If you are an Indiana homeowner looking to sell your owner, this home seller’s guide will provide you with all the information you need to know. Whether you choose to hire a realtor or sell by owner, the experienced attorneys at O’Flaherty Law Office can guide you and ensure the process goes as smoothly as possible. Below we will answer some of the most common questions when selling your home.
Do I Need A Realtor?
A realtor is not required to sell your home in Indiana. Many people choose to sell their homes on their own, known for sale by owners. With realtor fees anywhere from 5-7% of the home sale price, many sellers choose to save on fees and do the legwork themselves.
A realtor, however, can be beneficial when it comes to selling the home. They will have access to list the home on MLS, and they will do all the leg work as far as pricing the home, dealing with buyers, preparing paperwork, marketing the home, etc. Paying the commission fee saves you from the time and hassle of handling these things on your own.
Do I Need A Real Estate Attorney?
Just as a real estate agent, you can choose to sell your home without an attorney. However, given the many legal forms that are required when selling homes, the contract review and negotiation process, and the legal requirements that must be fulfilled in the selling process, we would encourage you to reach out to a reputable and experienced real estate agent that can take the guesswork out of the process. The real estate legal professionals at O’Flaherty Law Office are ready to help you sell your home in compliance with all Indiana requirements.
When Is The Best Time To Sell My Home?
Usually, this is a question without a clear-cut answer. While there is a lot of demand in your specific market, the state of the real estate market has been a hot topic lately. With home values soaring, and demand outpacing supply, this is the peak seller’s market. Many homes are selling for higher than the listing price. For those reasons, now is a great time to place your home for sale.
How Do I Prepare My Home For Sale?
Staging a home is vital to get the most value out of it. You want to make sure that your home is clean and de-cluttered. You want the home to be inviting and welcoming, so potential buyers can envision themselves living there. If there are items in the home that need to be repaired, be sure you make those repairs before listing the home. The better quality and condition the home is in, the higher the price you can expect to get.
How Do I Price Or Value My Home?
If you choose to hire a real estate agent, they should perform a market analysis and come up with a fair market value based on recent sale prices of comparable homes. If you are listing the home yourself, you have several different options. You can hire a realtor for the sole purpose of providing a valuation – often known as a Broker’s Price Opinion (BPO). A BPO is an appraisal that is done without an interior inspection of the property. The realtor will assess the value from the curb.
Alternatively, you can hire an appraiser to do a full interior appraisal of the house.
A BPO and an interior appraisal will both have additional costs associated with them. You can choose to do the legwork yourself by looking up all recent sales in your geographic area. You are going to want to look at homes that have similar square footage, bedroom and bathroom size, similar quality fixtures, and that are in the same general condition.
If a home down the street was listed for a million dollars, you might think you can price your home in a similar fashion. But if you are selling a one bedroom, one bathroom 970 sq ft bungalow that is a fixer-upper while that home is a 4,000 sq feet mansion with seven bedrooms, five bathrooms, a full walk-out basement, and was recently renovated with high-end fixtures, then that home is clearly not comparable, and you need to exclude it from your market analysis.
If you choose to value the home yourself, it is essential to devote the time necessary to pricing your home correctly. Pricing it too high will lead to fewer offers and a longer time on the market, which is correlated with lower sale prices.
What Are Real Estate Disclosures?
One of the most important legal requirements you need to be aware of is the Indiana Disclosure laws. In Indiana, there is a form that you must fill out and present to the potential buyers once your house is under contract. In the form, you must disclose whether different features in the house are defective, not defective, you do not know the condition, or they are omitted. It is essential to be truthful in these disclosures, as there are legal ramifications associated.
What Do I Have To Disclose To A Buyer?
As explained above, the disclosure form is used to communicate the condition of different aspects of the home. In Indiana, the Disclosure Form is a preexisting form that includes disclosures for appliances, electrical systems, water and sewer systems, heating and cooling systems, roof, hazardous conditions, and other disclosures related to the home’s wiring, foundation, encroachments, violations of zoning, code or restrictive covenants, any nonconforming use, access to the property, any structural issues, etc.
Can I Get In Trouble For Not Disclosing Everything?
There are legal ramifications for not disclosing defects that are known to you or for fraudulently claiming that an item is not defective when you know that it is. Lying outright or omitting the truth can expose you to litigation and costs and fees for misleading buyers. If you have any doubts, please reach out to an experienced real estate attorney that can help guide you through the process.
What Happens If I Am Offered A Price Different Than The One I Have Listed?
