Lois Rogan | Red Bluff | Tehama County Real Estate

STEPS TO A RESIDENTIAL TRANSACTION - SELLER

1. Comps are run on the property for the last 6 months.

2. Agree on a price.

3. You and your realtor will devise a marketing plan.

4. Your agent will complete seller’s net sheet with typical expenses (ordered from escrow).

5. Your agent will visually inspect the home and complete the following forms at the listing appointment:

• Disclosure Regarding Real Estate Real Estate Agency Relationships (Form AD). You are required by law to fill this form out first.
• Residential Listing Agreement (Exclusive) (Form RLA)
• Transfer Disclosure Statement (Form TDS)
• Seller’s Advisory (Form SA)
• Statewide Buyer and Seller Advisory (Form SBSA). This form is not required but is highly recommended.
• Supplemental Statutory and Contractual Disclosures (Form SSD)
• Smoke Detector Statement of Compliance (Form SDS)
• Water Heater Statement of Compliance (Form WHS)
• Data Base Disclosure (Form DBD)
• Natural Hazard Disclosure (Form NHD). Alternatively, order a Natural Hazard Disclosure Report. This report is typically ordered at the opening of escrow. The report is in the form of a completed Natural Hazard Disclosure Statement (Form NHDS) that exempts the agent and his or her client from the liability for the disclosure accuracy, transferring liability to the third-party disclosure provider per AB 920 which became effective on January 1, 2005. The report is designed to be informative and concise for easy reading by agents and their clients. The cost ranges between $60 and $130. Each report typically includes the following:
  • Special flood hazard area (FEMA)
  • Potential flooding due to dam inundation
  • Very high fire hazard severity zone
  • Wild land fire area
  • Earthquake fault zone
  • Landslide zone
  • Liquefaction zone
  • Notice of special tax assessment
  • Airport influence
  • Military ordnance

• Lead-Based Paint and Lead-Based Paint Hazards (Form FLD). This form is only required if the home was built prior to 1978.
• Seller’s Affidavit of Non-foreign Status and/or CA Withholding Exemption (Form AS). One must be filled out for each seller. If the seller is a trust, you need a copy of the trust instrument and the Tax ID number.
• Seller Property Questionnaire (Form SPQ). This form is not required but is highly recommended.
• Disclosure and Consent to Representation of More than One Buyer or Seller (Form DA).
• Home Owner Association Information Request (Form HOA)

6. Your agent will take pictures of the property.

7. Your home is listed on the home on the Multiple Listing Service (MLS).  There is usually a tour where all the agents can come at one time to preview the home prior to their clients coming by.

8. Your agent will have an open house if you want one.

9. Receive offer from buyer’s agent. The offer typically includes the following:

• Residential Purchase Agreement (Form RPA-CA)
• Buyer’s Inspection Advisory (Form BIA). This form is required by law.
• Wood Destroying Pest Inspection and Allocation of Cost Addendum (Form WPA). This form is not required by is highly recommended.
• Statewide Buyer and Seller Advisory (Form SBSA)
• Disclosure Regarding Real Estate Real Estate Agency Relationships (Form AD). This form is required by law.
• Contingency for Sale or Purchase of Other Property (Form COP). This form is used only if the offer is contingent on the sale of other property.
• Pre-approval letter from lender.
• Copy of earnest money check made out to the Escrow Company or broker.

10. Your agent will typically name what title and escrow companies will be used.

11. You as the seller may accept, reject, or counter to one prospective buyer or multiple prospective buyers.

12. If a counter is made, the buyer may either accept offer or counter.

13. Upon the acceptance of an offer, your agent will return a signed copy of the Residential Purchase Agreement (Form RPA-CA) with all counter offers to the buyer’s agent. You may place another offer or offers in back-up position.

STEPS 14 THROUGH 32 OCCUR ON DAYS 1 THROUGH 16 AFTER ACCEPTANCE

14. Your agent or the buyer’s agent opens escrow and deposits the buyer’s earnest money. This is typically done by the buyer’s agent.

