Realtors: When a house is sold, where does the money go initially?

Question

I'll try to make this short as I can. My neighbor bought a house down the street from me, but then her and her husband split up. She moved back to Scotland and he went off to do contract work out of U.S. The house has been empty for a few months. It's completely paid for, there is no mortgage or loan out on it. But it's in both of their names.

She asked me to find out how it works Stateside when a house is sold; does the money go to the agent who takes a cut and then passes the rest to the Seller? How and where does the money transfer before it gets to her. I've heard of an escrow account: what is that? Does the agent set that up?

She's leaning towards giving me power of attourney to help handle some of this. In this given situation I could really use a basic run-down on the best way to proceed that will benefit her the most.

Her and her ex are working out a deal that will hopefully sign it all over to her and do away with the joint ownership, but she will split profit.

* How do other people buy/sell houses when they are not in the country? How hard would it be for her to do all this from Scotland and not make me power of attourney?

*If you know of a website that gives a good description on how to sell a US home from outside the country and can provide a link to it (so I can forward it to her) that would be AMAZING... : ) Thanks SO much.

Answer 1

It would be best to direct them to an attorney or real estate agent to handle this manner. The house will need to be put on the market. The agent or someone from a title company should be able answer all their questions.

Answer 2

The proceeds of the sale are split up according to the contract for sale at the time of the closing by a title company, at least in this part of the country (Wisconsin). Depending on where you are in the US they use slightly different methods, but the key notion is that a trusted third party takes in all the documents, establishes the ownership and any liens or encumbrances owed on the property, and pays out the proceeds to each party entitled to a portion.

I believe your friend can participate in the sale via fax, but that is probably a question best answered by a title company who would be handling the closing.

In some parts of the country banks or attorneys do the closings, but here we use title companies most often.

Answer 3

I really don't know. I have seen many short sales and foreclosures sell below asking (although not much). My husband and I offered $1500 less on a short sale and were accepted, and $5000 less on a foreclosure and the bank wouldn't go more than $3000 less. Then, there was a foreclosure that was new, in excellent shape, listed for $96900 and sold for $117K! Unfortunately many short sales are priced at the bank's bottom line, so if it's a home you REALLY want then you'll often need to go over the asking (unless there is no competition - doesn't sound like your scenario at all). I think $12K over is a good offer, especially if the home is in good shape.

Answer 4

There are several web sites that answer your question. I went to Yahoo and searched on "home buying process" and several came up. This one looked good:

http://www.housebuyingprocess.com/

The culmination of the selling process is a closing or closing meeting. If all goes well, the buyers bring a check and all the papers are signed. If there's no mortgage to pay off, then most of the proceeds get sent to the seller, within 24 hours I would hope.

Answer 5

The big question is are they divorced? If not, they both have title and rights to the property equally. They really need to have an attorney handle the transaction and proceeds. It's nice that they trust you, but to keep yourself out of liability, an attorney would be an objective third party.

Why don't you help them find an attorney in the local area and have him/her handle this for them.

I'm afraid you would be getting yourself into a legal entanglement if you did any more than that.

Answer 6

Are you kidding with this? Go to a real estate agency, dear, or a real estate attorney. You should NOT be asking about power of attorney. That sounds really shady!