Home Seller s Guide www.heritagetitleofaustin.com
Home Seller s Guide Welcome to the Home-Selling Process! Our Residential Experience... At Heritage Title Company, our dedicated staff of residential experts knows exactly what it takes to successfully close even the most complicated real estate transaction. Professionalism and unparalleled attention to detail demonstrate our commitment to bringing Austin the best in title services. The loyalty and longevity of our closers means that experience is on our side. In fact, the combined tenure of our escrow officers totals more than 134 years in residential experience combined. We look forward to assisting you in your closing. Index Choosing the Right Realtor Avoid Costly Mistakes Setting the Price Preparing Your Home Prior to Each Showing... Home Preparation Checklist The Offer Contract to Close Preparing for Closing Avoiding Closing Delays Estimated Closing Costs Net Proceeds Page 2 Page 3 Page 3 Page 4 Page 4 Pages 5-6 Page 7 Pages 7-8 Page 8 Page 9 Page 10 Page 10 Page 1
Choosing the Right Realtor Do Your Homework Once you ve decided to sell your home, finding a is the next step. Selling a property is not something you do every day, so choosing a good Realtor agent to guide the process is important. When considering a, be sure to: research that particular Realtor expertise. Are they prominent in your neighborhood? Do they sell homes in your Realtor s price range? How long have they been in the business? What is their average days on market compared to others in the area? research the Broker. Does the work for a new or established company? Ask for previous client testimonials. Realtor visit the company s website. Was it professional and easy to find? Was it easy to find and navigate through the company s listings? Did their marketing include clear, detailed descriptions for each property? ask your friends or family for recommendations. Have they worked with an agent who did a great job? Is there anyone they were not satisfied with? Why? Arrange an Interview Without any obligation, you can invite a local to visit your home to present you with a Listing Presentation explaining why he/she is Realtor the best selling agent to market your property. Three presentations will probably give you a good opportunity for choice. Interviewing selling agents is similar to a job interview. The job description you re seeking to fulfill should include the following: A person you like who presents well, who genuinely likes your property, who you believe will act in your best interest, who will be honest with you at all times, and will work hard to get you the highest price possible. Choosing the right realtor for the job could easily affect the final sale price, so do your research and choose wisely! Prepare a Detailed List of Questions What is your prior real estate experience? What knowledge do you have about the local market/the neighborhood market? What is the recent sales activity in my area? What is included in your marketing plan? How will you help me prepare my home to go on the market? How do you plan on communicating effectively with me/us? How do you justify the commission you receive when selling my/our home? What effective negotiating strategies will you use to help us gain or save money? What type of support does your Broker provide? Information About Brokerage Services The Texas Real Estate Commission (TREC) requires that all Texas real estate agents present a form to each prospective client upon their first substanstial conversation. This form, Information About Brokerage Services is not a commitment; rather, a disclosure of information summarizing the different types of representation an agent can perform and the coverage and service you can expect from that representation. A copy of the original form can be found on the TREC website at http://www.trec.state.tx.us/formslawscontracts/forms/forms-contracts.asp. Page 2
Home Seller s Guide Avoid Costly Mistakes Unrealistic Pricing Many sellers are tempted to list their home based on the original purchase price, money spent on improvements or because the neighbor sold their house for that much! Features that attract one person may not appeal to everyone, therefore, sellers can t always rely on recouping money spent on fancy upgrades. Although your neighbor s home sold for a desirable price, one must consider the condition, location and amenities each home has to offer. The sale price is ultimately determined by current market conditions. In an everchanging market, if your home is not competitively priced, you could miss an opportunity to sell. Lack of Preparation First impressions count. You can t expect top dollar for a house that is not in top-notch shape. Keep in mind that most marketing materials will generally highlight the front of the house. This means the outside appearance is just as important as inside. Often times buyers will disregard a home that lacks curb appeal, especially when there are so many homes to consider. Be sure to discuss with your ways you can better prepare your home