Our Guide for Those Looking to Sell Their Connecticut Home
Table of Contents
- Best Time of Year to Sell a Connecticut Home
- Cost of Selling a Connecticut Home
- Legal Requirements and Considerations
- Options for Selling a House in Connecticut
- Connecticut Purchase and Sale Agreements
- Negotiation Process – Offers, Counteroffers & Acceptance
- Escrow Process in Connecticut
- Closing Process in Connecticut
Your home is your castle. A place of refuge after a long day’s work and where you’ve no doubt made countless memories with friends and family. But there comes a time in many of our lives when selling our Connecticut home is necessary.
Perhaps the kids have moved out and it’s time to downsize, or you’ve outgrown your first starter home and are looking to expand your family. No matter the reason, selling a house in Connecticut can be a complicated process with numerous legal and other considerations to contend with.
For most Connecticut residents, their home is the largest financial asset they have. Not to mention, it often holds a certain amount of sentimentality, from pleasant memories to the hard work you put into remodeling the kitchen.
Because of this, selling a house in Connecticut isn’t a simple transaction. It’s ok to be hyper-cautious about making sure it’s done right, and in a way that benefits you and your family to the greatest extent possible.
While the process of selling a house in Connecticut is similar to that in other states, Connecticut does have its own unique local practices and real estate laws to contend with. Making yourself familiar with this process early on in the stages of selling your home can help you avoid major headaches and problems down the line.
This guide will walk you through the ins and outs of selling a house in Connecticut, making sure you don’t get hit with any major surprises along the way. From working with a listing agent to legally required disclosures, we’ve got you covered.Want to sell your Connecticut home and save thousands? Find out how (February 19, 2020)
Best Time of Year to Sell a Home in Connecticut
When it comes to selling a house in Connecticut, timing matters. But it’s not just the month or season you need to take into consideration. Certain property types sell better at differing times of the year, and homes (on average) may sell faster or slower, or even at a higher closing price during particular months.
Best Time of the Year to Sell in CT
They say location is everything in real estate, but when it comes to selling a home, so is timing. For example, listing a home in mid-winter when moving companies and buyers have to deal with difficult road conditions and sub-zero temperatures isn’t exactly optimal.
The good news is that Connecticut has a very clearly defined real estate cycle, with property prices both rising and falling like clockwork. Using actual real estate transaction data, we can easily chart the best time to sell your property in Connecticut based on your goals. This makes planning to sell a home in Connecticut an easier and more fruitful endeavor.
If you’re planning to sell your home in CT, let historical data be your guide.
For example, selling a home in July could end up netting you almost 17% more on the closing of your property, while selling in February or March might cost you a whopping 14% at closing (as compared to the average sales price).
Best Time of the Year to Sell for a Profit
Months Homes Sold at Above Average Prices (in order of highest to lowest):
Months Homes Sold at Below Average Prices (in order of lowest to highest):
PRO TIP: Remember, these figures are based on the moth the homes closed/sold in, NOT when they were listed. Depending on your local market, homes across CT on average sit on the market for around 68 days. However, this number can go as low as 30 and as high as 120 days. So, plan accordingly.
Best Time of the Year to Sell your House Fast in CT
Money isn’t always the primary motivator for selling a home. Life circumstances often dictate that you need to sell your home fast. Looking at actual data we can uncover which months are the best months to sell your home quickly in CT.
Selling a home fast is especially important for many Connecticut home sellers. Job transfers, a death in the family, changing needs and other major life events may require you to move quickly. But oftentimes the one thing holding you back is the sale of your existing home (likely so you can purchase another).
For example, those homes closed in July or September were on the market 8-11 days less than average, while those closed in January were on the market for an additional 13 days on average.
Months Homes Closed Faster Than Average (in order of fastest to slowest):
Months Homes Sold Slower Than Average (in order of slowest to least slow):
PRO TIP: Remember, these figures are based on the moth the homes closed/sold in, NOT when they were listed. Depending on your local market, homes across CT on average sit on the market for around 68 days. However, this number can go as low as 30 and as high as 120 days. So, plan accordingly.
