By Eileen Doherty
In the 1950s, 1960s and 1970s buying a home was an expectation. Many older adults today own their own home. The goal for many individuals was to buy the home, stay there as long as possible and pay off the mortgage. Some individuals have bought and sold one or two homes during our lifetime. Buying and selling a home is considered one of life’s “major events” and not something most of us do regularly.
If you are faced with selling your home and buying a new home, selecting a realtor is critical. Real estate agents must be licensed with the Colorado Department of Regulatory Agencies. The record of the agent can be viewed by the public. Some real estate agents are designated as Senior Real Estate Specialists. These individuals have a national certification to work specifically with older adults.
As a listing agent for the seller, the real estate agent works for you and is responsible for getting you the best price for your property. When you sign a listing contract, which is a legal and binding contract, the agent should conduct a market analysis of similar properties in your neighborhood to determine the asking price.
Some agents will suggest that you spend money upgrade the house by laying new carpet, painting the house, putting in new cabinets and other updates. Other agents will suggest that you sell “as is” and let the new buyer make the necessary changes. There is value to both approaches.
If you do nothing, you may need to take a lesser price to allow the new buyer to make the upgrades, but that may relieve you of the responsibility of hiring contractors, purchasing supplies, and supervising the repairs. If you decide to do some upgrades, you will need to determine which types of upgrades you will make and how much money you will spend. This is important, as some upgrades are purely cosmetic and will not change the selling price, nor will they return you a higher price at the time of the sale.
When listing your house for sale, care should be exercised with your valuable possessions. This includes such things as antiques, jewelry, art, and other household furnishings and personal items. Buyers have the opportunity to enter parts of your house that would normally not be accessible to guests in your home.
After you have listed your home, you will receive sales offers from prospective new buyers. Sales offers are legal contracts that specify the price the new buyer will pay you for the house including the terms of the payment.
The payment terms specify if the buyer will pay cash, obtain a loan, already has a loan, and when the buyer wants to take possession. The terms also specify the date of the closing.
The seller has the option to accept the sales offer as presented or to counter the offer with a change in the price and terms of sale other than those presented in the contract, or to reject the offer.
Often the sales offer also has other requests from the buyer such as home inspections for such things as radon, furnace inspections, roof inspections, and other defects. It is usually the responsibility of the current owner to hire and pay these inspectors to satisfy the terms of the contract to purchase or the sales offer.
As the home owner when you accept a sales offer, the home is temporarily taken off the market to allow the potential buyer to have the terms of the sales offer completed, as well as to obtain the necessary financing. It is common in the listing contract to require the potential new buyer to pay some earnest money, which is credited at the time of the closing of the sale. The purpose of the earnest money is to ensure that the buyer will fulfill their obligations and to provide some protections for the seller to agree to take the property off the market and not accept any additional offers. The earnest money is held in a trust account by the seller’s real estate agent.
After both parties have agreed to the terms of the purchase, a date for closing is set and the terms that were agreed up such as upgrades to the property, inspections, and financing must be completed. These are legal obligations for both parties.
One of the protections for the seller is to purchase title insurance. This conveys to the buyer and protects to the seller that there are not outstanding liens or other holders to the title of the property. It is usually the responsibility of the seller to pay the current year’s taxes and utilities that are due to the date of closing and/or possession.
Commissions to the seller’s real estate agent are usually paid by the seller out of the proceeds. The buyer’s agent is usually paid by the seller’s real estate agent.
At the time of closing the purchaser pays the balance due on the loan per the terms of the contract, the seller agrees to the date of possession and gives the new buyer the keys to the home.
For more information, sellers are advised to contact their attorney when selling a home. For other information or assistance, call 303-333-3482.
~ Eileen Doherty, MS is Executive Director of the Colorado Gerontological Society since 1982. She can be reached at doherty001@att.net.