Are you thinking of selling property in Massachusetts? If so, make sure you fully understand the selling process prior to making a move. Many first time sellers have experienced the property exchange process from the buyer’s perspective but are often unsure of themselves as sellers. From the time you accept an offer to purchase there is about a 45 day period before the closing day and transfer of ownership. During this period of time there are many things that need to be done on both sides of the transaction to ensure a smooth transition from one owner to the next. Below is the home selling process (and timeline) from the view of the selling party.
After hiring your real estate agent they will immediately start marketing your property for sale. There are several marketing methods used depending on the type of property and the selling party’s wishes. Some investment property sellers prefer not to have a “For Sale” sign placed on the property or conduct any “Open House” in fear that is will negatively disrupt their relationship with their tenants. In these cases your agent can work closely with you to create another plan of attack for marketing including various internet strategies.
(Day 1) Offer to Purchase & Negotiation:
Your property has been successfully marketed and in and ideal situation you receive multiple offers from potential buyers. Your real estate agent will sit down with you and discuss the pros and cons of each offer received. Don’t assume that the buyer with the highest price is always the winner in this case. The terms of the offer are also very important as well as other factors like where the buyer is obtaining financing and the buyers overall financial strength. Often you will find that it makes a lot of sense to accept an offer slightly less than another if the buyer is paying cash and can close without the extended time table that is required with most banks. Often there is a lot of back and forth between you and the buyer before the final details are nailed down.
(Day 3) Home Inspection:
After both parties come to an agreement on price is terms the buyer is typically allowed 10 days to inspect your home for damages and other items that are hard to detect or just not apparent to an inexperienced buyer. A professional home inspector is usually hired to walk through your property and assist the potential buyer in locating potential issues. If there are (what the buyer determines to be) substantial issues located the buyer has 3 choices.
- Move forward and purchase the property with the original price and terms.
- Renegotiate the price originally agree upon to reflect the new information.
- Walk away from the transaction all together.
(Day 15) Purchase & Sales Contract:
Assuming we end up with items number 1 or 2 from above and the buyer is going to move forward with the purchase, both parties would enter into the purchase and sale contract. At this point both parties want to hire a real estate attorney to represent their interest in the contract. This document will lay out all the details of the sale including, when the buyer must have his mortgage company commit to the loan, the responsibilities of the seller, and when and where the closing (passing of papers) will take place. The buyer is also going to place a large deposit in escrow as consideration for the deal. This deposit is typically 5% of the total purchase price.
(Day 25) Appraisal:
Most buyers will need a bank to finance the purchase. Banks require that they have independent professional determine the value of a property before they will lend money on that property. Shortly after the purchase and sales contract is signed an appraisal of your property will be done to determine its value. Your real estate agent can assist you with the details of the appraisal process.
(Day 35) Smoke Detector Inspection & Final Water Reading:
As the Seller, you are required to obtain a Smoke & Carbon Monoxide Certificate from the local Fire Department. All smoke detectors must be photo-electric. Your real estate agent will come to your home prior to the date of inspection and be sure to place all required smoke and carbon detectors appropriately and verify they are in working condition. If you cannot be present during the smoke inspection your real estate agent can cover the appointment for you. Your agent will also order final water readings for you. This final read will determine what you owe the municipality for water at the date of closing. After this amount is paid, future water bills will be sent to the new owner.
(Day 45) Final Walkthrough & Closing
Prior to the closing the buyer will typically requests a final walk through to inspect the property. At this point you will want to make sure the property is completely free of personal items, trash and other materials that may deter the buyer from closing. If you are selling a tenanted home, you will want to notify your tenants that you will no longer be the owner and provide them with the contact information of the buyer. You will also need to turn over any tenant security deposits held. Either you or your real estate agent should be present at the closing with the house keys, tenant contact information, leases, and the original smoke certificate.
The final arrangements for closing are in the hands of the lending bank’s attorney. It is often not until the last minute that the closing time and place is determined. This can be very inconvenient for all parties involved. With this in mind, keep your schedule open around the closing date.
Still have questions about about buying or selling? Contact us at 617-297-8641 or Willie@MandrellCo.com. You can also read more about how we assist our clients by visiting our sellers page!