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When making the decision to buy or sell your home without the assistance of a real estate agent, it is important to educate yourself as to the real estate market. Our firm can provide you with general information, assist you with preparing the contract and provide you with contact information for services to complete the transaction.  What we cannot do is advise you as to price or stand in the shoes of your realtor. 

Why you may want to employ a realtor or should be prepared to work with a realtor

Our office will always suggest that you reconsider listing or purchasing your home with the assistance of a realtor. Realtors have a wealth of knowledge to assist you in preparing your home for the upcoming market, can target a realistic asking price and suggested deposit, have access to numerous advertising venues and can resolve many issues in your best interest that may arise while negotiating a contract or while the contract is pending prior to closing. Even with paying a realtor’s commission, you may net greater proceeds due to their expertise. 

As seller, you can always negotiate your realtor’s commission up front.  3% is the standard commission, but if the home is highly priced, some realtors may agree to reduce their commission upfront. If one agent or office is representing both parties, they may be willing to reduce their commission. In the alternative, you could hire an agent for the sole purpose of assisting you in valuing your home or listing your property on the multiple listing service (MLS). If a realtor agrees to do this, they will charge you a flat fee upfront.

The seller is also expected to pay the buyer’s realtor’s commission, which follows the same standard rates as listed above. If you are unwilling to pay any commissions, you need to disclose that information in your advertisement when listing the property. This will greatly reduce the amount of traffic of interested buyers viewing your home as realtors who see your listing will first inquire about commissions prior to spending their time with potential buyers.  The buyer’s realtor will provide you with a contract to purchase, but if neither party has a realtor, we can provide you with a blank contract or suggest where you may obtain one.

How we can assist you

We can review the offers you receive and explain the gross sales price less any deductions to compare the actual net proceeds.  If this is the only function you would like our office to perform, we charge approximately $500.00 for residential contract review, depending on the number of offers and the complexity of terms in the contract. We will advise you upfront of our charges prior to your employing our firm. 

Usually, the buyer chooses the settlement company to complete the transaction.  As seller, you may request that our firm represent the transaction at closing as the settlement company.  Many buyers’ realtors will agree to this request and you can feel confident that we will complete the transaction efficiently.  If you are the buyer, insert our name as the settlement company in the contract.

Regarding deposits, the amount should be disclosed including who will hold the deposit until settlement: the settlement company or the realtor.  We do not charge a fee for holding a deposit and suggest that the deposit be paid over to our company to be held in escrow.  Interest will not accrue unless specifically requested. A buyers’ realtor may insist on holding the deposit and accruing interest for their client. Your comfort level with the buyer’s realtor should be the determining factor as to where the deposit will be held.

Disclosures of the Property

An important issue in selling property is how much information does the seller have to disclose regarding the condition of the property? The general rule of thumb in the Washington DC area is let the buyer beware. This means that it is the buyer’s obligations to investigate defects, get the home inspected and make the determination if the condition of the home will be a contingency in the contract. 

One exception to this rule is if the seller knew or should have known of a defect regarding the condition of the property, then it must be disclosed. The seller cannot conceal a defect, such as patching and painting an area known to leak, stacking large boxes to hide a wet area or planting shrubs to conceal large pools of water. Additionally, the seller may not lie or throw the buyer off.

The seller has the option of answering disclosure questions regarding the home or selling the property “as is” without representations or warranties of any kind. The seller fills out the forms to the best of their knowledge in either situation. It is important to note that failure to disclose or problems regarding the home after sale are the most litigious issues when buying or selling a home. When in doubt, fix it and/or disclose it.

One way to protect the seller is to include a home warranty for the buyer for the first year. The cost is approximately $370.00 and should cover most systems and appliances if they are working at sale. Our office can order the warranty. If the seller chooses to offer this option, definitely list it in your advertisement as a bonus. When two homes are equal, the home warranty may tip the scale for the buyer to purchase your home.

Other disclosures to notice buyers are homeowners and condominium associations, zoning or schools. If the property is within an association, the seller must obtain and pay for the disclosure package. Buyers usually have a few days to review the package and may or may not make it contingent in the contract.

After entering into the contract, what are each parties responsibilities?

The Seller simply waits for settlement and keeps the property in the same shape it was it when on the market. If items have been earmarked to be fixed prior to settlement, the seller should do so quickly so that this does not become an issue that may hold up the closing. Seller should provide homeowners or condominium documents to buyer in a timely manner, if applicable. If there are any contingencies in the contract, Seller should monitor those deadlines to confirm that the sale is truly forthcoming. 

The Buyer has a greater burden while the contract is pending. If borrowing money to purchase the property, the Buyer should contact a mortgage company, loan officer, mortgage broker or bank immediately so that the funds will be available at closing. If you need assistance in obtaining a loan, we can suggest some sources for you to contact. The mortgage company will require a lot of paperwork to get the loan approved through their underwriting department. Our advice to buyers is start getting the paperwork together ahead of time, specifically, monthly statements listing assets and liabilities. The Buyers should also make the determination of how they would like to take title to the property. Our firm can advise you on what this entails so that you can make an educated decision, such as what do you want to happen to the property upon your death, what is the purpose of the purchase – business or personal, and what percentage of ownership should each party maintain. 

What to expect at settlement

The day before or of settlement, there is a final walk through to determine if the property is in the same condition as when originally seen or if items were fixed pursuant to a contingency. If a party determines that an item is not in proper order, funds can be held in escrow at settlement so that the closing can still go forward. 

All parties will need to attend closing unless special circumstances have been discussed. If either party cannot attend settlement, we need to know as soon as practical to create and execute a power of attorney, as well as get it approved by the lender. 

At closing, the Seller executes the Deed and approximately 10 other papers regarding the sale.  If this is an all cash deal, the Buyer will execute even less documents. If there is a loan, the bank documents will take approximately a half hour or so to execute. All parties should plan on attending closing for an hour. 

The most important document we will review is called the HUD-1, which contains all the figures regarding the costs of settlement. Our office should be able to provide you with these figures prior to sale. See Frequently Asked Questions about Settlement and Refinances Section.