15. Your property is placed on pending or backup status on MLS.

16. Your agent will make sure the buyer’s earnest money has been deposited within 3 days of opening escrow.

17. Escrow will send to both agents and lender a preliminary title report.

18. Escrow will send your agent a commission agreement for signature.

19. Once escrow opens, the escrow company will send you the seller the following:

• Clarification of escrow instructions.
• Commission instructions.
• Grant deed (must be notarized).
• Existing loan information sheet.
• 1099 reporting form.
• Tax form 593 C or W.
• Statement of information sheet.
• Proceeds sheet.
• Preliminary title report.
• Escrow holder’s acceptance (page 8 of RPA).
• Trust certification (only if a trust deed sale).

20. Your agent will forward the following disclosures to the buyer’s agent within 7 days of acceptance:

• Disclosure Regarding Real Estate Real Estate Agency Relationships (Form AD)
• Transfer Disclosure Statement (Form TDS)
  Seller’s Advisory (Form SA)
• Statewide Buyer and Seller Advisory (Form SBSA)
• Supplemental Statutory and Contractual Disclosures (Form SSD)
• Smoke Detector Statement of Compliance (Form SDS)
• Water Heater Statement of Compliance (Form WHS)
• Data Base Disclosure (Form DBD)
• Lead-Based Paint and Lead-Based Paint Hazards (Form FLD) (only if home was built prior to 1978)
• Seller Property Questionnaire (Form SPQ)
• Natural Hazard Disclosure (Form NHD) or report provided by a natural hazard discloser company.

21. Your agent will order a termite inspection within 7 days of acceptance of the offer.  It is sometimes best to have a termite inspection prior to receiving an offer so that you, the seller, are aware of what damages may be necessary to fix.  It is better to be aware of issues upfront rather than have it be a surprise 7-10 days into a contract and making it a negotiating factor.  If a buyer has the termite inspection up front with the disclosures, the buyer can make an offer either subject to repairs or accept the home in its’ “as is” condition.

22. If your agent has not received the following within 7 days, request copies of the following:

• Pre-approval letter from lender.
• Proof of funds for down payment (RPA Section E).

23. If the two previous items are not timely received, your agent will contact the buyer’s agent and/or send Notice to Buyer to Perform (Form NBP).

24. If the buyer fails to perform by date given in the NBP, you may cancel escrow.

25. Your agent will verify that the buyer’s agent has ordered the home inspection. The inspection is usually ordered within the first 7 days.

26. Your agent will verify that the buyer’s agent has ordered an appraisal. The appraisal is usually ordered within the first 7 days.

27. You and your agent will review the termite inspection report.

28. Your agent will forward a copy of the termite inspection report to the buyer and the escrow company.

29. An appraisal will be ordered by the Buyers’ loan company.  If the appraisal does not come in at the agreed upon sales price, the Buyers may cancel the contract, put up the extra money necessary to get the loan, or renegotiate the price of the home.

30. Based on the home inspection, the buyer will submit a Request for Repair. In response to the Request for Repair, you as the seller may do one of the following:

• Agree on all requests for repair,
• Agree to make some of the repairs,
• Decline to make any repairs, or
• Offer monetary reimbursement for repairs.

31. If not all terms in the Request for Repair are agreed to, the buyer may:

• Accept the seller’s response,
• Re-submit a second Request for Repair, or
• Cancel the contract.

32. If the terms of repairs are agreed upon, you as the seller will sign and forward a copy of the Request for Repair to the buyer’s agent and escrow.

33. If Contingency Removal is not received by buyer’s agent, your agent will send the buyer a Notice to Buyer to Perform.

34. If there is no response, the seller may do one of the following:

• Extend the contingency time to accommodate the buyer, or
• Cancel the contract.

35. If the buyer removes all contingencies but fails to execute the contract, the seller is typically entitled to any deposits made by the buyer as liquidated damages (if buyer and seller have agreed to the liquidated damages clause in the contract).

36. If all contingencies are removed, the seller will approve and sign the remaining documents required to complete the transaction:

• Termite clearance.
• Any lease or rental agreements.
• HUD 1 settlement statement.

37. The buyer and seller fulfill any remaining conditions and/or escrow instructions.

38. Your agent will order a home warranty. This is typically done 5 days prior to close of escrow.

39. The seller will approve the final pay-off demands and/or statements from escrow.

40. If the date set for close of escrow passes, and (1) the seller has completed all requirements set forth by the contract; and (2) the buyer’s agent has not responded to demands to perform, the seller may send a Demand to Close Escrow.

41. The buyer signs loan documents.

42. Escrow closes.

43. The transaction will record and fund the next business day.