There are basically five stages to a normal residential real estate transaction. There is nothing magical about them. It is simply a matter of the FSBO seller taking each of them seriously and dedicating the needed time and effort. And this process has become far more accessible with the tools and support systems that are now available.
1. Preparation
This is the foundational stage where the property is made ready for the market. The goal is to position the home to sell quickly and for the highest possible price.
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Pricing Strategy: Determine a competitive and realistic listing price based on recent sales of similar homes.
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Curb Appeal: Freshen paint, landscaping, lawn, bushes, sidewalk and driveway edges, etc.
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Declutter & Depersonalize: Removing personal items and excess clutter to help buyers envision themselves in the home.
- Gather Documents, as Applicable: Deed, mortgage paperwork, HOA, pre-inspections, repairs, survey.
- Repairs & Improvements: Addressing minor repairs and considering strategic updates (e.g., fresh paint, new fixtures) to enhance appeal.
2. Marketing
This phase is about creating maximum visibility and generating interest in the property among potential buyers and their agents.
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MLS Entry: Listing the property on the local Multiple Listing Service, which syndicates it to major consumer websites like Zillow and Realtor.com.
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Copy, Photography & Media: Creating compelling copy that tells a story, quality photos, virtual tours, floor plans, and sometimes video to showcase the property online.
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Online Marketing: Promoting the listing through social media, especially Facebook.
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Signage & Traditional Marketing: Placing a “For Sale” sign in the yard and potentially using print advertising.
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Showings & Open Houses: Coordinating access, including lock box, to show the property and hosting open houses.
3. Leads & Negotiations
This is the dynamic phase of converting interest into a solid contract.
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Lead Management: Field inquiries, and do follow ups, with potential buyers and their agents, and gather feedback.
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Offers & Reviews: Accept all offers, review terms, contingencies, and strength of each buyer (e.g., pre-approval status, down payment).
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Negotiations as needed for:
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Purchase Price
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Closing Date
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Contingencies (e.g., inspection, appraisal, financing)
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Inclusions/Exclusions (e.g., appliances, window treatments)
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Repairs or closing cost credits
- Attorney Review: Go over the details of the contract and needed disclosures with an attorney.
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Acceptance & Contract Execution: Once terms are agreed upon, all parties sign the final purchase agreement, making it a legally binding contract. The buyer’s earnest money deposit is submitted to a third-party escrow holder.
4. Transaction Coordination
After the contract is signed, the deal enters a managed process to ensure all contractual obligations are met before closing.
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Open Escrow: The opening of an account with a neutral third party, recommend title company, to hold funds and facilitate the closing process.
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Contingency Management: Coordination and tracking of critical deadlines:
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Inspection Contingency: The buyer completes a professional home inspection and might negotiate requests for repairs or credits.
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Appraisal Contingency: The lender orders an appraisal to ensure the property’s value supports the loan amount.
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Financing Contingency: The buyer formally applies for a mortgage and provides documentation to the lender.
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Title Search & Insurance: The title company researches the property’s history to ensure there are no ownership claims (liens) against it and issues title insurance.
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Communication: Updating of all parties (lender, title, inspectors, buyers, sellers) and ensuring the process stays on track.
5. Closing
The final stage where ownership is legally transferred from the seller to the buyer.
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Final Walk-Through: The buyer conducts a final visit to the property, typically within 24 hours of closing, to verify its condition and that any agreed-upon repairs were completed.
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Signing Closing Documents: The buyer signs the final loan and title documents. The seller signs the deed and other transfer paperwork.
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Funding: The buyer’s lender wires the loan funds to the escrow or title company.
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Recording: The local county recorder’s office officially records the new deed, transferring legal ownership to the buyer.
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Key Exchange & Possession: Once the transaction is recorded and funds have cleared, the agent provides the keys to the new homeowner. The seller must have vacated the property by the time specified in the contract.
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Disbursement: The escrow holder pays out all parties, including the seller’s proceeds, real estate commissions, and other closing costs.