Although the steps involved in selling a home are similar regardless of where you live, Ohio's real estate laws and practices are unique in some respects. Becoming familiar with them will help you avoid problems later. Here’s an overview of the basics—from choosing a real estate agent to going through escrow.
Working With a Real Estate Agent
A licensed real estate agent will be an integral part of your home-selling team, and most people selling their home in Ohio work with one. A good agent will help prepare and price your house, market it to prospective buyers, review purchase offers, and negotiate with buyers through the closing.
Before signing up with an agent, get references from other home sellers and check customer reviews on sites such as Zillow and Trulia. Check their licenses at the Ohio Department of Commerce's website.
Signing a Listing Agreement in Ohio
Once you find a real estate agent you want to work with, you’ll sign a “listing agreement,” giving the agent the right to market and handle the sale of your house. Most agents use standard forms created by their state or local Realtor association, such as Ohio REALTORS.
Listing agreements typically cover the following terms.
- Commission that you (the seller) will pay. This typically ranges from 5-6% of the house sales price, and is ultimately split between your real estate agent and the buyer’s agent.
- Type of listing. Most agents will want you to sign an exclusive right to sell listing, which obligates you to pay a commission to the agent regardless of who brings in the buyer. Other arrangements are possible, however, such as an open listing, in which you agree to pay a commission to whichever agent brings in a buyer, or an exclusive agency listing, in which you agree that your agent is the only agent authorized to sell your house, but that you will pay a commission only if the agent brings in the buyer (not, for example, if you do).
- Duration of listing. The listing agreement will cover a set amount of time, such as 90 days.
- List price. Your agent will recommend an appropriate selling price, by both comparing prices of similar homes (“comps”) that have been sold recently in your immediate area, and based on his or her experience in how pricing a home higher or lower than its market value best results in a high selling price in your area. To educate yourself as to whether the agent is recommending an appropriate price, the National Association of REALTORS’ website is a good source of information on prices of houses currently on the market, and websites such as Zillow and Trulia provide data on actual sales prices.
- Items included or not included in the sale. For example, you may plan to leave behind a built-in dishwasher (which will therefore become part of the property that the agent is contracted to sell), but exclude a flat-screen TV that you plan to move to your new home (which the agent will need to know about so as to advise buyers).
- Duties and obligations of seller and real estate agent. Your agreement will spell out how the real estate agent will list or market your house, what type of insurance you must maintain on the property, and what disclosures you must make.
Making Real Estate Disclosures in Ohio
State law (Ohio Revised Code Section 5302.30) requires that Ohio sellers provide buyers a disclosure form, which includes "material matters relating to the physical condition of the property" within the seller's knowledge.
Disclosures must be on a Residential Property Disclosure form established by the Ohio Department of Commerce. The form covers such concerns as:
- defects in the water supply, electrical, plumbing, drainage, and other house systems
- malfunctioning appliances
- presence of wood-destroying insects such as termites
- presence of underground storage tanks or hazardous materials such as radon and asbestos
- zoning or other code violations
- boundary line encroachments or disputes
- homeowners’ association rules or fees (if the property is within a community-organization governed development), and
- "other known material defects."
Buyers may have a legal right to cancel the purchase contract after receiving the disclosure form.
In addition to state disclosure rules, if your house was built before 1978, you must comply with federal Title X disclosures regarding lead-based paint and hazards. See the lead disclosure section of the EPA’s website, for details.
What Goes Into Ohio Offers, Counteroffers, and Purchase Agreements
A buyer who wants to purchase a particular Ohio home will make the seller a written offer specifying the price, proposed down payment, and other terms, such as any contingencies (conditions that must be met for the deal to close, such as the buyers’ arranging financing, selling their current house, and obtaining a home inspection with satisfactory results).
You may reject an offer outright, accept it as, or (as is more typical) respond with a counteroffer. A counteroffer accepts some or most of the offer terms, but suggests changes to others, such as a higher price or a closing date that’s sooner than the buyer proposed.
A legally binding contract is formed when you accept the buyer's final signed offer (agreeing to any changes from the original offer) and notify the buyer of its acceptance. Then the transaction goes into what’s called “escrow.”
What Is Escrow?
Escrow is the time period between signing the purchase agreement and closing on the house. You will choose an escrow or title agent, who is a neutral third party, to serve as intermediary and supervise the process. (This might include preparing title reports in advance of obtaining title insurance.)
The buyer typically has a lot more to do during this time period than the seller. By the close of escrow, the buyer will need to finalize financing, remove all buyer contingencies, have the house appraised (typically required by mortgage lenders), and get title insurance—usually under set deadlines.
As the seller, you will need to cooperate with things like scheduling inspections and the appraisal. And if you added contingencies to the contract that benefit you, such as a condition that you find another house to buy, you'll need to get busy on those, too.
Issues often come up during escrow that require negotiating, such as who will pay for repairing problems identified in an inspection report. The buyer may insist that you pay to remedy a defect or lower the purchase price. If you cannot reach agreement, the buyer may have the right to back out of the deal.
What Happens at the Closing of Your Ohio Home
By the close of escrow (known as the closing or settlement), you and the buyer should have fulfilled all the terms of your purchase agreement. At the closing itself (sometimes a meeting of the parties, other times conducted in separate locations and even on separate days), all final documents and funds will be exchanged between buyer and seller.
The buyer will pay you the purchase price, and you'll give the buyer a deed and other transfer documents and clear title to the house or condo. You'll pay off any outstanding loans on your property and pay commissions to the real estate agents (per your listing agreement).
Sellers do not usually need to be present at an Ohio closing. Typically, the buyers will sign the final documents at the office of their title company or escrow agent and pick up the keys. The escrow agent will record the new deed in the buyer's name at a local government office, and the home is officially theirs.
Working With a Lawyer
Unlike some states, Ohio does not require that sellers involve a lawyer in the house-selling transaction. You may choose to work with an attorney—for example if you want a lawyer’s help drafting a lease agreement if you plan to rent the home back for an extended period of time after the house closing, or if problems show up on the title report such as a lien on your property.