12 Weeks to Buying or Selling a Home: Week 4
A Real Estate Series
Wow! I can’t believe we have already made it to Week 4 of our series. I truly hope you have learned something useful thus far and are ready to learn some more about the real estate world. This week I will help buyers understand what happens once their offer is accepted and explain the showing process to sellers. Let’s learn!
Buyers:
Offer accepted! Woo! This is one of the most exciting things buyers get to hear after spending weeks or even months searching for the right home. But you aren’t done yet! There are still several pivotal steps you have to get through before you can safely say the home is yours. Let’s jump right into what those steps are now:
Earnest money delivery. Earnest money is the “promise” you give to sellers that you are actually serious about following through with the purchase of their home. Typically this ranges from $500 up to 1% of the purchase price of the home. This number can be negotiated, and your agent will help talk you through this part! Once an offer is accepted, you typically have 24-72 hours to deliver your earnest money check (in the form of a personal or certified check from YOUR bank) to either the other agent or the title company. The amount of the check is then deducted from the amount you need to bring to closing. If for some reason the deal falls apart and you never make it to the closing table, there are a number of different ways to get your earnest money back such as if you back out of a deal because of inspection items or the home receives a low appraisal with no resolution. The only way you will lose this money is if you just up and decide one day that you no longer want the house for no reason. We have had very few instances where this has happened - make sure your agent fights to get that money back for you!
Inspection. Immediately after the offer is accepted, it is important to get an inspector on the books to take a look at the home! This is going to cost you between $300-$600 depending on what additional items you may ask to be inspected (water tests, radon tests, etc.). In 2021 and 2022, there were many buyers who waived inspections to beat out other offers - this is a HUGE risk to you and we highly advise never taking this step no matter how desperate you are to find a home. The inspection is going to give you a thorough look into the condition of the home and you will be given the opportunity to ask the seller to fix faulty items that come up on the report. There are a few things that can happen during this process - the seller agrees to fix some or all of the items, the seller lowers the purchase price to reflect the needed work, or the seller says “no”. At this point, you as the buyer have the option to move forward or back out of the deal. Again, your agent will help you through all of this!
Appraisal. When purchasing a home using lender financing, you will be required to pay for an appraisal on that property (which costs approximately $500-$600 depending on the lender). The lender will order this appraisal and the appraiser will schedule a time to view the property and create a report. Typically, the most daunting part of this process is whether or not the home’s value comes in at or above the purchase price on the contract. If it comes in lower, the seller will have to come down on the price, you both meet in the middle (which means YOU have to bring cash to the table to cover the difference), or the seller decides they don’t want to budge on the price at all. Appraisals unfortunately can be deal breakers, but most of the time we are able to work our way through them. Make sure you talk to your agent about what your options are when this happens! Another aspect of appraisals are required conditions that must be met before closing. This is very common with FHA and especially VA loans. These appraisers will often “call-out” items in the home that must be fixed before proceeding to closing such as peeling paint, broken windows, missing shingles, etc. It is very important that you have an agent who understands the different types of loans so you can avoid this all together in the first place. An agent who understands VA loans for example will likely steer you away from a home that has very obvious issues that will come up on the appraisal report.
As you can see, there is a lot that happens past an offer being accepted and it is not always rainbows and butterflies! The entire process from start to finish takes around 30 days to complete (sometimes more and sometimes less). I cannot stress to you enough how important it is that you have an agent and a lender who both know their “stuff” and can help make this process smooth for you.
Sellers
Last week we talked about what “listing day” looks like, and now I’d like to focus on what the showing process looks like once your home is live on the market. Here we go:
Showings start rolling in. Over time you will have scheduled showings starting to pop up! You and your agent can set this up one of two ways - you can have all of the requested appointments sent to you for approval or you can give the agent permission to approve these appointments instead. The second option works great if you no longer live in the home or you do not want to be bothered with all of the requests. This is entirely dependent on what works best for your situation!
Agents bring buyers to view the home. During their scheduled showing times, agents will begin to bring their buyers to your home to take a look! It is important that during this period of time you try to keep your home as clean and mess-free as possible (I know - this is tough especially with pets and kids) and have a plan for where you will go during showings. This can be a stressful time for sellers especially when the home takes a few weeks to sell, so it is important to have a solid plan to make this process easier. For example, when my family and I were in the process of selling our home, we had a family member keep our pets and we moved all of our extra “stuff” to a storage unit temporarily. This may not work for everyone but it worked for us! Ask your agent for tips and tricks for an easier experience with this step.
Open house. Your agent will likely offer to do an open house for you on the home. If this seems like something you do not want to do, you should never feel pressured to allow this. We have had clients in the past who really were not interested in having a bunch of people (i.e. nosey neighbors) wandering through their home. You may also feel like this is a great way to get a lot of potential buyers in at one time! Either way, this step is entirely up to you and your agent should be willing to do it for you if you want it!
Offers start coming in. At some point you will start to receive offers! It is important to understand that this may happen right away or it may take weeks and a couple of price drops. This may be 1 offer or it could be 10 depending on the home you are selling and how hot the market is at that time. The offers will likely all be unique and offer different things to you! Your agent’s job is to communicate all of these offers with you when they receive them, and to advise you on the advantages and disadvantages of each one. Unfortunately I have heard horror stories where agents did not properly communicate to their clients about their offers and in the end, they felt taken advantage of in the situation. Be an advocate for yourself and make sure your agent is doing everything they can to help you make the right decision! Once you choose an offer that fits your needs best and you can agree with a buyer on terms and price, it’s time to move forward with an accepted offer!
This is a long process guys! Selling a home does not happen overnight and as I mentioned countless times above, it is important to have an agent in your corner who is going to fight to get you exactly what you deserve.
Join me for Week 5 of my series where we will tackle the “bad” stuff - i.e. what can go wrong? We will start by discussing inspections and what this can look like for both buyers and sellers. Happy reading!
About the Content Creator:
Courtney Burke is a real estate agent and co-owner of Welcome Home Realty Group, LLC located in Franklin, Indiana. She spent 9 years as a Biology teacher at Franklin Community High School but left teaching in 2021 to pursue a career in real estate alongside her husband, Chris Burke, who has been in the business since 2014. She uses her background in teaching to educate her clients on the steps to home buying, selling, and investing and help them reach their goals.
For more information, contact Courtney at 317-416-3073. You can also visit her website at www.whindiana.com.
