You have an official contract on your home! You're past the hustle of open houses and hours of waiting for important texts and phone calls. It's logical to wonder what happens after your home goes under contract.
First, it's best to talk with your real estate agent about the process. They’ll have specific details like dates and appointments that align with your contract. They may even have standing relationships with other real estate professionals on your team, like the home inspector or appraiser, so they may have insight into a possible timeline. Typically, it's a good idea to expect a 30-to 45-day cycle before the closing date.
However, if you’re selling your property as a for sale by owner (FSBO) or just want to shore up your knowledge of the process, there are resources in this blog to help. Start with this brief video from an experienced real estate agent, Karen Hall. She’s helped hundreds of military home sellers through the closing process.
Now that you have an idea of what to expect, let's dig into the details.
What’s an Escrow Account?
You’ll probably need to open an escrow account for your transaction. An escrow account is a safe place (a third party, like the broker or real estate attorney who manages it) for the buyer and seller to store their money until the home sale goes through. Most of the time, unless you choose a FSBO, your agent will help you open the account.
What to Know About Closing Costs and Fees
How Much Are Closing Costs for Sellers?
Traditionally, home sellers pay for most of the closing costs and fees. In typical circumstances, most sellers pay between 6% and 10% of the final sale. Part of this includes about 6% of the total sale paid to the buyer's and seller's agents, but you can negotiate some costs, such as your agent’s commission rate.
You can also negotiate with the buyer to split the fees as part of the home selling process. This is more likely in a strong seller's market. There is some flexibility on when you pay: either on closing day or by having it deducted from the home price. If you want help planning for what you’ll eventually pay, use an online closing cost calculator for sellers.
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Get Ready for the Home Inspection and Negotiations
Who Pays for the Home Inspection?
Your buyers will likely insist on and pay for a home inspection. Buyers often accompany their real estate agent and the inspector during the process. After the inspector returns the report, the buyer and their agent discuss the findings and present you with their negotiation points.
After you review their asks, it’s common to consider reducing your sale price, offering the buyers credits, or making the improvements or repairs yourself. The buyers also have the right to request health and safety certifications verifying the roof's condition, a termite inspection, and a sewer inspection. You’ll need to show proof on closing day.
Before closing, your state likely requires you to submit a property disclosure report that details any issues that could change the home’s value or affect the safety requirements. The home inspection and negotiation process could take several days, depending on the inspector’s availability and the extent of the negotiations.
Reading Why You Need a Home Inspection could save you time and money.
The All-Important Appraisal Process
The appraiser holds a lot of power during the sale process because everyone waits, typically two to three weeks, for the appraisal report to be finished before the sale. If you want to use your VA home loan, an appraisal is required. The appraiser’s opinion affects whether the buyer’s lender decides the property is a solid investment and whether it's a good idea to loan money (and how much) to the buyer.
Appraisers not only measure the property against comparables in the neighborhood, but they also check for issues, including structural problems like a cracked foundation, review local market trends, and examine the size and overall condition of the house.
Closing Day
After resolving issues from the home inspection and appraisal, you can move towards closing.
If local, you’ll meet to sign documents and drop off the keys, but it's common for military home sellers to manage the transition remotely with their agent’s representation and the magic of e-signatures, overnight mail, and wire transfers. Prepare your documents and information in advance so they’re ready on closing day. Your agent will walk you through each step in person or from afar.
Every closing day is different, but you’ll need to bring standard documents, like your ID and a copy of the ratified sales contract. If you want to pay the closing costs upfront, you’ll supply a cashier’s check. Then, if all goes well, your escrow agent will close the account after they’ve transferred all of your proceeds and the deed to you or the lender.
There are many steps to take after you’ve ratified your contract, but experienced real estate agents know exactly how to tackle the tasks, so the process should run smoothly if there aren't major problems uncovered during the home inspection or appraisal. If you take the steps to prepare for your home sale, the process could go quickly and smoothly.
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