What To Expect During The Under Contract And Closing Process As A Seller
HOLY MOLY!
After carefully considering all of the offers that you received on your home and maybe even doing some back and forth negotiating, you accepted a contract on your home and you are ecstatic.
You’ve done all of the hard work to get your home prepared for market, listed, and in front of the right people, and it’s almosssttt time to celebrate all of your hard work. 🎉🍾
But like anything in life, before you can cue the confetti and pop the champagne, there are a few things that need to happen first. The two big things that MUST happen before you take your happy little self skipping to the bank are the inspection and the appraisal.
Both of these can be somewhat confusing and hard for people to understand, so in this blog post you’ll learn the purpose of an inspection and appraisal, how they work, and ultimately how to get yourself to that closing table in a timely manner!
How Home Inspections Work and What To Expect As The Seller
When you accept a buyer’s offer, they will then have the opportunity to conduct an inspection prior to closing.
While these aren’t required, most buyer’s agents will recommend that a buyer has an inspection so that they are fully equipped with an in-depth understanding of the property's overall condition.
During the inspection process, the inspector will work to identify any existing or potential issues that might affect the home's value, safety, or livability. This includes examining the structural components of the house, including the foundation, walls, roof, and other critical systems like electrical, plumbing, HVAC, and more.
They look for any issues that could pose safety hazards or might require immediate attention. Additionally, the inspection provides an overview of the general condition of the property, which helps the buyer make informed decisions about the purchase, understanding the repairs or maintenance required after closing.
With all of this in mind, it’s important for you as the seller to understand that based on the findings of the home inspection, your potential buyer could come back with additional negotiations.
Most of the time, this includes them negotiating repairs or asking for a reduction in the sale price to cover the costs of addressing those issues.
While this can often feel frustrating as the seller, just know that it's a very common thing and expecting it will give you more opportunity to prepare for it!
This is why I always suggest that as the seller, you do as much due diligence as you can up front BEFORE you list your home, so that you can avoid potential negotiations like this during the under contract phase.
(Refer here for those first steps to take when selling your home so you can be as prepared as possible!)
How Home Appraisals Work and What To Expect As The Seller
Once the inspection is completed and negotiated, the bank will order the appraisal. Similar to a home inspection, a home appraisal serves multiple purposes, primarily to determine the fair market value of a property.
It's an important step in the home buying process and is often required by lenders before approving a mortgage. During this step, an appraiser will evaluate the property's characteristics, condition, and comparable sales in the area to determine its current market value.
They’ll look at:
General Condition
Location
Age
Exterior - Siding, Roof, Windows
Size - Square footage
Design - remodeled, new, dated
Interior - Bedrooms, bathrooms, basement space etc.
Improvements
Safety Features
This value determination helps both, the buyer and the lender, understand what the property is worth. Once the market value is clearly understood, the buyer’s lender will use the appraisal to ensure that the property's value justifies the loan amount.
This information is important for you to know as a seller because just like a home inspection can be used as a negotiation tool, an appraisal can too!
This is why one of the FIRST steps that we take when you’re ready to sell your home is conduct a market analysis to ensure that we’re listing your home correctly from the start, so that we can yet again hopefully avoid any under contract negotiations.
How To Prepare For Home Inspections and Appraisals As The Seller
My best advice here? DON’T. GET. COMFORTABLE. 🙅🏼♀️
In my experience, home sellers often make the mistake of not putting in the effort after the contracts are signed. And trust me I get it – accepting an offer often feels like the final step where you can sit back and relax.
But the way that you act during the under contract phase is JUST as important!
The biggest mistake you can make is to not make your home show ready any time that buyer or their inspectors are walking in. You want to keep them excited and looking forward to living life in your home.
Three Key Things You Can Do To Prep Your Home for Inspection:
1. Understand what inspectors are looking for
The inspection is a visual process for health, safety, and mechanical defects in the property. For this to go smoothly, make sure the inspector has access to all the areas of the home, especially crawl spaces or attics, and that the areas are clear.
2. Keep it clean
Your buyer will be in the home reviewing the inspection with the inspector, so it’s best that they see the home in its shining form so they’re reminded of how excited they are to move in!
To make sure that happens, remove dishes from the sink, declutter, make the home smell good, and try your best to make it “show ready.”
They don’t need to see your dirty laundry, okay?!
3. Conduct a “mini inspection” yourself prior to the real thing
Want to make sure that the inspection passes with flying colors? Conduct your own beforehand by going through and checking the following items:
Lighting – make sure all fixtures are operating properly and fresh bulbs are in
Home Mechanics – when was the last time you serviced your furnace? Or your A/C? Providing this information will be helpful! If it’s been a minute, it’s best to go ahead and have that done.
