Home Selling Process & Chart Many sellers as unsure of the process of selling a house. It can seem very daunting and challenging especially with new rules and regulations always coming into play. The home selling process typically occurs in 6 distinct phases here North Carolina. This post only relates to the greater Charlotte and Lake Norman area in North Carolina. Each state and indeed each area may have slightly different “typical” processes. The chart to the left may also help with the explanation of the home selling process.
Initial Phase: This is where you the seller must decide on a great real estate broker to get your home sold, like Lisa Alford with Alford Realty Group. You may find out more on how to choose the right agent here. You and your agent will discuss you goals and set a marketing plan that works best for your individual needs.
Preparations Phase: This phase actually has two components, your agent has one component and you (the seller) have the other. During this phase, your agent will be comparing other properties in the area that are currently for sale and have sold within the last 6 months, study the absorption rate for your area and recommend a good price for you to list your home for sale. If your home is unique your agent may recommend that you get an appraisal in order to ensure the price is being set properly. Similarly, your agent may also recommend that you get an inspection of your home before you sell. This is done for several reasons that aid in the sale of your home, more is explained here. This is not always done and it is completely up to the seller as to whether or not they wish to do this as it does have some cost associated with it, however it can save lots of time and money in the long run and help make your home more attractive to buyers.
For your part during this phase of the home selling process, you will be getting your home ready for the market. Your home must shine like a new penny and look like a model home in order to attract the highest paying buyer in a short period of time. This includes the possible inspections mentioned above, making any necessary repairs, staging, de-cluttering, de-personalizing as well as cosmetically enhancing the interior and exterior of the home. More on this subject is explained here.
Then we move into the Marketing Phase: During this phase your agent/broker is trying to attract potential buyers to your home. This generally includes things like putting the home in the MLS, print advertising, internet advertising, virtual tour, open houses, direct marketing and property showings. Depending on your agent/broker’s sales strategy, these things can look very different. One agent may only do one or two of these things while other agents may do all and even more than what is listed here. It is very important to understand what your agent’s sales strategy is before you list your home. At Alford Realty Group, we typically do a 20 step process that includes all of these things and a few more. Be clear what is expected of your agent/broker before you enter into a listing agreement with them.
Contract Phase: YAY! You have received an offer! This is a very exciting phase in the process of selling your home. Was it what you hoped for? Does the buyer want you to pay closing costs or other expenses? What other things is the buyer asking for? Discuss the offer with your agent/broker and decide if the offer is acceptable as is or if you need to negotiate it to a better place before you can accept. It is important to remember that in North Carolina, once you reject that initial offer (by countering or rejection) the offer is no longer on the table, the buyer is free to walk away. If you decide you need to make a counter offer, your agent/broker will help you decide the best way to handle the situation. Some negotiations only take one offer and it’s accepted, others can take 5-6 times of going back and forth before a final agreement is reached. Regardless of your situation, your agent/broker is there for you and should help you get an amicable deal worked out for the sale of your home. Once a deal has been struck and all parties have signed, you are under contract! Congratulations!
It should also be noted that during the contract phase two deposits are also negotiated, a due diligence deposit and an earnest money deposit. They both count toward the purchase price of the home. The due diligence money is paid directly to the seller and is non-refundable. The earnest money is made payable to which ever entity will be holding the escrow deposit and is refundable up until 5:00 on the due diligence deadline date.
Due Diligence Phase: This is where we in North Carolina (not just Lake Norman and Charlotte) are pretty unique in the home selling process. Due Diligence started a few years ago and it’s still a hard concept for many buyers and sellers to understand. The short explanation is that it is the time that the buyer is buying the home off the market to do their inspections, negotiate any repairs needed, appraisal, surveys, taking care of any contingencies and getting their loan in order and ready for the sale (closing). Your agent/broker can explain this in further detail to you but this is the quick explanation.
Closing Phase: This is the final phase in the process. The closing attorney pulls together the title search, reviews it to make sure the title is clear and can be exchanged. He/she reviews the survey (if any) to make sure there are no encroachments. He/she also pulls together all the numbers for each side including payoffs, taxes, HOA dues, commissions, recording fees, loan fees and his/her fees and puts it all together in a document called the HUD-1 or closing statement. This form is a standard, federal form that sets forth all the monies being exchanged in a clear format and shows the bottom line for each party. The closing attorney will go over all of the closing and loan documents with each party and explain it all to them. The seller signs their portion, the buyer signs their portion. The closing attorney then verifies that all monies are received, this includes loan money, cash from buyer, cash from seller (if any). It should be noted that most attorneys require bank certified funds or even wired funds. This is due to fraudulent activities and for the protection of all parties. The attorney must then record the documents and update the title. This usually takes a few hours. After all of that is completed, the attorney then disburses the funds and the seller gets paid! At that point, the sale is complete and final.