Selling Your Home: Overview
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Step 5: Fill out Any State-Required Forms
The buyer will probably shoulder the main paperwork burden in this transaction—preparing the purchase contract. However, in a few states, the seller prepares the contract after a preliminary offer from the buyer. And, in many states, the seller is responsible for filling out a disclosure form, telling buyers what they know about the property's physical condition. For more information, see Required Disclosures When Selling Real Estate.
Step 6: Advertise and Show the House
Advertise and market. If you're working with a real estate agent, the agent should help put the property into the online Multiple Listing Service (MLS) and, hopefully, have photos taken and then create a website for your house, send out flyers or postcards, and place an ad in the local classifieds. If you don't have an agent, you can take the same steps yourself. Then interested buyers can make an appointment to see the house in person.
Arrange private showings. Seriously interested buyers might want to see the house before you hold an open house, or just have the place to themselves, along with their agent. The most convenient method all around is to place a lockbox on your house, which agents can access in order to get your key. But a lockbox tends to be inconvenient if you're actually living in the house. In any case, your agent can help with scheduling and showings. If you're not working with an agent, you'll need to arrange and be available for these showings yourself.
Hold an open house. Many home sellers find open houses a useful tool. They're certainly good for bringing in the crowds. Some of the visitors will merely be curious neighbors. Welcome them, too—they may mention your house to their house-hunting friends. Others will be genuinely interested buyers, including some who were reticent about making an individual appointment. For more information, see Holding an Open House.
Step 7: Receive and Review Purchase Offers
With any luck, one or more prospective buyers will present a written offer to buy your house. (If you're in a hot market, you may want to set a deadline for receiving such offers and schedule back-to-back presentations by the buyers' agents.)
Evaluate the offer or offers. Here's where your real estate agent can play an important role, meeting with the agents who present offers and helping you decide whether a particular offer is worth accepting. If you're choosing between more than one offer, don't assume you'll want to accept the one for the most money! A high bid with shaky financing, or one made contingent on the buyer selling his or her house first, may actually belong at the bottom of your pile. You don't want to enter into negotiations only to have them fall through.
Consider a counteroffer. If none of the offers you receive are acceptable, you can counteroffer, suggesting changes in terms or even a higher price.
"In contract." After counteroffers have gone back and forth between you and the buyer, and you've both signed off to indicate your acceptance, you're technically "in contract" to sell your house. At that point, you're legally bound to sell your house, and can't change your mind without potentially facing a lawsuit. (The exception is if you included conditions or "contingencies" in the contract, such as the buyer furnishing you with proof of his or her financing, and these conditions aren't met.)
Step 8: Closing the Deal
The signed purchase contract will include a closing date or time limit, usually several weeks in the future. During this time, the buyer will line up financing, inspections, insurance, and more. As the seller, your main duties will include:
- making your house available for inspection
- negotiating with the buyer over repair issues that come up, and
- moving out your possessions.
You probably won't meet with the buyer on the closing date. Usually the two of you sign various documents separately, in the office of your escrow agent or attorney.
Once the closing occurs, the buyer has the right to full possession of the house. If you can't be out by that date, you may be able to negotiate a short-term rental agreement with the buyer. For a more detailed discussion of your role during escrow, see Escrow and Your Role as Home Seller.
After the Sale: Tax Considerations
Assuming you make a profit on your sale, you might have to pay capital gains tax. The IRS website at www.irs.gov can tell you more. Also see Tax Breaks for Selling Your Home: Read the Fine Print.
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