If a buyer offers you a price that you are not happy with, you can reject it outright, or you can counteroffer, or you can reject the offer and ask the buyer to offer you a higher price. You are well within your rights as the seller to negotiate the sale price if you want to or to hold firm to your listing price.
I Have A Signed Contract! Now What?
The first and most important thing to do when you enter into a contract is to read it very carefully. That is because there are several vital timelines that begin to run from the date of acceptance. It would be best if you familiarize yourself with these deadlines. These include the time you have to cancel the contract for no reason, the time for the buyer to conduct an inspection, the time for them to secure financing, etc.
If you are working with an attorney, your lawyer will track these timelines on your behalf. If you are choosing to do this on your own, you need to be well aware of all critical deadlines. Otherwise, you may be bound by something that does not suit your needs.
What Are Seller Concessions?
At certain times, the inspection will reveal certain defects in the condition of the property. As a seller, you may choose to make the repairs at your own expense. Alternatively, you can offer the buyer a credit to offset the cost of repairing that defect.
Why Is The Appraisal So Different From The Fair Market Value?
If a buyer is purchasing the home using financing from a bank, they will most likely be required to assess the value of the home. That appraisal can sometimes come in different from the listing price. This is because the assessed value of the home is not the same as the fair market value. The assessed value has to do more with the taxable value of the property and, as such, can differ from the fair market value.
What Happens If The Appraisal Is Lower Than The Purchase Price?
If a buyer is using a mortgage to purchase the home, the bank will typically only lend to the assessed value of the home. What does this mean for a seller? If you and the buyer have contracted to buy a home for $500,000, but the appraisal comes in at $450,000 – the bank will not issue a loan for more than $450,000. So, what happens now?
There are three different options. First, you can choose to accept the appraisal value and lower the sale price to match the assessed price. Second, the buyer can supplement the difference in value by paying that difference in cash. In the alternative, you can negotiate with a buyer, so you can accept a slightly lower purchase price so that the amount the buyer has to pay out of pocket is not as high but still higher than the assessed value. Thirdly, you can cancel the contract altogether.
You can also choose to dispute the assessment by paying for another, but there is no guarantee that a lender will agree to this or accept the new assessment.
What Are The Seller’s Closing Costs?
Selling a home requires many moving parts, and not everything is covered by the buyer. The seller will also have costs to cover in the transaction. More likely than not, these costs will be subtracted from the profit a seller is expected to pocket. In some rare circumstances where the seller may be underwater, the seller may be required to bring cash to close the transaction. Some of the seller costs are for things like title costs, survey costs, broker fees, and attorney fees, if necessary. This is where the assistance of an experienced real estate attorney is invaluable. A reasonable attorney will explain precisely what the costs are going to be and can help you bypass any unnecessary expenses.
Why Do I Need A Title Company?
If you are selling the home, you must show that you have the right to sell that home. You must have a clean title. There may be issues with the title that you do not even know exist. There may be mortgages on the chain of title that were never cleared or judgments against the property. A title company issues a title policy that checks the chain of title and discloses any title defects that may exist. It also will list any easements or covenants that run with the property. This is another area where sellers may find it worthwhile to consult with a real estate attorney. You do not want to find yourself liable for selling a home that has an unclean title. An experienced real estate attorney like those at O’Flaherty Law can inspect the chain of title and clear any hindrances to ensure there are no issues.
How Do I Choose A Title Company?
When it comes to choosing a title company, you should shop around because there are many options. The title company is typically where the closing will be held. Most lenders will not issue a loan until they have a clear title. If you are working with an attorney, chances are they have a trusted company that they recommend.
What Happens During An Inspection?
During the inspection, a licensed inspector will perform an assessment of the entire home and provide a report of any defect, however minor they may find. It is advisable to do your own inspection before you list your home for sale. This will ensure that you are already aware of any issues and can fix them before listing the house. As a result, you will not have to give any concessions for the buyer to resolve these issues.
Can I Cancel A Contract With A Buyer?
There are several situations under which you can choose to cancel a contract. Read the terms of the contract carefully to understand where, when, and how this can occur. As always, the experienced attorneys at O’Flaherty Law can help you understand and navigate these terms.
How Do I Protect Myself When Selling A Home?
The best way to protect yourself when selling your home is to hire an experienced and trusted real estate attorney. They can make sure you comply with all applicable Indiana laws, meet all contract deadlines, and get the most value from your sale. The trusted attorneys at O’Flaherty Law Office can work with you to take all the headaches out of the process and ensure a smooth transaction.
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