Exterior – clogged gutters? Any loose or missing sidings? Do your windows open properly?
Plumbing – any active leaks? Inspectors run a lot of water! Addressing leaks ahead of time will be an easy fix.
Appliances – are they in good working order? Is your ice maker working? Consider allll the things (even if they seem simple) to save you later.
If there are any current defects with the home that you aren’t able to fix, a great place to note them is in the owner's property disclosure with an explanation. Leaving a copy for the inspector to see is extremely helpful and lets them take the guesswork out of why things are happening.
The appraiser’s time in the home will be much shorter, compared to the inspector and in fact, sometimes they don’t even need you to leave your home. Again, the best thing to do here is to make sure your home is clean and tidy, ensuring that it’s “show ready.”
This tells the appraiser that the home is taken care of and well maintained to the subconscious which could positively impact your report.
One thing to note: at this point in the process, there’s a good chance you’ve started packing for moving and if so, that’s okay! Simply try to consolidate your boxes in one area, such as the garage, and do the best you can to keep things neat and organized. 📦
Overall, the most impactful thing you can do for BOTH, the inspection and appraisal, is to keep your home neat, clean, and tidy. The more you can showcase how well your home is taken care of, the more the inspector and appraiser will notice!
What To Do Before Closing
Once the inspection and appraisal process have been completed, you’re SOOOO close to closing. And I’ll be honest – those last few days prior to closing can feel hectic as the seller, but my motto is always this: if we have a plan, the smoother the process can go.
Ideally you will already have your movers set up, so that you know exactly when your property will be vacant.
PRO TIP: Movers can be booked out a month to a few weeks so plan accordingly!
When you sign your final documents at closing, the home should be empty and ready for its new owners, unless you’ve negotiated a post closing occupancy or a rent back agreement. In most situations, however, the home will be clean, empty and ready for its new buyers to start moving in as soon as they leave the closing table.
A few things to finalize prior to your move out include:
Utilities – make sure to call your utility companies & let them know the buyers will be transferring utilities into their name. It’s up to them to do the transferring, but it’s up to YOU to stop services if they don’t. A good rule of thumb is to plan on stopping service a day or so after closing. That gives the buyer time to transfer and you’re making sure you’re not paying for utilities you’re not using.
Subscriptions and Mail – make sure to notify all notify subscription services, creditors and acquaintances of your new address and set up mail forwarding
Last Minute Clean Up – ideally you’d leave the property in the condition that you’d like to move into. If the buyers have requested repairs, make sure those are finished and that the invoices are sent over for completed work. The contract will usually state that the property is to be “broom clean.” This doesn’t mean hiring professional cleaners, but it does mean neat and tidy.
Insurance – let your insurance company know you will no longer be the owner of this home. We recommend giving a week or so extra coverage after closing just to make sure everything transfers and funds properly.
Final Walk Through – the buyers will typically do a final walk through 24 hours prior to closing. This is to make sure repairs are completed and the house is in the same condition as when they had seen it prior. The home should be primarily empty for this walk through!
What To Expect At Closing As A Seller
Overall, the 7-10 days before closing is really the buyers time to shine. They will be working with their underwriting team during this time to get the final approval.
Once they receive final approval from the bank, we’ll then schedule the closing. The contract date for closing is always a moving target, but we try our best to hit that target best we can!
In Montana, we close at title companies, but some states use attorneys or closing offices. Regardless of where you close, the closing appointment is where both parties will sign ALL the documents that will transfer ownership of the home to the buyer and the buyer submits all of their required funds to purchase the home.
Once all paperwork has been signed and funds have been disbursed, the buyer is officially the new owner of the property and you have officially sold your home! 🙌🏼
As the seller, you will need to bring the following to closing:
Government Issued Photo ID
Extra keys and garage door openers to the property.
Any outstanding documents you may be instructed to bring by your real estate team (could be completed repair receipts etc.)
The closing process typically takes an hour and once it’s finished, the property should transfer ownership within 24 hours and your money should be in the bank! 💸
Ready To Start The Home Selling Process?
Overall, selling your home is a HUGE deal and requires a lot of steps to get to the closing table, but when you partner with a trusted, local realtor, you can do it right and in a timely manner.
Your real estate agent is the person that works with you from start to finish to make this process feel way less overwhelming and get you to the ultimate outcome that you truly want!
So, whaddya say? Are you ready to begin the home selling process?
If you’re local to Billings, CLICK HERE to get started and I’ll help you get started on the right foot.
And if you aren’t local to Billings, good news for you – I know people. 😏
Connect here and I’ll get you in touch with a trusted agent in your area to start the home selling process with ease!