideal home. Please read my no-cost Home Buyer Guide.
If you need the proceeds from the sale of your house as a down payment for your next house, you wait until after the negotiations and Option Period have ended on your current property. Then, it’s time to get under contract for your next ideal home. Unless there’s a problem with financing (Buyer or property) or title, the deal should move to completion.
• Earnest and Option Fee deposited
• Property inspected
• Repairs negotiated (if any)
You have accepted an offer, and I communicated acceptance to the Buyer’s agent to execute the contract. Congratulations!
It’s officially Day Zero and the clock is ticking. Two items have hard deadlines that must be met. They are the Option Fee and Earnest Money.
The Option Period – technically called Termination Option in Paragraph 5.B. - is a one-sided agreement that can be voided by that party. It also terminates at a precise time due to the “time is of the essence” phrase. The Option Fee is a non-refundable, negotiated amount paid by the Buyer to the Seller to have the “unrestricted right to terminate this contract by giving notice of termination to the seller within (a negotiated number of) days after the Effective Date of this contract (Option Period).”
The fee will be applied to the Sales Price at closing. The fee amount is negotiable. In a tight market, it’s often $1,000 to show intent. Otherwise, it’s often rounded near .001 of the Sales Price, but sellers can ask for any specific amount such as $50 per day of Option Period with a minimum. For instance, on a $200,000 house, a $200 minimum would apply on a 3- or 4-day Option Period (minimum) while a $350 fee could apply for a 7-day Option (7 x $50). The buyer isn’t required to agree to this, but it’s a good starting point from a seller’s point of view.
If the buyer chose to have an Option Period, the buyer’s agent either collects an Option Fee and Earnest Money check(s) or directs the buyer to pay virtually via an agreed-upon digital transfer. It must be delivered to the title company before 5 p.m. within 3 days of the Effective Date.
The contract states, “The amount(s) escrow agent receives under this paragraph shall be applied first to the Option Fee, then to the earnest money, and then to the additional earnest money.” Buyers, sellers and agents are notified of the payment by the title company. If this payment isn’t received by the strict deadline, this paragraph is not part of the contract, but the contract is still active. The Buyer simply removed the unrestricted option to terminate the condition by not paying the Option Fee.
If the title company has the Earnest Money by the deadline – regardless of the Option Period - the contract moves forward. If the Earnest Money isn’t received by the deadline, sellers have the ability – but aren’t required - to terminate the contract.
More paperwork
The Seller’s Disclosure should have been resolved before the house went on the market. It would have been signed and submitted with the offer. If not, it must be delivered and signed now.
All paperwork is inputted into the system and delivered to title for processing.
Inspection
The Termination Option allows the buyer to terminate the contract for any reason. Often, the contract is terminated when the parties can’t agree on repair negotiations.
During the Option Period, the Buyer – at the Buyer’s expense – hires a licensed inspector and possibly structural engineers, roofers and others to detail the property as part of the Buyer’s due diligence. The resulting report(s) belongs to the Buyer and is the opinion of the inspector(s).
The inspectors request unaccompanied access to the property via the showing service. Most licensed inspectors have access to the key via the digital lockbox. I, you or the property resident can meet other contractors to allow access for specific inspections such as foundation or HVAC while roofers often don’t need interior access.
Repair negotiations
Unless the house is in ideal shape for its age, there may be friction during repair negotiations. Again, the agents work as shock absorbers for both sides to hopefully get what everyone ultimately wants. This is often a debate about time and money on both sides of the negotiation.
Meanwhile, Paragraph 7.D. of the contract states, “ACCEPTANCE OF PROPERTY CONDITION: "As Is" means the present condition of the Property with any and all defects and without warranty except for the warranties of title and the warranties in this contract. Buyer's agreement to accept the Property As Is under Paragraph 7.D. (1) or (2) does not preclude Buyer from inspecting the Property under Paragraph 7A, from negotiating repairs or treatments in a subsequent amendment, or from terminating this contract during the Option Period, if any.”
While no repairs are required, the Buyer can terminate if they have a Termination Option.
In general, if the repair requests are a deal breaker, break the deal. If not, try to find a written compromise. Everyone should paddle the same direction. If not, it’s probably time to get out of the boat. Acceptable terms can only be determined by you and the Buyer.
• Lender approves buyer's loan
• Appraisal ordered by lender
• Rep provides comparable analysis to an appraiser for consideration
• Loan evaluated
I’ll touch base with the buyer’s agent and the loan officer to ensure the loan is on track to meet the contracted closing date.
Appraisal
If it’s a cash deal, there is no appraisal unless the buyer wants one and pays out of pocket. However, it doesn’t affect the contract.
If the deal involves a Third Party Financing Addendum, the bank orders an appraisal of the property. Unless the buyer has specifically included a form stating they will pay any amount over the appraisal amount, the buyer has the right to terminate the contract if the appraisal “does not satisfy lender's underwriting requirements for the loan (including but not limited to appraisal, insurability, and lender required repairs).” It must meet the lender’s value and condition requirements.
This is where the type of loan becomes important for the seller. The appraisal is for the amount financed rather than the Sales Price of the property. The bank wants assurances that they will recover their investment if there is a default.
