Once you have an accepted offer on your home, there are a few things that you should know. For the most part, these are general ideas, applicable to most forms of real estate. Check with your Realtor® to be sure.
1. The Earnest Money Deposit
When the prospective buyer writes an offer to purchase your home, they are requested to provide to their representative agent an earnest money deposit (EMD). The amount of the EMD can give you, the seller, an idea how serious the buyer takes the offer. The more the EMD, the more serious the offer. In general, and EMD of less than $1000 is considered to be not a serious offer, but your Realtor® can advise you how to proceed with the offer.
2. Clouds on the Title
The title to your property is recorded in the public records. A “cloud” on the title to your property is a charge against your property which has been filed in the public records. Examples of common clouds are unpaid property taxes, mechanic’s liens (an unpaid bill from a contractor who did work on the property), and unpaid Federal taxes.
The buyer will expect you to provide a clean title to the property, so you will be responsible for removing any clouds. Your Realtor® and your attorney can assist you.
3. Contractor’s Inspection
Before the buyer prepared their offer on your property, they reviewed the “Seller’s Disclosure Statement”. Still, the buyer will likely put a contingency on their offer that your home be subjected to, and the buyer accept the results of, a thorough inspection by an experienced home inspector. In many cases, the inspector is a former builder. If there are any “surprises” which result from the inspection, you may need to bring about some repairs to your property. Your Realtor® can best advise you here.
4. Pest Inspection
In addition to the contractor’s inspection, your buyer will likely insist on a pest (termite) inspection. While a contractor’s inspection might kill the deal (if major problems are discovered with the home), it is unlikely that a pest infestation will kill the deal. Most likely, the buyer will insist that you, the seller, provide a “clean bill of health” for the home prior to closing the deal. In the worst case, this would likely take the form of a total fumigation of the property.
5. Real Estate Transfer Tax
On January 1, 1995, the State of Michigan increased the real estate transfer tax, taking the total transfer tax from 55 cents per $500 value of the sale to $4.30 per $500 value of the sale. As the seller, you pay this transfer tax when the title transfer is recorded in the public records.
I hope that this series of three reports has been helpful to you in understanding what you must know when you sell your Washtenaw County home.
If you have any questions about any of the topics covered in these reports, please let me know. I’m here to serve you.