The process of selling your home can be long and arduous, and when someone finally makes an offer you’re willing to accept, you can be forgiven for breathing a sigh of relief. But, hold the champagne, it’s not over yet!
After you sell your home, there are still a number of things to do, and still some margin for error. It’s good to know what to expect after you’ve accepted the offer, and what could potentially go wrong.
Amend listing status
The first thing your agent will be required to do after you’ve accepted an offer is to amend the listing status of your home. The majority of multi-listing services (MLS) require this to be done within 3 days.
However, there are a few things that can still go wrong within these first few days. For example, the buyer may decide to pull out of the deal. This could be for any number of reasons, such as buyer’s remorse, putting in multiple offers, or failure to secure financing. None of this is the seller’s fault, but if your listing status is switched from active to pending, and then back to active, it will be marked as ‘back on market’, a term that carries unfair negative connotations, and one that can make your home less appealing to other buyers.
Enter the escrow process
When the seller accepts an offer, the transaction enters the escrow process. This is a legally binding agreement taken out between buyer and seller, in which they agree to carry out certain tasks in the run-up to closing. A third-party escrow agent, often a solicitor or other legal representative, acts as an intermediary between the buyer and seller.
The first task to be completed upon entering escrow is generally for the buyer to deposit their earnest money deposit; this acts as a show of good faith and ensures the buyer is serious. Other tasks include making any agreed repairs, filling in paperwork, and depositing the down payment. The escrow process generally lasts for 30 days, although either party can request a longer or shorter period.
Inspection and appraisal
The results of a home inspection can make or break a real estate deal, which is why it’s always best for sellers to have a pre-listing inspection, in order to prevent nasty surprises. Most buyers will make a conditional offer, which is often dependent on the result of the home inspection. If the inspection reveals structural damage or major repairs, negotiations can open up again, and the buyer might request you make the repairs, or reduce the sale price to absorb the cost. Minor issues may also be brought up, and buyers can again negotiate. You’re not obliged to accept these new offers, however, though you run the risk of the buyer pulling out.
The appraisal is another nail-biting phase, though risk can be mitigated by having your property appraised before listing. A certified appraiser will carry out a quick inspection of your home, and calculate its value based on comparable sales in the local area. If the appraisal price is lower than your sale price, lenders will typically not approve financing for the buyer. Once it has been appraised at sale price, you’re almost done!
After a successful inspection and appraisal, and any agreed tasks and repairs are completed, the buyer will be required to secure financing for their mortgage, as well as insurance. During this time, you’ll be required to make preparations to vacate the property. There are many things to remember, and it’s worth creating a full checklist, but be sure to forward your mail, contact utility providers, and pack everything away.
However, the sale could still fall through at this last hurdle, as mistakes in mortgage underwriting are rife. The buyer’s lender might not have checked all the facts, or new information could have come to light that makes lending impossible.
The final days before you relinquish your home and can move on are relatively simple. When all parties are satisfied that any repairs and requests have been carried out, all the final contracts will be signed and passed onto the escrow agent and financial institutions.
A closing day will be set, and you’ll need to ensure you’ve vacated the property by then. On closing day, both the seller and buyer will meet their agents at a title company. Here, they’ll sign the final contract, which details each party’s acceptance of the property’s final status. Finally, the sales funds will be sent to your account, and you’ll be required to hand over the keys.