Contract to Close: The Home Selling Process

Even the most seasoned sellers can benefit from a refresher of the process. That’s why we’ve broken it down into this simple explanation that covers the basics.  Think of it as your map to the closing table. In the interest of providing as much information as possible, these steps are laid out assuming the buyer is financing the transaction as opposed to paying for it outright – should you have a cash buyer, your agent will keep you informed of any differences in the process. Understanding the steps will help make the sale of your home an easy and straightforward experience.

Choose an Agent You Connect With

It is important to choose an experienced agent that you feel understands your property, the market, and your communication style. Roots is committed to making sure our client receives the highest quality of service personally tailored to their needs. Once you choose an agent, you will need to sign a listing agreement that will outline the technical specifics of your agreement – this document is required to list a property on the MLS (multiple listing service).

Preparing and Photographing

This stage can vary widely depending on the condition of the home and whether or not it is occupied. Your agent will be armed with the information and materials to help you prioritize any necessary repairs and stage the home so it shines in photos. Professional photos and a personalized property website are included with every Roots listing.

Listing on MLS & Showings

Once the photographs are ready, the property can be listed on the Austin MLS – this is the comprehensive online database of properties for sale in the area. If your property is occupied, your agent will work with you to determine the most effective and comfortable way to arrange showings. While it is on the market, the property should be kept tidy and as “show-ready” as reasonable.

The Offer

When an offer is received, your agent will notify you and help you interpret and navigate the contract. Depending on the terms, you may want to counter some parts of the offer – negotiations can go back as forth and many times as necessary for both parties to come to an agreement. If an agreement cannot be reached, the offer is void with no financial obligations for either party.

Acceptance

Once both parties have agreed to the terms of the offer, by initialing and signing it, the contract is now considered “executed”. The buyer’s agent then delivers the earnest money and contract to the title company where it is held in an escrow account until closing. The option money fee is delivered directly to you and is yours to deposit.

Title Company

The title company will email the contract – with both checks receipted – to all parties. They will serve as escrow agent for the earnest money, ensure that the title to a property can be freely transferred, and act as a liaison between buyer and seller – they will contact you directly to request confirmation of marital status, payoff information, etc.

The Option Period

The option period is a time for the buyers to do their due diligence, have the property inspected and negotiate any potential repairs. During this time, buyers reserve the unrestricted right to cancel the contract. Typically option periods are between 7 and 10 days. In most cases the option fee is credited to the buyer at closing. If the buyer chooses to terminate the contract within the option period, however, the option fee is forfeited to the seller and the earnest money will be refunded to the buyer.

Appraisal

After the option period, the lender required appraisal will be ordered on the buyers behalf, unless it is a cash purchase. Sellers typically do not receive a copy of the appraisal unless the value comes back below the contract price.

Closing Disclosure

Once the loan has gone through underwriting and the lender has issued a “clear to close”, you will be sent a Closing Disclosure which outlines the financial particulars of the transaction and has the final total of funds due to you at closing.

Final Walk-through: Generally within 24 hours of closing, the buyers will schedule a final walk-through of the property to ensure that any negotiated repairs have been made and the home is in satisfactory condition.

Closing

The buyer and seller generally close on the same day, but not at the same time. Your appointment often takes less than 30 minutes and occurs at the title company. After documents are signed by both parties, the title company sends the file to the lender for final approval. Once this occurs, the loan is considered “funded”, proceeds are disbursed to the seller, and keys are released to the buyer. This usually occurs on the closing date.

Celebrate!

Breathe easy and smile!