In this simple article, I explain how a typical home sale transpires.
Suppose Joe and Jill just got married (Congrats!). Jill just received a new work assignment in Anytown, USA. Therefore, they need to find a place to live there.
J&J want to buy a home, so they go on Zillow and search for homes In Anytown. They input their parameters (3 beds, 2 baths, etc.) and find three homes that match.
The following weekend, they attend an open house at 123 Mill Street, a colonial home with an asking price of $100,000. At the open house, they meet the listing agent, Sheila. Sheila works for the sellers.
J&J love the house. So, they ask Jill’s coworker, Phil, who just bought a home in Anytown, for a real estate agent recommendation. Phil recommends Bill.
J&J call Bill, who offers to help them. Bill charges a 2.5% gross sales price, buyer’s agent fee. This means that if they buy a home for $10, J&J will pay Bill 25 cents.
However, Bill assures J&J that amount is “built-into” the listing price of most listings. Since J&J plan to put in an offer on 123 Mill Street, there will be no additional fee to hire Bill. So, they hire him.
Bill writes up the offer for J&J. They offer $95,000. After J&J electronically sign the offer, Bill sends it to Sheila, and she gives it to the sellers.
The sellers counter with $98,000. J&J ask for Bill’s opinion. Bill runs a detailed Comparative Market Analysis (CMA), and determines the home is worth $96,000. Plus, the home has been on the market for months, so there is little interest from other parties.
Following Bill’s advice, J&J decide to up their offer to $96,000. They tell Bill to tell the listing agent, Sheila that this is their, “Best and final offer.”
After an agonizing wait, Bill calls J&J: The seller has agreed to the terms! Bill then gets the new offer signed.
Later that week, on Bill’s advice, Troy, a home inspector, performs a thorough examination of the home. The only issue Troy finds is a broken window in the attic. Through their agents, J&J ask the seller to fix this issue before the closing. The seller agrees to do so.
(State specific) A few days later, J&J hire an attorney, so that they can sign a more detailed contract in their purchase of 123 Mill Street. The seller’s hire their own attorney.
After going back and forth, the two attorneys agree on the terms of said contract. This agreement is very similar to the original one, but is more in-depth. Bill and Sheila help facilitate the signing of it.
A month later, J&J are ready to move in! A final walkthrough takes place, where J&J confirm nothing has changed with the home, and that the seller has fixed the broken window.
Later that day, both attorney’s meet with J&J and they sign some legal documents. They then send those documents to the appropriate legal authority, in this case the County Registry of Deeds. Once “on record,” the home belongs to J&J.
And that is how a home sale takes place!
If you want to learn how a how to buy or sell a home, check out VagharRealEstate.com’s education center.