Expert: Lisa Webber - 12/14/2007

Question
Hi Lisa,
My husband and I are selling our townhome in Columbia, MD without a realtor.  It's only been on the market for a week and we have much traffic already.  We've sold a property before in Georgia 8 years ago and it too was a quick process, but it was much cheaper house that didn't make me feel as anxious as I do now.  I basically want to be sure that I'm on the right track of what all I'm responsible for doing.  The house has been completely upgraded and repaired since we've had a tenant move out, so as far as it being ready to market it is.  We had considered a refinance a few months, but decided not to settle.  I mention that to say that I know the title has been checked and no other liens exist.  I have a current appraisal that a buyer could use if they like.  Absolutely nothing else needs to be done to the property, so I feel confident that it would pass an inspection.  My first question is "Do you recommend a specific brand of contract to use when I get an offer"?  I planned to purchase a standard pack from Staples or Office Depot.  I've used it in the past and don't remember any issues.  Next, on a purchase price of $279,000, what would a reasonable earnest money deposit be?  Third, is it okay for the buyer to make that payable to me or should it be to an attorney?  If so, I don't have an attorney; do I really need one?  Last, after collecting the earnest money with contract, what should I be doing next if anything, or is the remaining leg work now left up to the buyer?  My thought was to contact a title company, but wouldn't the buyer's mortgage company be arranging that?  Sorry for so many questions, but I don't like sitting idle, when I feel like I should be do some proactive work.

Answer
That's fantastic that you've had so much interest already!  It sounds like you are well-priced in the area and if you are already having showings and interest, then you should be looking forward to an offer soon.  We use the standard board of Realtors contract so I am not familiar with the office depot contract form.  Being that I am not a real estate attorney, I cannot advise you as far as legal forms go.  I would recommend that if you are selling on your own to hire a real estate attorney so that you make sure everything you are doing is proper and all the forms are legal.  It's always a good investment to have legal advise when working on such a large investment.  When we present an offer on behalf of a buyer on a purchase price of $279,000, normally a buyer will submit an earnest money deposit of $1500 or more.  When we collect earnest money deposits, the check is made out to our broker and is kept in an escrow account.  I am not an attorney, but I would think that you would want to open an escrow account to keep the deposit in as it is refundable to the buyer if their financing does not go through or if any inspections are not acceptable.  The buyer will be doing any necessary inspections as far as termite, and home inspections.  If the buyer has a Realtor, they will have the standard real estate board contract which they will fill out for the buyer.  It is always a good idea for you to have representation, which is why I would recommend consulting with a real estate attorney.  The buyer has the right to choose the title company and the title company will research the title to make sure it is free of liens and will make arrangements to pay off the mortgage(s) on the property and will arrange for settlement.  Keep in touch with the title company to make sure things are going smoothly.  Also, call their mortgage company and make sure that the buyer is qualified for the loan that they are applying for, to keep from having surprises later down the road.  I hope this helps - good luck to you!