Acquiring an Agent
Your home is your biggest asset (most likely!) so choosing the right agent to sell it for you is vital. Once you have decided that you want to sell your home, it is time to find yourself a representative agent. This person will work with you to establish the market value of your home, based on current trends with similar sized properties in your location. They will also serve as your representative in the marketing, negotiation and selling processes.
Please note that depending on the circumstances, agents can have different levels of representation. An overview of what this can look like can be found in this NY Times article. It is very important that you discuss this with any potential agent before you agree to work with them, as they will ask you to sign an Agency Disclosure Agreement as a legal requirement before you start to work together on an official basis.
Valuing Your Property
Your agent will work with you to establish a price for your property that is realistic. This will be based on its location, condition, unique features and an analysis of the current state of the market. Your agent will be able to guide you through this process.
You will also need to consider and discuss with your agent your planned sales-timeline – if you are looking for a quick sale, a more competitive listing price would be advisable. If you are in no rush, then a price at the higher end of the market span could work for you.
Your agent will also be able to advise you on any work required or presentation strategies which will enhance the property’s selling appeal.
Attracting Buyers to Your Door
Your agent needs to ensure that your property is brought to the attention of as many viable, quality potential buyers as possible. To that end, the agent requires a comprehensive marketing plan that will highlight your property’s unique selling points and desirability. This will include a wide range of tools and strategies, including social media, listing websites, local and national press, open houses, mailings etc. An agent who works for a high-profile, reputable real-estate agency – such as Douglas Elliman – will be able to bring to bear the agency’s sales-networks, experience and substantial marketing resources at its disposal to help achieve that sale.
Negotiating the Sale Price
Once a prospective buyer decides to enter into negotiations with you about the final sale price, they will usually start with the submission of a written offer by their agent to yours.
This is usually followed by a process of backward and forward counter-offers until an agreement is met on the terms of sale. This takes the form of an Acceptable Offer (A.O.) which will include the purchase price, any items left in the property to be included (e.g. furniture, features etc), a projected closing date, and any other conditions and contingencies (e.g. inspection results, financing conditions, etc.).
If included as a contingency in the A.O., the buyer will have the opportunity to conduct any professional inspection(s) that they deem necessary. Based on the results of the inspection(s), both sides will come to an agreement on what needs to rectified and what can be left as is.
It is important to note that up until both parties go into contract, you, as the seller, are free to entertain any other offers that may come in. As such, it is in the prospective buyer’s best interest to complete all of their inspections in a timely and efficient fashion. Not until this point can the process move forward to the drawing-up of a binding contract.
Drawing Up the Contract
Once the A.O. is finalized and agreed upon, a written Memorandum of Agreement is drawn up by the seller’s agent, which includes the terms of the A.O. This is then shared with the seller and buyer and their respective agents and attorneys.
Based on the MoA, the seller’s attorney will draft a contract of sale to be delivered to the buyer’s attorney, together with legal documentation for the property, such as title deeds, survey reports, certificate of occupancy etc.
Once signed, they contract is returned to the seller’s attorney with a 10% contract deposit (down payment), which is held in escrow until closing.
The buyer will then be able to complete their mortgage application, if this is their means of financing the transaction.
Once in contract, the buyer’s attorney will undertake a title search of the property on their client’s behalf. A title insurance policy will be drawn up to protect the lender (and the buyer, if so wished) in the event a title problem arises in the future. This will also be accompanied with a property tax search, a violations search (required by the lender), and a survey inspection. If the existing survey is problematic, or doesn’t exist, it is typically the buyer’s responsibility to pay for a new survey.
Final Walk Through
A final walk-through of the property is performed just prior to closing, usually on or close to the scheduled day of cloning. This is to confirm that there has been no additional damage since the inspection; that all included appliances are in acceptable order and that the property is actually vacant and acceptable clean. If there were a number of agreed upon inspection issues to be addressed, that required substantial work, the buyer is likely to want to do an additional walk-through a week prior.
A closing date is scheduled once the contract conditions have been met in their entirety. This involves a meeting of all parties, which will include the seller, the buyer and their respective attorneys and agents, as well as the title company representative. Deeds, keys and checks are exchanged and all necessary documentation is signed and finalized. In advance of the meeting, your attorney will advise you of all costs required at closing.
Disclaimer: The information above is only intended as a summary guide and not as a comprehensive treatise on the process of buying property. It is essential that you retain and consult appropriate and qualified legal representation to guide you throughout the process once you decide to proceed.