Selling Home

What Every Seller Needs to Know About Closing

Walk-throughs, closing costs, and other items to check off your list before the big finish!

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Closing time. The end of the road. The last hurrah — and hurrahs are in order.

If you’re here, then you’ve found a buyer, negotiated home repairs, and are ready to move out -- and on. But before you can make this sale official (and get paid!), you still have a few items to cross off your list.

Here, we’ve laid out everything you need to know to have a successful settlement.

Closing Is the Final Step

Closing, or “settlement,” is when both parties sign the final ownership and insurance paperwork, and the buyer becomes the legal owner of the home.

Typically, closing day takes place about four to six weeks after you signed a purchase and sale agreement. During this window, the buyer’s purchasing funds are held in escrow until all contingencies, like the home inspection contingency and appraisal contingency, are met.

Your agent will be able to answer questions and offer support through closing. Here’s what to expect from the process, start to finish.

Before You Close, You’ll Have a Final Walk-Through

Most sales contracts give the buyer one last chance to do a walk-through of the home within 24 hours of settlement. This is their chance to check that the property is in good condition, and to make sure the agreed-upon repairs were completed. 

In most cases, no problems arise at this stage of the transaction. (If something is amiss, your agent can walk you through it.) The final walk-through mostly gives buyers peace of mind knowing that you, the seller, have adhered to the conditions of the sales contract and home inspection-related repairs.

Related Topic: Sell a Home: Step-by-Step

Follow These Steps to Prepare for the Final Walk-Through

To help ensure that the walk-through goes smoothly, take these six steps ahead of time to prepare:

Step #1: Clean house. Your home should be spotless for the final walk-through. Assuming the buyer is taking ownership on closing day, you should be fully moved out at this point. But moving can be messy. After purging, packing, and moving, you may want to do one more deep cleaning. 

Step #2: Leave owner’s manuals and warranties. Make the buyer’s life easier by providing all manuals and warranties you have for home appliances. Print physical copies and put these documents in one place for the new owner. If you have receipts from contractors for repairs, leave them with the manuals. 

Step #3: Provide a vendor list. Give the buyer contact information for home contractors or maintenance companies that you’ve used in the past. These vendors are familiar with your home, and the new owner will appreciate having a list of servicers they can trust will take good care of their new home.

Step #4: Check for forgotten items. Do one more check throughout the home to make sure you’re not leaving anything behind. One exception: You may want to leave unused or leftover paint cans in the colors currently in use within the home — but confirm with the buyer first.

Step #5: Turn off water shut-off valves. The last thing you want before closing is a flood. With the buyer’s permission, turn off your house’s main shutoff valve 24 hours before closing.

Step #6: Lock up. Until settlement is complete, you’re legally responsible for the home — meaning you’d be liable if there’s a break-in before closing. So, the day before settlement make sure to close window coverings and lock the entry doors. If a house looks un-lived in, it’s a welcome sign to burglars. It’s a good idea to leave a porch light on, or to set an interior light to turn on and off with a timer.

If the final walk-through reveals an issue with the house, don’t panic. The standard protocol is for the buyer’s agent to immediately alert the listing agent that there’s a problem. Then, both parties work together to solve it. Typically, either the closing gets delayed or there's additional negotiation, such as monetary deduction of the sales price. In other words: There are options, and your agent can help you through this.

Up Next: The “Closing Disclosure”

Let’s assume the final walk-through is smooth sailing. (Woo-hoo!) What happens next?

You’ll get info about your closing costs from the title company. 

Meanwhile, the buyer’s mortgage lender must provide the buyer with a Closing Disclosure, or CD, three business days before settlement. This is a formal statement of the buyer’s final loan terms and closing costs. As the loan borrower, the buyer is entitled to a three-day review period to see if there are any significant discrepancies between their CD and Loan Estimate (LE) — a document buyers receive when they apply for a loan. The LE outlines the approximate fees the buyer would need to pay.

In most cases, there are no major differences between the CD and LE. However, if certain closing costs differ by 10% or more between the estimate and the disclosure, the buyer’s loan has to go back to the mortgage lender so that cost differences can be reviewed. If that happens, closing is usually delayed until the issue is resolved.

Expect to See These People at the Closing

The closing typically takes place at the title company, attorney’s office, or the buyer’s or seller’s agent’s real estate office. (Unless you live in a state that allows for electronic closings -- eClosings -- with remote notaries. In that case, the involved parties can opt to sign documents digitally.)