for sale prior to marketing it. Poor Marketing Realtor The National Association of indicated that about 84% of home buyers start their home search online. Buyers have Realtors become more tech-savvy with today s technology, requiring a broader marketing approach than ever before. While open houses and classified ads are methods still being used by today, a more highly effective marketing strategy must be in place to ensure your house Realtors is receiving maximum exposure in the market place. Setting the Price Consider Market Conditions To set the right price on your home, it is important to evaluate current market conditions. Is your area experiencing a buyer s or seller s market? Are home prices in your neighborhood trending up down? Are interest rates attractive? Are homes selling quickly or lingering on the market? Your will be able to explain how market conditions could effect your home s sale price. Realtor Use Comparable Sales Buyers will compare the price of your home to other homes on the market. Pricing incorrectly could cause a potential buyer to overlook your house altogether. One way help determine your home s market value is by looking at comparable sales, or, comps. Your will generate a Comparative Market Analysis (CMA) including recent comps and homes Realtor presently on the market in your area, as well as those that have failed to sell in the past few months. When done correctly, CMAs are an excellent tool for helping sellers acquire list price. Know Your Competition Have you noticed other For Sale signs being displayed in neighboring yards? How do those homes compare to yours in terms of condition, location, size and amenities? Attend open houses, pick up flyers, go online to research current pricing, price reductions and amount of days on the market. Put yourself in the buyer s shoes. Is your home suitably priced in relation to the others? Page 3
Preparing Your Home Curb Appeal If the appearance of your home is less than satisfactory, a buyer might ask their agent to keep driving! Curb appeal plays a major part in luring homebuyers. Check for fading exterior paint, dirty windows and crowded walkways. This is not the time to ignore yard maintenance. Prune overgrown shrubs and trees, mow the lawn and water the plants when needed. By taking these precautionary measures, buyers will be less likely to remove your home from their list. Floor-to-Ceiling Stained carpets? Dirty walls? If carpet is looking tired and old, consider having it professionally cleaned. Pay close attention to high-traffic areas. If replacing the carpet is necessary, avoid dark or bright color selections. Do the walls, ceilings, doors or baseboards need a little touch-up paint? Patch-up any noticeable nicks or nail holes where pictures once hung. This is an excellent time to repaint any bright, vibrant walls. Neutral colors will prove to be cost effective in the long run. Make Minor Repairs Small renovations can make a big impact by showing buyers that your home has been well cared for. Leaky faucets, loose railings, broken hinges and damaged blinds are just a few items that buyers will notice when walking through the house. Does the home appear polished from the outside? Noticeable repairs like falling fences or rotted wordwork can discourage onlookers. Eliminate Clutter Buyers won t notice the Sparkling Granite Counters or the Gleaming Hardwood Floors if there are piles of paperwork and boxes scattered about. Potential buyers can very quickly overlook the qualities of the house when they are distracted by clutter and disorganization. Prior to Each Showing... Make sure the beds are made, the dishes are put away and clutter is stowed Open all drapes, blinds and shutters for enhanced natural lighting Turn on every lamp and overhead light in the house and open all interior doors Turn on soft background music and turn off the television Keep the home kept at the appropriate temperature for the season Arrange a small bouquet of fresh flowers to give the home a nice feel Put animals outside or take the dog for a walk When possible, leave the house during showings, while buyers are present Page 4
Home Preparation Checklist EXTERIOR Y N NEEDS WORK Does the house need painting? Are there any holes or cracks? Are the walls and porches clean and in good repair? Does the front porch give a welcome appearance? LANDSCAPING Y N NEEDS WORK Does your yard look well-groomed? Trees and bushes trimmed? Lawn mowed and edged? Is it free of weeds? Are the decks and patios clean? ROOF Y N NEEDS WORK Does it have any leaks? Are there any shingles or tiles missing? Does the roof sag? Is the chimney in good shape? INTERIOR WALLS Y N NEEDS WORK Any cracks or holes? Do they need painting? What about the wallpaper? Is the fireplace in good shape? DOORS Y N NEEDS WORK Are they in good condition? No sagging or sticking? Do the locks work? Paint in good condition? Do the doors seal tightly? Do the storm doors need to be replaced? CARPETS Y N NEEDS WORK Are they clean? Worn? Do they need restretching? Are there spots or faded areas?
