A Guide To Selling Your Home – Part 7: Closing The Selling Process
Selling your home is a big transaction in your life, so it’s always natural to feel excited when you receive your first offer. Once a buyer makes an offer to you, you should closely check every detail of the offer. The first step as you start to receive offers on your property is to check and be ready to negotiate them.
In this Seventh Part of our “A Guide To Selling Your Home”, we’ll make you learn about closing the selling process.
Reviewing Your Offers
If you need to sell your home quickly, then it’s worth paying attention to your first offer. In fact, some of the best offers usually come at the beginning which you should consider very seriously. If you have more than one offer, take time to check them very carefully. Besides the sale price, these offers may include some variables that you can take into consideration.
However, If you are not in a rush to sell your home, then you can wait for an offer that meets your needs. So, without getting afraid, you should wait and see what offers roll in the following days and months.
Now, you can start the negotiation process by accepting the offer or rejecting it, or countering it. It is followed by successive counter-offers between you and the buyer until a mutually satisfactory agreement is reached or the negotiations collapse.
Price Negotiation: The price negotiation revolves around the price that you set for selling your home. So, keep a fair and reasonable price to avoid any contention.
The Asking Price vs The Bottom Line: It’s always essential to work out your strategy in advance and decide on your asking price and bottom line price. Always keep the bottom line price as your secret and never mention this figure to your counterparts during the negotiation.
You can keep the asking price slightly higher than the appraisal rate in a seller’s market or If your home is located in a prime area. This will give you enough space to come down a bit during price negotiation without having really given anything.
However, in a buyers’ market, keep the asking price at the appraisal rate and also sell the features and benefits of your house.
Negotiating Beyond The Price: Generally, the selling price of your home remains the center point of any negotiations. However, when a buyer makes an offer on your home with some other terms then these terms should be carefully reviewed and clearly understood by both of you and the buyer before moving ahead with the final negotiations.
Therefore, when you have an offer in your hand, you should not only look at the price factor alone but also at other terms and conditions of purchasing that can definitely influence the last deal. For instance, the amount of earnest money by the buyer, payment of transfer taxes, closing and possession dates, the need to move in immediately, the need to acquire financing from a financial institution, etc.
If the buyer’s offers are not meeting your needs then you can return them with the counter-proposals. The counter offers can include working on the price or including further terms and conditions before you agree to a sale.
These counter offers can buy you more time and allow you to analyze other offers thoroughly. Besides, it also helps you in keeping the door open to further negotiation by keeping your property on the market for a longer period of time. Always keep the negotiation friendly even if it breaks down. It makes the buyer comfortable about approaching you again if he is interested in the deal.
Rejecting An Offer
Be prepared to reject the offer If it doesn’t meet your expectations due to its terms and conditions or low sale price. Simply, turn down those offers that are unacceptable or incompatible with your goals.
Accepting An Offer
If you find the offer agreeable, then you can decide to accept the offer and close the negotiation. The next step is to complete all other terms and conditions of the sale and be ready to sell your house.
Finalising The Sale
Once you have negotiated and accepted an offer, it’s time to close it and sign the contract. If you accept the offer then a legal agreement or a purchase agreement is made by legal counsel. These contracts enable both the party to set a sale price, and also include many clauses for specifying various terms of buying, such as the closing and possession dates, the deposit amount, and a variety of other terms and conditions.
Your signed acceptance of a written offer becomes your sales agreement. Document all items and details thoroughly that you previously agreed upon. Make sure that whatever is to be included in the sale deed is clearly documented.
A buyer who is willing to put down a deposit is a serious buyer. This is a clear sign that the buyer is extremely interested in purchasing your house and seeing the transaction through. However, a large deposit shows greater interest, because it indicates that the buyers want to show you how serious they are and that they want a fast transaction. This is also a good sign that the buyer is financially stable enough to buy the property.
However, in many cases, you will receive offers with small deposits. A small deposit could also be promising, but it indicates that the buyer will most likely need to get financing from a third party. If your buyer’s lender isn’t working properly, it could make the sale slower and more complicated. So, check in with your buyer several days before the closing and make sure that the buyer and his lender working together for a smooth transaction of loan process before the final settlement.
Check every detail of sale documents very carefully in advance to keep your closing on track. In fact, double-check the loan and down payment amounts, spelling and, all personal information as they are the most common error in the sale documents. The sooner you spot a problem, the faster you can get it fixed.
This is where having a real estate agent on your side is important as he will help you with the all necessary closure processes in the selling of your home.
Loan Payoff: If there is any lien, you’ll need to get in touch with your lender and inform them of your intent to sell your home before the final settlement. You will need to pay off any existing liens on the property, including your mortgage balance, and any property taxes owed until the date of closing. Your buyer will insist on a clear and problem-free title before closing.
However, if there are no liens, you may be asked to sign a document swearing there is no possibility of a lien being placed against the property.
On the closing day. the final papers are signed and the transfer of title gets registered at the concerned authority’s office. The deed is the instrument for transferring title. Finally, the ownership transfers to the buyer when the signed deed by both the party, which includes the legal description of the property, is registered at the sub registrar’s office.
Finally, the handing over of the property to the new owner is the final step in selling your home. Remember, until the deal is closed and the new owner takes possession, you’re responsible for maintaining the home.
Ajay Verma is a founder and writer of The Housing World, a real estate and mortgage news website. He brings with him 20+ years of rich experience in the real estate and mortgage industries. He has worked in senior roles in Delhi and NCR in the above-mentioned sectors.