The list of legally mandated {{ start_tip 104 }}attendees{{ end_tip }} will depend on your state, but usually you’ll be joined by:

  • Your agent
  • The buyer
  • The buyer's agent
  • A title company representative
  • The loan officer
  • Any real estate attorneys involved with the transaction

Remember to Budget for Closing Costs

Closing costs can vary widely by location, but you’ll generally pay closing costs of 5% to 10% of the home’s sales price. So, on a $300,000 home, you can expect to pay anywhere from $15,000 to $30,000 in closing costs. In most cases, these costs are deducted from your proceeds at closing.

Closing costs for sellers typically include:

  • The commission for the listing agent and buyer’s agent
  • Transfer taxes or recording fees
  • Loan payoff costs
  • Unpaid homeowner association dues
  • Homeowner association dues included up to the settlement date
  • Prorated property taxes
  • Escrow, title, or attorney fees

Be Sure to Bring These Things to Closing

At the closing you should have:

  • A government-issued photo ID
  • A copy of the ratified sales contract
  • House keys, garage remotes, mailbox keys, gate keys, and any pool keys
  • A cashier’s check, or proof of wire transfer, if your closing costs are not being deducted from the sales price. (Yes, it’s OK to use a cashier’s check — especially if you don't want to deal with the hassle of a wire transfer, which can take time to clear. With a cashier's check, you're guaranteed the money you need for settlement will be there at closing.)

Don’t Forget to Dot These I’s and Cross These T’s

Before you rush off to pick out paint samples for your new place, remember to do these two steps that are often overlooked by sellers:

Transfer utilities. Don’t want to pay for the new owner’s utility bills? Coordinate with the buyer so that utilities — including not only gas and electric but also water and cable — are transferred to the buyer on {{ start_tip 103 }}closing day.{{ end_tip }}

Change your address. You obviously want your mail to be sent to your new home. Setting up a forwarding address will also ensure that you can be reached if there are any post-closing matters. You can file a change of address with the U.S. Postal Service here.

Finally: Celebrate!

At last, your home is officially sold. Congratulations! Give yourself a pat on the back — and then start settling into your new phase of life.

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What Every Seller Needs to Know About Closing - https://www.houselogic.com/sell/how-to-sell-step-by-step/home-closing-process/

By HouseLogic  |  Published: April 12, 2018

Visit HouseLogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.

 

Staging Your Home: How to Make Buyers Fall in Love

With these tips and tricks, your house will be swoon-worthy in no time.

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All the world’s a stage, said the Bard.

That includes your house. Which is for sale. And thus needs to look bee-yoo-tee-ful.

Staging entails hiring experts with a flair for interior design. They reimagine your living space and give your house a makeover (with temporary decor and furnishings) so that it gets “oohs” and “aahs” from the buying masses. 

Great staging isn’t an insurance policy — there’s no guarantee it will bring in more money when you sell your home — but it’s an important marketing tool. It presents your house in a flattering light and helps you compete at a favorable price. (In that sense, staging is like dressing your house for the price you want, and not the price you have.) 

Staging also leads to eye-catching listing photos, which are especially valuable given that most homebuyers begin their search by scrolling through listings online.

So, are you thinking about hiring stagers for your home? Here’s what to consider.

Staging Really Does Help. Like, a Lot.

But you don’t have to take our word for it. A recent survey from the NATIONAL ASSOCIATION OF REALTORS® revealed that:

  • 77% of buyers’ agents said staging makes it easier for their buyer to visualize the property as their future home. It’s like helping the buyer dream it so they can achieve it — and so you and your agent can make the sale.
  • 39% of sellers’ agents said staging a home greatly decreases the amount of time a house is on the market. For you, time saved could mean moving into your new house even sooner.
  • 21% of sellers’ agents said staging a home increases its dollar value between 6% and 10%. Simply put, that may lead to more money in your pocket.

Before You Stage, Budget Accordingly

Many listings agents offer staging services to clients as part of their services. If you want to use someone you find yourself, you typically will have to pay out of pocket.

Staging costs vary depending on where you live and how many rooms you’re staging. On average, home sellers pay between $302 and $1,358 for staging, according to HomeAdvisor.com. If your house is empty because you’ve already moved, you might also have additional expenses for renting furniture and other homey decorations to make it look lived-in.

Many stagers offer consultations for as low as $150, Fixr.com reports. Using the advice you learn during the consultation to try DIY staging may be your best option if you’re on a tight budget. Listen for tips on how to use the furniture and decor you already have to show off your home’s best assets.

