HomeSaleDIY: Buyer & Seller FSBO Info

 

After Finding a Buyer...

 

Congratulation on finding your homebuyer!

 

This means you've done well preparing & marketing your home and all the hard work can finally get paid off.

 

Now is the time for you and the buyer to sit down and go over several important things before completing the sale of your home. Try to negotiate on your turf without intentionally deceiving the buyer. Remember that the buyer can always back out from the sales leaving you starting all over again!

 

1. Negotiating the price of the house, the amount of cash down, the amount of cash to be paid at closing, the amount that might be paid at a later date, who pays for what, personal items that go with the property, any repair needs to be done, the move-in date, and so on.

2. List every personal property that will be included with the sale.

3. Make a list of all the defects in the property. You do not need to reveal all the defects to the buyer during initial offer. Some states require the seller to provide a written disclosure statement, stating detailed condition of the property, to the buyer. If in this case, it is recommended that you, the seller, give the disclosure statement to the buyer as soon as the deal is made and make sure the buyer signs an acknowledgment that he or she has actually received the statement. This would help in case the buyer is still shopping around and then back out from the deal.

4. After accepting an offering price, you and the buyer should sign an Offer to Purchase (also called Binder Agreement) stating you and the buyer have agreed to the price stated and the buyer has the option to negotiate a final contract with you within a limited period. You can ask the buyer to place a 'good faith' deposit making sure the buyer is serious about the deal.

5. Arrange for a home inspection. The buyer can either personally inspect the home or have a state-licensed inspector to perform the inspection.

6. Work with the buyer to complete Purchase/Sales Agreement. This is the single most important document in the entire deal! Make sure every term/condition in the agreement is recorded clearly: name & address of the Seller(s) and Buyer(s), legal description of the property involved, the purchase price & mortgage terms, personal property items included in the sale, special condition of the property at time of sale, catastrophe clause, time and place of closing, 'subject to' clause, adjustments to be made at closing, and most importantly, both the Seller(s)' and Buyer(s)' signatures! If you or the buyer is uncertain about certain terms within the agreement and needs legal advising, you can obtain consultation from local real estate lawyer to explain and supervise the whole signing process.

7. Arrange title search on the property. You and the buyer can arrange it thru a nearby title insurance company or search the title record by visiting the local public records office (normally in the county clerk's office) and ask to look through the property records. If the buyer obtains loan from a mortgage broker to finance the purchase, a title search will be requested by that broker.

8. Buyer obtains financing. Usually the buyer places a down payment, about 20 percent of the purchase price, and obtains a mortgage loan from a bank or mortgage broker to pay for the remainder 80 percent. Of course there are other ways the buyer can pay for the property. But most important, both the buyer and the seller must agree on the arranged source of financing.

9. Handling the closing process. You can choose to handle the closing yourself or by an escrow agent. The closing process has much paperwork involved and requires some legal knowledge and experience. Visit a nearby escrow office to find out the type of services offering. If the buyer obtains loan from a mortgage broker to finance the purchase, escrow service can be provided in-house by the mortgage broker or thru partnered companies.

10. Important things to do at the closing session. You should make a list of everyone attending at the closing with name, address, and purpose attending. Go over all the paperwork with the buyer to make sure every term/condition is clear, accepted and signed. All signatures signed by the seller and the buyer must be notarized by local Notary Public. Be sure to remind the buyer to record the new deed with the county clerk's office. (If completing the closing without an escrow officer) This is to protect both the buyer and the seller of any unforeseen liability. Seattle all the closing costs and pay up each own share. Arrange for the money transfer and notify necessary authorities of the change in ownership.

11. Don't forget things to do after the closing! The buyer would need to notify the hazard/fire insurance company and mortgage company (if any old mortgage) about the new ownership and open new accounts with the local utility and telephone companies.