Buyer / Property Type Matters
Single-family homes are an ideal candidate for those with children. Buyers for these homes generally start looking in the spring, with an ideal “move in” date early June when the school year ends. Those with properties in the Lake Region often see more interest and action in the market between Memorial Day and Labor Day when interested tourists seek out the purchase of summer homes.How Can I Sell My House Using ISoldMyHouse.com? Learn more (February 19, 2020)
Cost of Selling your Home in Connecticut
Selling a home in CT comes with costs. Let’s take a look at what you can expect when selling your Connecticut property.
1. Conveyance Tax (Transfer Tax)
The Connecticut Transfer tax is a tax that is levied against any transfer of real estate property. The only two exclusions are for foreclosures and “short sales”.
The state’s current rate of transfer tax is calculated at 0.75% for any sale up to $800,000. Sales of property above $800,000 are subject to a conveyance tax of 1.25% by the state. Further, it is not uncommon for the town or city the property is located within to charge their own local conveyance tax. This local conveyance tax at the city/town level generally ranges between 0.25%-1.25%.
2. Costs Associated with Remedying Title or Survey Issues
In the event that issues surrounding the title or survey emerge, contacting a local real estate attorney is the advised route to obtain counsel on your options and cost of resolution.
3. Local Government / Municipal Costs
Generally, there are localized costs associated with the sale of a Connecticut house. These may include local stamp taxes, recording fees, community association estoppel fee, or other fees imposed by the county, city or town such as those for utilities or local taxes.
4. Seller Attorney Fees
It is important to note that in the state of Connecticut it is required that a licensed attorney bet at the close all real estate transactions taking place within its borders. This is contrary to many other states in the US in which title companies are allowed to handle escrow and closing matters. Most attorneys charge by the hour, however, you may be able to find Connecticut attorneys offering “flat fee” real estate closing services.
5. Real Estate Agent Commission
While there are other ways to sell your home than going with the traditional real estate agent listing, if you do hire an agent, they are paid based on a commission rate calculated against the sale price of your home. We’ll cover the costs associated with hiring a real estate agent later in this guide.
For now, understand that real estate commissions in Connecticut are defined as a percentage of the sale price of a home and that while standard rates do exist, they are negotiable.
6. Home Warranty Fees
Some Connecticut home sellers opt to offer a home warranty to cover components or systems of a house that may pose a risk of failure for the buyer. Although optional, offering a home warranty is a way to sweeten the deal, attract more buyers and remain competitive during months when the real estate market heats up.Want to sell your Connecticut home and save thousands? Find out how (February 19, 2020)
Legal Requirements and Considerations
Do You Need a Lawyer?
Although most states do not require an attorney for you as a seller to sell your home, this is NOT the case in Connecticut. Under Connecticut law, a real estate attorney is a mandated requirement in order to verify that the title of a property is marketable and valid, that the property is free and clear of any liens and that the transaction is ready to move forward. States with this requirement are often referred to as “attorney-only” states.
Although this may represent an additional expense, having a lawyer in your corner is also never a bad idea for contract review or to assist in negotiations. Real estate attorneys may also be useful for assisting with unconventional circumstances such as with a lease-to-own or owner-financed deal, and with any issues that might arise with contract disputes or title issues.
Connecticut Real Estate Disclosure Requirements
Connecticut, like most states, requires that sellers disclose certain information regarding known material defects about the condition of the home to prospective buyers. This requirement is outlined under Connecticut General Statuses § 20-327b. Such disclosure is part of The Uniform Property Disclosure Act and applies to the transfer of: Residential Real Property of 4 dwellings or less.
Failure to comply can result, in addition to other potential consequences, the requirement of crediting the buyer with $500 or the amount of cash designated in Section 20-327c at closing if the seller fails to provide the required disclosure report.
The form itself is comprised of 36 questions covering basic information such as when you purchased the home, the home’s age and so on, in addition to more specific information about the condition of systems and components. Each question allows you to provide additional comments if necessary, as well as encourages the seller to attach additional details in separate pages if warranted.
In addition to “yes” and “no” answers, you may specify “unknown” for instances where you are not aware of the condition of a particular item. Under CT law, you as a seller are under no legal obligation to have each component or system inspected for its condition.
Seller’s Federal Disclosure Requirements
In addition to the aforementioned disclosure requirements set forth by the Connecticut statute, sellers must also abide by federal disclosure requirements.
