Wondering how a home sale works? Selling your property can be relatively simple, or extremely complex, depending on the circumstances and specifics of the sale. Most home sales do have some basic steps in common, so this is what to expect when you buy a home or sell one:

Seller: List and Market Your Property
The first step in any home sale is setting a price. After that, you need to list and market your property. Potential buyers must know the home is for sale, and you’ll attract more interest with a well-publicized listing. Since 85% of home buyers start their search online, you must include the web in your marketing plans.

Buyer: View the Home and Make an Offer
When you buy a home, you may look at several or even dozens of homes before you find the one you want. When you find the home you want, you need to make an offer for the seller to consider. If you’re in a buyer’s market, you may be able to make an offer at or below the asking price. In a seller’s market, you may have to offer the asking price or above, depending on the competition.

Seller: Accept an Offer
If you’re fortunate enough to have multiple offers, you must decide which offer to select. Look for offers from buyers who are pre-approved for a mortgage to reduce the risk of financing snarls. From there, you can choose the offer that you think is best. It can be helpful to prioritize the offers so that you have a fallback in case you can’t reach a deal with the buyer you choose.

Buyer and Seller: Sign a Purchase and Sale Agreement
When the seller accepts an offer, a home sale contract is signed in the form of a purchase and sale (P&S) agreement. Both parties should have lawyers review the agreement to ensure they understand it and to make sure it contains the language necessary to protect both parties.

Buyer and Seller: Execute the P&S
A P&S contains the terms of the home sale, and typically both the buyer and seller must take steps to make the sale go through. The buyer may have to order a home inspection and obtain financing, while the seller may have to file certain inspection documents or perform repairs to the property. If one party fails to execute the P&S, the deal may fall through.

Buyer: Obtain Financing
During the P&S process, the buyer must obtain and finalize financing. This includes arranging the payoff date and determining when and how the funds will be deposited. Pre-approval means you’re more likely to get financing; pre-qualification is less strict, and you may not be eligible for financing once you reach the approval process.

Buyer: Deposit Funds
The seller must deposit the funds in escrow for the deal to close. Typically, a bank deposits funds directly with an escrow or closing agent, who then disburses funds to the appropriate parties.

Seller: Transfer the Deed
When escrow closes, the seller transfers the property deed to the buyer. This is the point at which the buyer assumes legal title of the property, and ownership changes hands. The new deed must be recorded at the registry of deeds when the closing is complete.

Seller: Pay Fees and Costs
Legal fees, real estate commissions and any outstanding taxes typically get paid on the closing date so that the deed transfer is free and clear of any liens. Depending on how the sale is structured, you may need to pay some of these expenses out of pocket before the deal is signed. You will be able to cover these expenses the same day that escrow closes.