CEILINGS Y N NEEDS WORK Are there any water stains? Cracks or peeling? Do they need painting? WINDOWS Y N NEEDS WORK Are the drapes, shutters or shades in working order? Are they clean and attractive? Do they all have screens that are in good repair? Do the windows open and close with ease? Are the window sills clean? Is there any rot or rust? FIREPLACE Y N NEEDS WORK Is it clean? Is the screen in good shape? Does it make an attractive display? BATHROOMS Y N NEEDS WORK Do the faucets drip? Do the sinks drain freely? Are the toilets in good shape? Are the shower doors clean? Do the tubs need caulking? Is the floor in good condition? Are the vanities and mirrors in good condition? KITCHEN Y N NEEDS WORK Are the appliances clean and in working order? Are the cabinets in good condition and tidy? Is the tile grout clean? Is the sink stained, chipped or in need of caulk? GARAGE Y N NEEDS WORK Is it organized and free of clutter? Is there sufficient lighting? Is the floor swept? Are there oil spots or other stains on the concrete?
Home Seller s Guide The Offer Price and Terms If a low offer is made, remain cool until you have examined the terms. Nothing evokes a more emotional response than a low bid. Be realistic and objective because many properties don t bring full asking price. Don t use price alone as a reason not to counter or negotiate an offer. A first offer may reveal what s most important - price or terms - to this particular buyer, giving you the key to begin bargaining. Condition of Home and Inspection Be sure to include all mandatory and voluntary disclosure statements concerning the property s condition, such as known defects in the contract. The potential buyer should have your home inspected for soundness of construction and state of repair. All repairs made prior to the inspection will save time and aggrevation. Be careful what you guarantee. You cannot be sure the roof won t leak, the air conditioning system won t go out or any number of other such assurances. Once the property is sold, you are no longer responsible for any repairs that need to be done. Response Deadlines You may be asked to respond to an offer within a specific amount of time. Try to get as long of a response time as possible. Other offers may come up and you ll want to buy time to consider them all and perhaps use one offer to increase another. Settlement Date and Occupancy If you are selling your home because another is under contract, seek a settlement date that will enable you to take your sales profits to the next closing. Be realistic, the buyer of your home will probably need at least 30 to 50 days to arrange financing and closing. Finalizing Everything in the contract is negotiable. When everyone has agreed to the terms, initialed the changes and signed the contract, you have an agreement binding to all parties. All that remains is removing contingency clauses, arranging financing and clearing title. Contract to Close What Happens Next? After the contract is accepted, and all parties have signed and initialed every page of the contract including any/all changes, the contract must be executed and receipted. executed contract - the date in which the contract becomes binding receipted contract - when the title company acknowledes in writing, the receipt of the contract and any earnest money. The earnest money is then deposited into an escrow account. The Option Period The Option Period gives buyers the unrestricted right to walk away from a purchase contract. It is during this time that buyers will arrange for inspections to be completed. If repairs are requested, a Repair Amendment must be negotiated and signed by all parties before the option expires. Page 7
Appraisal & Survey After the option expires and all parties have agreed to move forward with the transaction, an Appraisal and a Survey will be ordered. appraisal - detailed report conducted by a licensed individual to help establish the market value of a property. If financing is obtained by the buyer, a lender will require the home to appraise at or above sale price in order to secure the loan. survey - defines the property lines, boundaries, easements and encroachments that may run through or over the property. If no major improvements have been made since you ve owned the home, you may be entitled to use an existing survey accompanied by a T-47 Affidavit. This form must be signed, notarized and approved by the lender and the title company. Be aware of your deadline to deliver this as stated in the contract. Title Commitment The Title Commitment spells out what, if anything, needs to be cleared prior to closing. Examples of problems that might come up are mechanics liens on your home, past due homeowner s fees, divorce or marital status issues, etc. These items are usually listed under Schedule C of the Title Commitment and must be resolved in order to close the transaction. The Closing Disclosure Your lender will collaboate with Heritage Title to complete the Closing Disclosure which must be received by consumers no less than 3 days before closing. Preparing for Closing As the seller, you have relatively little to do at this point. By keeping abreast of progress on both sides, you can avoid common glitches. (see Avoiding Closing Delays). Items You Will Need documentation showing that any contingencies have been removed or satisfied all documents needed to complete the transfer of title (this may include certificate of title, deed, correcting affidavits, quit claim deeds, survey and title insurance policy or binder) homeowner s insurance policy; the buyer will need to make arrangements ahead of time to take over your unused portion of hazard insurance prorations for ongoing expenses such as insurance premiums, property taxes, accrued interest on assumed loans and utilities (if not shut off between owners) receipts showing payment of latest water, electric and gas bills a certificate from your lender indicating the mortgage balance and the date to which interest has been prepaid Other Items to Bring to Closing Picture Identification (driver s license, military ID, etc) Extra house keys, garage door openers, security access or gate card keys or codes Any operating guides for any appliance that will remain in the house If you have extra wallpaper or paint that was used on the house, leave those materials for the new owners - they may need to touch-up wallpaper or paint after they move in Page 8