- If the home you are selling was built prior to 1978 you must disclose any lead-based paint hazards in the property
- You must provide any inspection reports relating to lead-based hazards in the home
- Provide an EPA-approved informational pamphlet to buyers
- Allow buyers to conduct their own lead-based assessment
- Include specific warning language relating to lead-based hazards in the sale agreement
Purpose/Benefits of Disclosure
Although the state’s mandates regarding disclosure are pretty standard, there are a number of long-term benefits that can be had from or by making such disclosures for sellers.
Benefits of Disclosure Include:
- Improved negotiations at the deal table
- Early discover of issues leads to better valuation
- Opportunity to make improvements on the home
- Ensures a fair deal from both sides of the table
- Legal compliance
- Reduced liability
Options for Selling a House in Connecticut
Selling With A Real Estate Agent
When most Connecticut residents think about selling their home, they think of listing with a real estate agent. In the state of Connecticut, you may also see seller real estate agents being referred to as listing agents.
Not only does a real estate agent handle the listing and marketing of your property, but they also aid in helping you through every step of the process from showings and staging to contract negotiation and closing.
Listing agents will provide you with a comparative market analysis (referred to as comps), and provide pricing recommendations and strategies tailored towards your specific goals.
Real Estate Commissions in Connecticut
Commission paid out to a seller’s agent is generally calculated as a percentage of the final sale price of the home. The percentage of commission can vary, with lower levels of service usually corresponding to less robust services.
Full-service agents handle the listing, marketing, showing, staging, negotiation, and closing of your home. Marketing expenses are handled by the agent out of their own pockets. These agents on average charge between 5-8% in Connecticut. This commission rate is split with any agent that may be representing the buyer’s agent. Commission rates with your seller agent may be negotiable.
The commission is paid out as part of the sale price upon closing and is not required upfront.
Connecticut’s Multiple Listing Service
Developed by REALTORS®, the multiple listing service, also known as MLS, is a multimillion-dollar real estate technology. The fundamental principle behind the MLS is that it helps brokers and real estate agents share information on the properties they represent for sale through a singular network.
Sellers benefit by exponentially increased exposure for listed properties, while buyers benefit do to the ability to quickly identify ideal properties on the market for their clients to purchase.
This system facilitates cooperation between competing agencies, brokers and agents, leveling the playing field and providing value for every party involved.
As a consumer, you can access MLS listings published on brokers’ and agents’ websites, but the MLS itself is a private database created and maintained by licensed real estate professionals.
After interviewing and selecting a real estate or listing agent of your choosing, you will sign what is known as a “listing agreement”. This agreement grants the agent the legal right to market and coordinate the sale of your home on your behalf.
Listing Agreements Generally Cover the Following Terms:
1. Commission Rate
The rate of commission you agree to pay as a seller (usually ranges from 5-8% in CT). This fee, as mentioned earlier, gets split between the buyer’s agent and your agent at closing.
2. The Type of Listing
Listings can either be “exclusive” or “non-exclusive”. Exclusive listings are the most common type and require you to pay a commission to the selling agent no matter who or where the buyer comes from. With open or “non-exclusive” listings, on the other hand, you pay whichever agent brings the seller the commission.
3. Listing Duration
Each listing agreement will cover a specific time-frame, after which the contract expires and you are free to hire another agent to do the job, handle the sale yourself, or extend the existing contract.
4. Listing Price
Your agent should provide you with an in-depth market analysis and a detailed breakdown of comparable sales in your locale. Based on the data, their experience as an agent and your goals, the listing agent will provide you with advice on pricing strategy. The agreed-upon price will be included as part of the listing agreement.
5. Any Items NOT Included as Part of the Sale
In some cases, there may be instances where certain items are not part of the home’s sale. For example, perhaps you plan to take the refrigerator with you when you leave, or an heirloom chandelier. Any such items you wish to take with you must be included in the listing agreement.
6. Detailing of the Obligations and Duties of Both the Seller and Listing Agent
Each listing agreement should (in detail) spell out the obligations you have as a seller to the agent and the obligations the agent has to you as the real estate agent representing your property. For example, the listing agreement will specify the ways in which your agent will market your property, the type of insurance that must be maintained on the home, and the disclosures you are required to make.
