Your home has sold, and you have an accepted offer on your new home. Now what? I hate to be the bearer of bad news, but that doesn’t mean the process is over. Things can still fall apart. Or get delayed. And disagreements can occur. But in the end, it will be worth it.
This post is to let you know what the process is like. I realize that buying and selling may be different depending on where you live. I know some people use attorneys for the process. Here in California, realtors are used. If you are buying a property, your realtor may be referred to as a buyer’s realtor. And likewise, if you are selling your home, your realtor is a seller’s realtor. Most likely, your realtor will represent you in both transactions. Other realtors will represent the buyer of your home and the sale of the home you are purchasing.
Other Possibilities
It is possible for a realtor to represent both the buyer and seller. I would not venture to go this way unless you know the other party and have figured out most of the terms ahead of time. In a case like this, the realtor may reduce their fee somewhat because he/she gets a commission on both sides of the transaction. There is always a chance of disagreement, and I feel more comfortable having my realtor on my side, not both of our sides.
And there is the for sale by owner. I would not recommend it this way. Likely, someone buying a house sold “for sale by owner” will take the realtor’s fee off their offer. They know you aren’t paying for one, so why should they? We did that once, with the sale of our first home. We were fortunate that an honest realtor bought it. He handled the paperwork. I worked for a lender then and probably could have gotten the forms, but having him handle it was so much easier.
The Contract is Signed
I will assume here that you are the buyer. Your realtor will complete the contract for you, going over all the details and explaining things as needed. You sign the contract, and your realtor delivers it to the seller’s realtor. That realtor will go over it with the seller. They have the option to change items. Let’s say you want to close in 30 days, but the seller’s new house won’t be ready for 45 days. They may return with an extension of the closing date to 45 days. Or they may offer to close in 30 days but want to rent it back for 15 days. If the seller agrees to that, both parties will need and agree on a rental rate.
If the seller agrees with everything on the contract, they will sign it. Their realtor will advise your realtor, and you will start ordering inspections you want on the house. These inspections could include roof inspection, pool inspection, house inspection, pest inspection, and more. You, as the buyer, will pay these costs through escrow.
You, as the buyer, will need to get your deposit (which can be about one percent of the purchase price) into escrow. This may require you to wire transfer the money to the bank used by the Title Company.
Inspections
Since you are paying for the inspections, you have a right to be there for the inspection. Typically, your realtor will arrange the appointment and be there with you. Your realtor will answer any questions and explain what should be important for you to be aware of and what should be fixed. Be aware that I have never had a pest inspection on a home that didn’t find a piece of wood under the home and request that it be treated for termites, just in case. We pass on that and take the wood out ourselves or leave it for the next buyer. Even the roof inspection may come up with some things that require repair that aren’t necessary but advised. All inspectors are covering themselves from future lawsuits by pointing out all problems.
Evaluating the Need for a Home Warranty
If you asked for a one-year home warranty, the seller may or may not agree to pay for it. In past years it was customary for the seller to offer to pay for one. It was an extra incentive to get you to buy the house. With our last purchase, it wasn’t as typical for the seller to offer them. We chose not to pay for one since it seems like the warranties aren’t worth it most of the time. For each time you call the warranty company to come to fix something, you pay a deductible. The last one we paid was $75.00.
I know someone who bought a home warranty. The air conditioning went out before they moved in. The warranty company said it was broken before the contract was completed. But, after the contract was complete, painters had been in the house with working air conditioning for a few days. On the final day, the AC went out. The buyers fought and won. But fighting to get something paid for is not fun. Especially when it is 100 degrees outside and you are waiting for a decision without using an A/C.
Sometimes a home warranty can be worth the extra money. Unfortunately, you never know until something goes wrong. It’s like insurance that you pay for your house. It can be a source of assurance, especially to a first-time buyer, for someone buying a house “as is” or knowing that all the appliances are old and might need replacing soon. Of course, nothing is guaranteed to break down during the warranty period. Just in case, you can continue paying for the home warranty for another year, or two, or more.
Countering back
If you want some of the repairs made, you can ask the seller to fix a list of repairs. Your list of repairs will be part of a counteroffer. We recently listed four items we wanted to be repaired before closing escrow. They came back, refusing to do anything. We weren’t happy but presented an offer back. We were buying some furniture from them, so we asked to have it free, and we would apply the cost saved to do the repairs ourselves. They agreed.
Our buyers wanted $8,000 instead of us making the repairs. I am convinced that they were adding thousands to cover in case the heater broke down or something like that. We refused. They were first-time buyers. Though old, our home had been remodeled, except for the heater/air conditioner, over the last five years. After our realtors talked about it, we countered at $2,000, and they accepted. We had removed the crazy piece of wood from under the house and fixed a leak from a toilet to the area under the house. Since we didn’t even know it was a problem until the inspection, we felt fixing it was only fair.
There is always the possibility of having so much damage to the home that you were unaware of that you could cancel your contract if the seller is unwilling to repair it to your satisfaction. That can be why a buyer should be aware when a house is sold “as is.”
Signing papers and close of escrow
Our buyer’s loan was ready to fund. Once we had the counteroffers resolved, it was time to sign papers. We went to the Title Company and signed all the papers. A notary witnessed the papers and took our information, name, driver’s license number, and expiration date. And our thumbprints. The other parties of the transactions also had appointments to do their signing.
There is a waiting period before everything closes. Closing involved some of the paperwork to be recorded by the county. A recorded deed was later sent to us showing we owned the home. Plus, documents went to the county assessor’s office so that they could figure out the new property tax amounts for both properties.
And any money deposited above the money needed to close is refunded to the party that overpaid. It’s common to get a small check back.
Moving in
Moving in is what comes next. I will talk about that within a few weeks. Sometimes there are difficulties with that, too. But once you are in and have made the repairs and changes you wanted, it’s nice to be settled in your new home.