Home Seller s Guide Avoiding Closing Delays Now that you re in the homestretch, prior planning will help to prevent unwanted inconveniences for all parties involved. Proactive preparation with the following items will help to insure a smooth closing. Loan Payoffs Provide Heritage Title with your current loan information so that they may order your payoff in time for closing. Banks can sometimes take up to 10 business days to prepare this information. Early ordering is imperative. Heritage Title will need the lender s name, address, telephone number, your loan number, your social security number and when you made your last payment. Delinquent Taxes Insuring that taxes have been paid is part of your closing. Delinquent property taxes need to be collected at closing. If you do pay them prior to closing, you must furnish an original tax receipt. If you re unable to furnish a receipt, the delinquent tax amount will be withheld from your sales proceeds until payment of these taxes can be confirmed. Escrow Refunds Any escrow reserves held by your lender will not be netted from your payoff at closing. Your lender will refund these monies after your payoff has cleared and an analysis of your escrow account has been completed. Common Names Most title companies conduct a lien search on both the property and the owner. If you have a common surname, another person s liens may show up. To help eliminate false results, complete a confidential information statement and return it to Heritage Title prior to closing. Power of Attorney A Power of Attorney is used when either party will not be present to sign at closing. Heritage Title must approve the Power of Attorney prior to closing The original Power of Attorney must be delivered to Heritage Title prior to closing, as the original must be recorded with the county clerk ahead of all other closing documents Heritage Title must be able to contact you via telephone on the day of closing to be certain that you have not revoked the Power of Attorney and that you are alive and well. Closing by Mail If any documents must be mailed out for signatures: all documents must be signed exactly as requested all documents must have proper notarization with an acceptable notary any documents mailed out of the country must be notarized in English Marital Status Texas is a community property state. If you purchased your property when you were single and you have married, Heritage Title will require that your spouse join in on the signing of the deed at closing. If you are divorced and your divorce proceedings were handled in a county other than Travis, please have a certified copy of the divorce decree delivered to Heritage Title prior to closing. Page 9
Net Proceeds How much will I get from the sale of my home? Every seller wants to know how much money they will make after the sale of their home. Your real estate agent can more accurately help you calculate this figure. You will need to provide your agent with the following information: your anticipated sale price the interest rate on your current loan and the approximate unpaid principal balance your estimated closing costs and credits To calculate profit, take the sale price minus your current mortgage balance and related closing costs. Prorations The closing month is also important because a number of the fees you will pay at closing are based on prorated figures. Prorations (or distributions) are calculated when the buyer and seller proportionately divide costs to the time of use or the date of closing, most commonly being property taxes. To learn more about property tax prorations, please visit our website at www.heritagetitleofaustin.com. Estimated Closing Costs Your closing costs are the total of the charges generally paid by the seller to close the transaction and some are negotiable between the buyer and seller. The following chart is a schedule of seller s estimated charges: Seller s Estimated Charges CONV VA FHA ASSUMP ATTORNEY S FEES 70-125 70-125 75-150 75 COMMISSION Per Listing Contract DISCOUNT POINTS Per Contract TITLE SERVICE FEE 300 300 300 300 HOA PRORATION 1st of month to closing date OWNER S TITLE POLICY see rate card - set by the Texas Department of Insurance RECORDING FEES 25 31 35 16 REPAIRS Per Contract TAX CERTIFICATES 53.65 53.65 53.65 53.65 NOTE: A veteran may not pay attorney fees, escrow fees, pest inspection fees, processing or underwriting fees, courier fees or tax service fees if the veteran is paying a 1% origination fee. Page 10
Heritage Title Company of Austin, Inc. Downtown Office Frost Bank Tower 401 Congress Ave. Ste 1500 Austin, Texas 78701 512.505.5000 Rollingwood Office Rollingwood Center 2500 Bee Caves Rd. Bldg 1 Ste 100 Austin, Texas 78746 512.329.3900 Tarrytown Office The Carillon 2630 Exposition Blvd. Ste 105 Austin, Texas 78703 512.380.8900