Selling Without a Real Estate Agent or By Owner
Although most Connecticut residents opt to sell with the help of an agent, non-traditional options offer a range of benefits of their own, with a growing number of sellers CT flocking to these opportunities in lieu of paying out high commission rates to an agent.
DIY or For Sale By Owner
Selling your home going the DIY or For Sale By Owner in Connecticut route has its challenges, and is certainly more work, but the payoff can make it more than worthwhile if you do your homework and put in the effort.
In fact, on a $250,000 home with a 6% commission fee, you can save $15,000. Further, according to the National Association of Realtors’ Profile of Home Buyers and Sellers, homes sold by their owners also often sell more quickly, sometimes in as little as two weeks.
But before you decide to dive off the deep end and handle your home’s sale on your own, bear in mind that the process isn’t exactly a cakewalk. Apart from marketing, staging and negotiating the sale, you’ll also be responsible for both the financial and legal paperwork associated with the transaction, something you’ll no doubt want to hire an attorney to help with.
Tips for Selling the DIY Way:
- Prep your home for the market. This means professional cleaning, removing any clutter, and staging the property both inside and out for viewing.
- Competitively price your property. With real estate platforms and data readily available online from sites such as Zillow and Redfin, you can do your own market research to find comparable properties and price your home similarly to those that best represent your home and sold within a timeframe that you are comfortable with.
- Invest in a flat fee MLS listing service in Connecticut in order to exponentially expand your reach to prospective buyers both in the area and nationwide (more on this below).
- Get a marketing plan together. Consider listing your site online, in classified ads and platforms, your local newspapers, social media, and even starting a website where you can digitally showcase pictures, videos of the property and more.
- Know your home’s best-selling points and put a “pitch” together to “sell” them both in person and in print or online.
Flat Fee MLS Listings
As previously mentioned, MLS is short for “Multiple Listing Service”. The MLS consists of a network of over 900 individual MLSs nationwide in the USA. Each MLS is separate from each other, meaning that a real estate agent in West Hartford, CT cannot view listings in San Diego, CA. This makes it critical to ensure you are listed in the proper MLS.
Why is Paying for a Flat Fee MLS Listing Worthwhile?
- The MLS essentially represents the entire “real estate market”
- In the US, over 90% of all sold properties are the result (at least in part) of MLS listing exposure
- Listing in the MLS means that all local Realtors®, agents and brokers will be able to find and promote your listing to their clients
- Potential buyers can find your home listed on hundreds to thousands of public MLS websites
- Those properties listed on MLS tend to sell faster and at a higher price
- You can avoid Connecticut’s high real estate agent commission rage (on average 6%)
- You retain the right to sell your house yourself
- You have full control over your listing
- Qualified buyers will call you direct
- You set the terms of the contract offer and negotiate conditions directly
- Your MLS listing can be canceled at any time if your situation changes
Want To Learn More About Flat Fee MLS Listings?
If you want to save at least 50% of the Realtor commissions, check out our article about 9 Things FSBO’s Need To Know About Flat Fee MLS Listings
Connecticut Residential Purchase and Sale Agreements
In simple terms, a home purchase agreement, also called a sale agreement or purchase contract, is a contract that details the conditions of the sale to which both the buyer and seller agree to. This agreement is legally binding, and it is advised that the agreement be both drafted and reviewed by an attorney you trust.
NOTE: The majority of clauses within the purchase agreement are designed to protect the buyer.
The agreement will cover such aspects of the sale such as
1. Sale Price
This will include both the actual sale price of the home as well as how much the buyer agrees to put down at the contract signing date, what amount will be financed and any balances due at closing.
2. Financing Contingency
Financing contingencies are a common rider included in many purchase agreements. Generally, they define a timeline during which the buyer must qualify for adequate financing in order to purchase the home.
Similarly, a rider may be included to protect the buyer, stating that the purchase is contingent upon them obtaining financing at favorable terms (such as within a specified interest rate rage).
Other Financing Clauses May Include:
- Dates by which the buyer must have applied for a mortgage
- Dates by which the buyer must have obtained pre-qualification, pre-approval and/or final approval by the lender
3. Property Description
Unlike some states, Connecticut is not a “buyer beware” state as it relates to residential property. This means that the rule of “Caveat Emptor” does not apply to homes and residential property. As such, sellers are required to meet full disclosure requirements.