Related Topic: Sell a Home: Step-by-Step

For the Best Results, Declutter

Spoiler alert: No buyer wants to walk into a messy house. 

So, take time to clean and declutter your home. Organize everyday household items into crates and keep them out of sight. Stow away seasonal decorations (that means no Christmas in July). Make time for — or invest in — a whole-house cleaning, including carpet shampooing. Change lightbulbs, finally make those minor repairs, and add a fresh coat of paint to any room that needs it. {{ start_tip 99 }}Clean out closet spaces{{ end_tip }}— because buyers will want to check out the closets.

Also worth considering? Removing personal items from view, such as copious family photos, artwork, or religious keepsakes. The concern is not that home buyers will be offended by you or your lifestyle. The goal is to neutralize the space and help home buyers imagine themselves living there. (But don’t go overboard. You don’t want rooms to feel sterile, either.)

Yes, we did just tell you to clean out your closets. So where are you supposed to put all this stuff? If you don’t have a discrete place to tuck things away, consider renting a storage unit. 

To Find the Right Stager for Your Home, Ask Questions

If your agent doesn’t offer staging services, he or she can likely recommend local stagers for you to work with. Before you hire a stager, it’s best to interview at least three candidates in person. You’ll want to get a sense of how much they charge — and whether they have good taste.

To do your due diligence, here are 10 questions to ask prospective stagers: 

  1. On average, how many days were your staged homes on the market last year?Experience is important, but it’s not the only factor to consider when vetting stagers. You want someone who stages homes that sell — ideally within 30 days, because that’s when agents often recommend making a price reduction if your house is still on the market.
  2. What price range do you typically work in? Staging luxury homes is a totally different ball game than staging starter homes. Find someone who specializes in homes near your listing price.
  3. What styles of homes do you usually stage? Staging different types of homes also requires different skill sets (think of a penthouse versus a bungalow, for instance). Look for someone with experience working in homes similar to yours.
  4. What formal training have you received? A number of staging organizations, such as the Real Estate Staging Association (RESA) and the International Association of Home Staging Professionals (IAHSP), offer certification or accreditation. Training from these associations can distinguish professional stagers from beginners.
  5. Do you have insurance? Your home could get damaged when the stager moves furniture in and out. Find someone with business insurance so that you’re protected.
  6. Can I see your portfolio? One of the best ways to judge a stager’s skills is to look at their work. Ask to see photos from the person’s three most recently staged homes.
  7. Do you select the accessories, furniture, and paint for the homes you stage, or do you collaborate with other experts? Some stagers work independently, while others collaborate with other vendors. Make sure you know everyone who will be involved in staging your home, so you don’t have surprise guests rearranging your living room.
  8. What are your rates? Some stagers charge a fee for decorating services, plus a monthly fee for renting furniture, while others charge a flat fee per room for the duration of the listing. Ask about how a stager determines costs before you commit to working with him or her. 
  9. What’s your availability? If you’re on a tight timetable, make sure the stager can get your house ready by the date you want to put your house on the market.
  10. Can you provide contacts for past clients? Get in touch with two or three people who have worked with the stager before. Ask how the stager’s services helped with the sale of their homes, and what they might have done differently.

Focus On the Rooms That Count the Most

You don’t have to stage your whole house to make buyers swoon. 

Staging the rooms where people tend to spend the most time usually makes the biggest impression on buyers. Start with the{{ start_tip 100 }}living room,{{ end_tip }}followed by the master bedroom and the kitchen. 

Keep in mind that you’re not going for an HGTV-worthy overhaul: Even small touches, like putting fluffy towels in the bathroom or replacing shabby throw pillows in the family room, can make your home that much more attractive.

Oh, and BTW: Stage Your Yard, Too

Your house has to look its best — inside and outside. After all, buyers form their first impression when they pull up in front of your home. It’s no surprise, then, that curb appeal — how your home looks from the exterior — can increase your home’s sales value up to 17%, a Texas Tech University study found.

If you’ve never had your yard professionally landscaped, now may be the time to do it. Landscaped homes have a sales price advantage ranging from 5.5% to 12.7%, according to research by Alex Niemiera, a horticulturist at Virginia Tech. That would mean an extra $16,500 to $38,100 in value on a $300,000 home.

Professional landscaping, however, can cost a lot. You’re aiming for polish, not a new garden of Versailles. If budget is a concern, start with these DIY improvements:

  • Plant blooming flowers and fresh greenery. Even if it's winter, you can add colorful winter blooms and seasonal touches such as garland or lights.
  • Mow the grass.
  • Reseed bare patches of lawn and add fresh sod, as needed.

