Listing Process 101
In this post, I’m going to walk you through the entire sale process of taking a listing from start to end. From entering it into the MLS to the closing table.
I’m gonna cover it all as if you had a front seat into exactly how I handle my listing clients and transactions.
Table of Contents
The forms below are required to get your property listed on the Houston MLS.
- Residential Listing Agreement
- Information about Brokerage Services
- Seller’s Disclosure Notice
- Lead Based Paint Disclosure (only for homes built before 1978)
- Addendum for Property Subject to Mandatory Membership in an Owner’s Association (If the home is part of a mandatory HOA membership)
- After receipt of an offer, you will review the offer and confirm that it is filled out in it’s entirety and has any pertinent documents such as a Pre-Qualification letter for the buyer attached with it.
- Call your seller and ask him if we would like to go over the offer over the phone or in person and email them a copy.
- After negotiating and coming to an agreement with the buyers representative, you will execute the contract (all parties will sign).
- Once executed, the buyer will have 2 business days to deliver the earnest money and option check to the agreed upon title company stated in the contract.
The Title Company
The title company’s job is to act as escrow agent and receive all the documentation from all parties, provide title searches and title insurance, disburse funds according to instructions, get the deed recorded, and various other details to facilitate the closing of the transaction.
The title company immediately orders the title work, which shows what all the liens are against the property.
Some other items the seller needs to give the title company are the loan payoff information (a mortgage payment invoice will do), an existing survey if there is one, and the Homeowner Association information if there is one.
There’s a pile of HOA papers that buyers get when they buy a house, which they never read and promptly file away and forget about.
As the seller, it helps if you find these papers and give them to the title company. It also helps if you provide the title company with the HOA management phone number.
Buyer’s Home Inspection
The buyer should order inspections immediately so do not be surprised if their agent calls you wanting to confirm access for the following day.
Usually buyers will only have a general inspection conducted however there are various additional types including pool, plumbing and foundation inspections just to name a few.
The inspector’s job is to literally spend 2-3 hours checking the main points of the house and looking for things that are wrong and to give their opinion.
Once the buyer receives the inspection report, it’s often back to the negotiating table so the seller and buyer can come to an agreement on a win-win scenario. This might be the seller taking $X off of the sale price or actually have agreed upon repairs done prior to closing.
The title company will require a survey before insuring title. A survey from when the seller first bought the home is usually acceptable.
Adding on to the home, adding a pool, or adding a fence are examples of situations when the title company would require a new survey.
When the seller’s existing survey is used, the seller must sign and have notarized a T-47, also known as a Residential Real Property Affidavit.
This form can be signed at closing, but it would be wise to discuss it with the title company at least a week in advance, just in case the T-47 will not suffice and a new survey needs to be ordered.
The buyer normally pays for a new survey if required, which costs an average of $350.
The title company will order the survey.
Timeline: At least a 2 weeks before closing. Although a survey can be done a few days after being ordered, it’s best to get it ordered as soon as you know it’s needed to avoid possible delays.
Usually the day before the closing the buyer may want to do a “walk-through” to make sure everything is where it’s supposed to be, and that there are no problems with the property.
The Settlement Statement
The title company is required to supply you with a Settlement Statement (also known as the “HUD 1” or simply “the HUD”) at least 24 hours before the closing.
It has all the numbers of who pays and gets what. Be sure to review the statement as soon as you get it, and call the title company if something doesn’t look right or if there is anything you don’t understand.
On the closing day, the buyer and seller and their representatives go to the title company. The Buyer brings a cashier’s check (if there is money due) made out to the title company, and the seller brings the keys.
Each signs a pile of papers, the buyers are given the keys, and the seller gets a check.
The seller gets his money when the buyer’s loan funds, which is later in the day or the next business day.
We suggest the seller give the title company wiring instructions to wire the proceeds, otherwise the seller will need to go back to the title company to pick up a check or have it mailed.