• Conventional loans with large down payments to avoid mortgage insurance are best. Even if the house is a little overpriced, it should easily make the appraisal requirement.
• Conventional loans with a 5% down payment are trickier if the house is priced near the top of the scale.
• FHA loans with a 3.5% down payment may require a price adjustment to meet the appraised price and keep the deal on target.
• VA and USDA allow 0% down payment loans. The selling price must have been precise for appraisal, or the buyer may need a price adjustment to meet the VA appraiser’s opinion on value and condition. The borrower is allowed to pay the difference at closing. While the VA standard is a higher hurdle – speaking as a veteran – part of the veteran’s offer includes the consideration of “sacrifices already paid to the country.”
Once the appraiser contacts me to get access, I’ll pull comparables and create a CMA with additional information to justify the home’s sum of financing. I’ll leave this for the appraiser in a specified location.
Closing Date
Most contracts are set to close in about 30 days unless some other time factor is involved. It’s best to think of a closing date as a goal or target rather than a hardline item. Life happens. Expect to give or get some grace.
All contracts can close “on or before“ the contracted closing date, but an Amendment is required if closing is expected after the contracted date to avoid Default.
• Loan approved
• Closing Disclosure (CD) issued
• Title company balances with the lender and gets loan documents
• Closing appointment set
It’s exciting now! While the bank and title prepare their paperwork, it’s time for you to prepare to move. Please print my comprehensive Moving Checklist (Page 32). I have a list of movers on DFWreferral.blogspot.com.
You’ll also want to collect a list of utility providers to quickly transition after the house is closed and funded. Do NOT turn off any utilities or cancel insurance until the closing is completed. If you do, the buyers can’t complete the walkthrough, and it most likely may delay closing.
If tenants are in the property, please ensure they cooperate or make other arrangements with the buyer. If the tenant is leaving, ensure the tenant’s departure is smooth. Otherwise, ensure lease contracts are in proper order to transfer to the new owner. The tenant’s deposit also transfers to the new owner.
Put the finishing touches on any promised repairs. They must be complete before the handoff unless some other written agreement exists.
Closing Disclosure (CD)
In the final days before closing, the Buyer gets a Closing Disclosure (CD) from their lender. You won’t see this document, but title will get a similar document. This document sets off a chain of events that leads to notification of final confirmations and appointments from the title company.
You should have a day or more to review the final documents provided by title. I’m here to help you work through them although I can’t give you any legal advice.
Please see the “Who Pays For What” list (Page 33) that you’ll see on the final documents.
• Final walkthrough of the house
• Details of key exchange
• Sign closing documents
• Funding
• Termination of utility services
Final Walkthrough
The Final Walk Through is typically conducted on the day before closing, but it can happen just before closing or not at all.
The Buyer is entitled to a final walk through the property before closing. This ensures all promised work has been completed, no fixtures have been removed and no new damage has happened to the property. The property must be clean and ready for handover. Please make the house look like you would want to see your new house. A professional cleaner is advised.
I’ll ensure the Buyer’s agent has a signed version of the Buyer’s Walk-Through and Acceptance Form if one was conducted.
If you have a short-term leaseback agreement, you should clean the house as much as possible and accommodate the Buyer to inspect their future property for damage.
If you had a leaseback, you must clean the property after you move to ensure you get your deposit back from your temporary landlord. Often a professional cleaning is required as part of this agreement.
Closing Day!
Closing day should be fun! It’s the completion of a journey and possibly the start of a new one.
If you have chosen a physical closing, I’ll meet you at the title office where you sign your papers. I’ll bring my camera to make photos of this important event for you. If you agree, I’d like to have a photo of us all for my scrapbook too!
The title agent walks you through all the documents as you sign them. If it’s a virtual closing, the process is faster. I’ll see you online! You digitally sign the documents after the recorded Zoom session for virtual closings.
Release Keys and Remotes
At least one key must be presented to the Buyer upon funding at closing through title or the Buyer’s agent. It can be a duplicate if there is a leaseback, or it can be the final key if it’s a clean handoff.
All keys, remotes and access codes to the house become the property of the new buyer upon closing and funding (unless otherwise agreed). Please arrange with me how you plan to make the exchange in the week leading up to closing.
Typically, the garage remotes stay inside the locked house in an agreed-upon hiding place. One key is in the electronic lockbox on the property.
The quickest method is to leave all keys and remotes inside the house on closing day and leave through the garage while using a keypad to close and lock the garage. Then, either agent can retrieve the key from the lockbox for title and/or the Buyers.
Utilities
Now, you can finally turn off the utilities to the house.
Funding
If both parties closed early in the morning, you should have the funds within a few hours of both sides signing. This is disbursed by title and often wired directly to your bank account. If your next property is a new-built home, I’ll hand you the keys as soon as I’m informed that the builder was funded.
If you have a double closing for both the sale of your home and the purchase of your next home, you should get the keys at the closing table if it funds immediately. Otherwise, I’ll get the keys and be authorized to give them to you after funding.
Mark M. Hancock, GRI, MRP, AHWD
REALTOR, New Build certified
214-862-7212
DFWmark.com
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