NOTE: Caveat Emptor, is still the rule of law in Connecticut as it relates to commercial property, where it is the buyer’s, not the seller’s, responsibility (in large part) to do their own due diligence on the property.
The property description should accurately describe the property including:
- Size of the home’s square footage and any additional structures such as a detached garage
- Lot size
- Number of lots included
- Frontage on a road or body of water
- Number of living units
- Finished basement
- Rights of way, easements or appurtenant rights
4. Inspection & Repairs
Under the agreement, an inspection clause may dictate that the buyer has the right under the terms of the contract to inspect the property by hiring one or more contractors or licensed inspectors to look at the property.
The contract will need to specify which, if any, repairs the seller agrees to make as a result of the inspection prior to closing.
5. Title and Survey
The agreement will outline which party is responsible for title insurance and the duration of time the buyer has to review and/or object to the results. In the event that you, as a seller, provided a survey or the buyer ordered one themselves, the agreement will specify how long the buyer has to identify any issues. In the event that a resolution to a problem is required, a timeline for this solution will need to be established and incorporated into the contract. IN the event that you cannot or do not want to resolve the problem (due to finances or other considerations), incorporating a clause that states you have the right to cancel the agreement and return the deposit should be included.
6. Personal Property / Excluded or Included Items
Just because you are selling your home does not mean you have to sell everything in it. From furniture, to appliances, and even light fixtures, you get to decide. But, you must specify in the agreement which items are staying behind and which are not part of the deal. Both you and the buyer should make a list of the property they expect to sell/purchase. From there you can both negotiate a deal.
7. Closing and Move in/out Dates
Dates are very important with regard to the process of selling a home. Generally, the closing date for Connecticut properties lands around 30 days. However, this date is largely dependent upon the lender and may require an extension.
8. Other Riders
Connecticut Realtor forms also have a range of optional riders that cover such circumstances as those that involve:
- Owner financing
- Homeowners’ associations
- And more…
Negotiation Process – Offers, Counteroffers & Acceptance
Real estate deals are an evolving process with lots of moving parts, contingencies and more. All of which means that a lot can change between the point at which an initial offer is made and closing day.
Rarely is selling a home as simple as getting paid your list price without some form of concession and negotiation. These negotiations can go on for weeks until both parties reach (or don’t reach) an amicable deal.
A counteroffer is the medium in which this negotiation is dealt with. Counteroffers are generally handled by either your real estate agent or attorney (unless you are selling DIY). Think of selling as a process vs a transaction.
Counteroffers arise when the terms of the initial offer are not agreeable. The counter-offer provides you with the opportunity to take a hard look at what items you are willing to compromise on and which are potential “deal breakers”.Want to sell your Connecticut home and save thousands? Find out how (February 19, 2020)
Escrow Process in Connecticut
When a buyer decides on a property they are interested in buying, they first make a purchase offer. As part of this purchase offer, they most often provide “earnest money”. This earnest money is a deposit made as a consideration to be held in escrow by an escrow agent.
The role of an escrow agent is to ensure the transaction closes on time and without a hitch. It is the duty of the escrow holder to validate that all conditions and terms of the buyer’s and seller’s agreement are met prior to the finalization of the deal.
This process ensures that all funds, required forms, documents are accounted for and that any loans or liens have been paid off as part of the transaction, and that the new buyer will have a clean title prior to the purchase of the property.
Money is held in what is known as an “escrow account”. Think of this account as a type of “holding tank” for the money a buyer will use to pay for your home.
Escrow Agents May Collect the Following:
- Tax statements
- Insurance and fire policies
- Loan documentation
- Title insurance policies
- Terms and conditions of the sale
- Any requests for payment of services to be covered by the escrow funds
Common Elements of the Escrow Process
At this stage the buyer will make an offer on your home. Generally, this is done by signing a formal “binder agreement” or an “offer to purchase”. Accompanying this offer is a payment of 1% of the purchase price.
An inspection is often conducted by the buyer “post offer” acceptance. This inspection is generally conducted by a licensed home inspector and is used to uncover any potential issues that need to be resolved prior to signing of a purchase agreement.