Then move on to these easy upgrades to your home’s exterior:

  • Wash the front windows.
  • Power wash siding and walkways.
  • Repaint or stain porches and stairs, as needed.
  • Make sure house numbers are easy to see, visible, and pretty. 
  • Make sure important outdoor features such as the front door, porch, and sidewalks and paths are well lit. (If not, install new fixtures or lighting.)

Even basic upgrades — like laying fresh mulch, changing porch lights, or installing a new mailbox — can help a buyer fall in love at first sight. 

Just wait ’til they come inside and see what else you’ve done with the place.

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Staging Your Home: How to Make Buyers Fall in Love https://www.houselogic.com/sell/how-to-sell-step-by-step/how-to-stage-a-house/

By: HouseLogic  |  Published: April 12, 2018

Visit HouseLogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.

December Existing-Home Sales Jump

Washington, DC, January 20, 2011 Existing-home sales rose sharply in December, when sales increased for the fifth time in the past six months, according to the National Association of REALTORS. Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 12.3 percent to a seasonally adjusted annual rate of 5.28 million in December from an upwardly revised 4.70 million in November, but remain 2.9 percent below the 5.44 million pace in December 2009. Lawrence Yun, NAR chief economist, said sales are on an uptrend. December was a good finish to 2010, when sales fluctuate more than normal. The pattern over the past six months is clearly showing a recovery, he said. The December pace is near the volume were expecting for 2011, so the market is getting much closer to an adequate, sustainable level. The recovery will likely continue as job growth gains momentum and rising rents encourage more renters into ownership while exceptional affordability conditions remain. The national median existing-home price2 for all housing types was $168,800 in December, which is 1.0 percent below December 2009. Distressed homes3 rose to a 36 percent market share in December from 33 percent in November, and 32 percent in December 2009. The modest rise in distressed sales, which typically are discounted 10 to 15 percent relative to traditional homes, dampened the median price in December, but the flat price trend continues, Yun explained. Total housing inventory at the end of December fell 4.2 percent to 3.56 million existing homes available for sale, which represents an 8.1-month supply4 at the current sales pace, down from a 9.5-month supply in November. NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said buyers are responding to very good affordability conditions despite tight mortgage credit. Historically low mortgage interest rates, stable home prices, and pent-up demand are drawing home buyers into the market, Phipps said. Recent home buyers have been successful with very low default rates, given the outstanding performance for loans originated in 2009 and 2010. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.71 percent in December from 4.30 percent in November; the rate was 4.93 percent in December 2009. A parallel NAR practitioner survey shows first-time buyers purchased 33 percent of homes in December, up from 32 percent in November, but are below a 43 percent share in December 2009. Investors accounted for 20 percent of transactions in December, up from 19 percent in November and 15 percent in December 2009; the balance of sales were to repeat buyers. All-cash sales were at 29 percent in December, compared with 31 percent in November, but up from 22 percent a year ago. All-cash sales have been consistently high at about 30 percent of the market over the past six months, Yun said. Single-family home sales jumped 11.8 percent to a seasonally adjusted annual rate of 4.64 million in December from 4.15 million in November, but are 2.5 percent below the 4.76 million level in December 2009. The median existing single-family home price was $169,300 in December, down 0.2 percent from a year ago. Existing condominium and co-op sales surged 16.4 percent to a seasonally adjusted annual rate of 640,000 in December from 550,000 in November, but remain 5.2 percent below the 675,000-unit pace one year ago. The median existing condo price5 was $165,000 in December, which is 7.4 percent below December 2009. Regionally, existing-home sales in the Northeast jumped 13.0 percent to an annual pace of 870,000 in December but are 5.4 percent below December 2009. The median price in the Northeast was $237,300, which is 1.4 percent below a year ago. Existing-home sales in the Midwest rose 11.0 percent in December to a level of 1.11 million but are 4.3 percent below a year ago. The median price in the Midwest was $139,700, up 3.3 percent from December 2009. In the South, existing-home sales increased 10.1 percent to an annual pace of 1.97 million in December but are 2.5 percent below December 2009. The median price in the South was $148,400, unchanged from a year ago. Existing-home sales in the West surged 16.7 percent to an annual level of 1.33 million in December but remain 1.5 percent below December 2009. The median price in the West was $204,000, down 5.6 percent from a year ago. The National Association of REALTORS, The Voice for Real Estate, is Americas largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries. Article Courtesy of: National Association of REALTORS