Steps to sell a home in California

Selling a home in the Golden State is a major undertaking. With various required disclosures and potential legal pitfalls, there are a number of things you should know before you begin the process.


Why Do You Need a Real Estate Agent?

You can try to sell your home on your own, but a real estate agent will know the current value of similar homes in your area, and how to effectively present and market your home to maximize its potential. According to the latest report, home sales involving real estate agents usually involve purchase prices higher than those without an agent.

Your Listing Agreement

There are three main real estate listing agreements that you should be aware of. An open listing is one where the owner retains the right to sell the home and pays no commissions. An exclusive agency listing is used for a sale by the owner. The owner executes the listing agreement with a broker if the broker is the cause of the sale. With an exclusive right to sell listing, the seller agrees to pay a commission to the listing broker regardless of who brings in the buyer.

How to Set the Sales Price

Your agent typically determines the listing price of your home by running a CMA report. Other factors should also be considered, such as proximity to schools, amenities, parks, golf courses and freeways.

What to Include in Your Listing Agreement

Listing agreements should include details, such as:
• Sales price and commission
• Duration of the agreement
• Responsibilities of the seller and the agent


In California sellers are required to provide certain disclosures about the property, such as:
• Natural hazards
• Illegal substance contamination
• Lead-based paint
• Special assessments
• Sex offender registrations

Failure to properly disclose or to make other required disclosures can expose you to a legal action down the road.

Getting the Offer

An offer is a proposal to pay a certain price based on set terms and conditions. It’s not a legally binding contract until the seller accepts the offer and its material terms and then notifies the buyer that it has been accepted.

A counteroffer rejects the original offer based on purchase price or other terms or conditions, and proposes a different price or new terms.
After an offer is agreed on and signed by all parties, the buyer deposits funds into an escrow account, secures mortgage approval, arranges a home inspection, and follows all state and local regulations regarding transfer of the property.

The Purchase Agreement

A purchase agreement is a legally binding contract for the sale of real estate. It includes details, terms and conditions such as:
• The identities of the parties
• A description of the property
• Price and financing terms
• Items included in the sale
• Guarantee of clear title
• Date of closing and inspection

Negotiating Post-Contract Issues
If an inspection turns up material defects, the buyer can insist that you pay to fix the problems or lower the purchase price so the transaction can still proceed or sold “as is”.
Closing the Sale
At the close of escrow, several important events occur, such as:
• The buyer signs a promissory note.
• Seller pays certain closing costs.
• Buyer signs the deed of trust on the property as security for the loan.
• Title insurance is verified.
• The deed is recorded on the day escrow closes.

As the seller, you don’t have to be present at closing, as long as all costs are paid and all documents are signed. You typically have to turn over the keys to the buyer that day if the deed is recorded at that time.