Presuming you accept the buyer’s offer, the buyer will sign the contract of sale. Your legal counsel will need to review the documents, negotiate any elements that need adjusting and so forth. Once the contract has been legally executed, the rights and obligations of you as a seller and them as a buyer become set in stone. Generally, neither party can back out of the deal from this point forward, except for as provided for under certain contingencies such as a “mortgage contingency”.
At the time of contract signature the buyer will provide a deposit on the property of around 10% based on the agreed up on sales price. This deposit is held “in escrow” and is non-refundable. In the event that the buyer backs out for reasons other than those allowed under any contingency in the contract, the seller (you) will get to keep the deposit.
Due to the lengthy and complicated nature of obtaining a mortgage, the buyer will have likely began this process as early as possible.
Search and review of the title in order to verify and confirm that you have a clean title to the property free from liens or other restrictions.
As previously mentioned, title insurance protects the lender and buyer against any potential monetary losses due to exposed title defects or other claims against the property.
Unlike some states, in Connecticut a survey is not often required by lenders. It is both a costly and time-consuming ordeal. Because of this most buyers waive their right to a survey.
An often-mandated requirement by lenders and paid for by the buyer.
Final Walkthrough Inspection:
Just prior to “closing” the buyer usually conducts a final walkthrough of the property with their attorney or real estate agent to ensure nothing has substantially changed and that the condition of the property is that guaranteed in the contract.
Adjustments refers to the alteration of the final sales price in order to take into consideration expenses incurred during the periods they owned the property (such as prorated taxes, water and sewer charges, condominium fees, etc.).
The final stage of the process. At this stage the buyer will sign all required bank documents and pay any balance of the purchase price to you the seller. As the seller you will also execute any documents necessary such as a deed and paying conveyance taxes. They buyer’s attorney will file the signed deed and the buyer will take the keys and ownership of the property.How Can I Sell My House Using ISoldMyHouse.com? Learn more (February 19, 2020)
Closing Process in Connecticut
The closing is the time at which you formally transfer ownership of your home to the buyer. This process can take place anywhere both parties agree to. In Connecticut, when the lender notifies that everything is ready, the closing attorney will coordinate with all involved parties and their respective agents to schedule the “closing ceremony”.
Generally, within three business days of closing the lender will provide the buyer with what is known as a “closing disclosure” that outlines and details the terms of the loan, and subsequently provides the funds the buyer needs at closing in order to make the purchase.
The closing ceremony itself takes around an hour or less. During the ceremony, the closing attorney will explain to each party what the closing documents mean and answer any questions either party may have. Presuming everything is agreeable, the attorney will collect and distribute funds from their trust account.
Once closing has come to an end, the attorney will record the deeds. One deed covers conveying the property and the other and the other the lender’s security deed. In IL it takes approximately one month for the original deed to be returned to the buyer.
The Closing Process in Detail:
- Title Search: ran just prior to the closing ceremony in order to uncover any assessments or liens on the title. If the title comes back as “clean” the closing can proceed unhindered.
- Attorney prepares paperwork for the transfer of the title/deed and will file the application for title insurance presuming the lender requires such.
- A final closing date will be scheduled that is amenable by both parties.
- Calculation of the total amount (in the form of a cashier’s check) that the buyer needs to bring to the closing.
- Final walkthrough, usually performed the day of or the day before the closing ceremony
- Buyer and seller, at closing (settlement table) sign all requisite closing documents and any final loan documents.
- Buyer remits remaining funds in their down payment to the attorney via cashier’s check
- Attorney records the transaction and deed with the local municipality
- Buyer receives keys and legally takes possession of the property
We hope that you have found this guide informational and beneficial. Selling a home can be an emotional and exciting time in one’s life. But it can also be a stressful one as well. Knowing what to expect and how to best prepare for the process can help you remain calm and in control throughout.
About the Author: Kris Lippi is the owner of ISoldMyHouse.com and the broker of Get LISTED Realty. He actively writes about real estate related topics such as buying and selling homes, how-to guides for around the house and home product recommendations. He has been featured in Inman, Readers Digest, American Express, Fit Small Business, Policy Genius, Lending Tree, GoDaddy, Manta as well as other major websites. Read more about us here.