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Considerations Before Selling a House in Indiana

By Marcia Stewart, Co-Author of Nolo's Essential Guide to Buying Your First Home and Every Landlord's Legal Guide
Find out key issues involved with selling a house in Indiana.

Selling a house can be complicated, especially if you try to go it alone (without a real estate agent). Although the basic rules and processes steps involved in selling a home are similar across the country, Indiana's real estate laws and practices are unique in some respects. Becoming familiar with state and local requirements and practices early will help you avoid legal problems later.

Here’s an overview of the basics of selling your home in the Hoosier State—from working with a real estate agent to making legally-required disclosures to going through escrow.

Why Work With a Real Estate Agent

Home sellers in Indiana typically work with a licensed real estate broker or agent. A good real estate agent will help price your house, based on the current value of similar homes in your area (this is called a comparative market analysis, or comps); effectively market your house to ready, willing, and able buyers; and handle other tasks, such as reviewing house purchase documents and negotiating with buyers.

Before signing a listing agreement (discussed below) with any agent, get references from other home sellers and check online customer reviews on websites such as Zillow and Trulia. You can find licensed Indiana real estate agents at the Indiana Professional Licensing Agency’s Licensee Info Search.

Signing a Listing Agreement in Indiana.

Once you choose a real estate agent, you’ll sign a “listing agreement” giving the agent the right to handle the sale of your house. Most real estate agents use standard forms created by their state Realtor association, such as the Indiana Association of Realtors.

Listing agreements typically cover the following terms.

  • The real estate agent commission that you (the seller) will pay. The typical commission is five or six percent of the house sales price, and is split between your agent and the buyer’s real estate agent.
  • The type of listing. Most listing 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 (you agree to pay a commission to whichever agent brings in a buyer), or an exclusive agency listing (in this case, your agent is the only agent you authorize to sell your house, but you agree to 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 60 or 90 days.
  • Listing price. Your agent will recommend the appropriate selling price by comparing prices of similar homes (“comps”) that have been listed in your immediate area, and data found in a Multiple Listing Service (MLS). To get a sense of whether the agent is recommending an appropriate price, check out the National Association of Realtors’ website which has information on prices of houses currently on the market. Websites such as Zillow and Trulia provide data on actual sales prices. See the Nolo article, Listing Your House: What List Price Should You Set? For more details.
  • Items included or not included in the sale. For example, you may plan to leave behind a refrigerator (which is therefore part of the property that the agent is contracted to sell), but exclude a freestanding dishwasher that you want to keep.
  • Duties and obligations of seller and real estate agent. Your agreement will cover issues such as how the agent will market your house, what disclosures you must make, and what your respective responsibilities are.

Making Real Estate Disclosures in Indiana

State law in Indiana (Indiana Code Sections 32-21-5-1 and 32-21-5-7) requires that sellers provide buyers a disclosure form, which includes details on the property, including:

  • contents, such as a built-in vacuum system
  • defects in the contents and systems, such as a malfunctioning garage door opener or fireplace, a leaky roof, or foundation problems
  • hazardous conditions, such as radon gas or asbestos
  • homeowners’ association restrictions, and
  • other specified details of the property, such as alterations to the house made without a building permit.

Disclosures must be on a Seller’s Residential Real Estate Sales Disclosure form established by the Indiana Real Estate Commission.

If your house was built before 1978, you must also comply with federal Title X disclosures regarding lead-based paint and hazards. See the lead disclosure section of the EPA’s website, for details.

Your failure to disclose known defects or to make other required disclosures can expose you to a lawsuit from the buyer.

What Goes Into Indiana Offers, Counteroffers, and Purchase Agreements

A buyer who wants to purchase a particular Indiana home will make the seller a written offer, specifying the price, proposed down payment, and any contingencies, such as a satisfactory inspection report or arranging financing. (See the Nolo article Contingencies to Include in Your House Purchase Contract for details).

You may reject an offer outright, accept it as, or (as is most typical) give the buyer a counteroffer, accepting some or most of the offer terms, but suggesting changes to others, such as a higher price.

A legally binding contract, typically called a purchase agreement, is formed when you accept a final offer (agreeing to any changes from the original offer), and notify the buyer of its acceptance. Your agreement will contain key terms of the sale, such as the agreed-upon price, contingencies, financing terms, dispute resolution, and closing date. Once you and the buyer both sign the purchase agreement, the transaction will go into what’s called “escrow.”

What Is Escrow?

Escrow is the time period between when you sign the purchase agreement and close on the house. You will choose a neutral third party (an escrow or title agent) to serve as intermediary and supervise the process (preparing title reports, processing loans, and removing buyer contingencies).

The buyer will typically have a lot more to do during this time period than you will. By the close of escrow, the buyer will need to finalize financing, remove all contingencies, have the house appraised (typically required by mortgage lenders), and get title insurance—usually under set deadlines. You may need to negotiate with the buyer on different issues during the escrow period, such as who will pay for repair problems identified in an inspection report. The buyer may insist that you either pay to remedy a defect or lower the purchase price. If you cannot reach an acceptable agreement, the buyer may have the right to back out of the deal.

What Happens at the Closing of Your Indiana 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), all final documents and funds will be exchanged between buyer and seller. The buyer pays you the purchase price, and you give the buyer a deed and other transfer documents and clear title to the house or condo. You pay off any outstanding loans on your property and pay commissions to the real estate agents (per your listing agreement).

The closing normally takes place on one day, though it’s possible to go over several days.

Sellers do not usually need to be present at an Indiana closing so long as all costs are paid and documents are signed. Typically, the buyers will sign the final documents at the office of their title company or escrow agent and pick up the keys. Then the buyers will record the new deed their name at a local government office, and the home is officially theirs.

For more details, see Escrow and Closing in Buying or Selling a Home. You’ll also find useful information on Sandy Gadow’s website, Buying, Selling, and Closing Simplified, which includes a state-by-state guide to closing practices.

Working With a Lawyer

Unlike some states, Indiana does not require that sellers involve a lawyer in the house-selling transaction. Even if it’s not required, you may decide to engage a lawyer at some point in the process—for example, to review the final contract or to assist with closing details. A lawyer’s help will also be useful if problems show up on the title report such as a lien on your property. People who sell their homes without a real estate agent ( “for sale by owner” or FSBO), find it especially valuable to work with an attorney.

Check out Nolo’s Lawyer Directory, to find an experienced real estate attorney in Indiana.

More Information on Selling a House

The Selling a House section on Nolo.com includes a variety of useful articles on all aspects of the house selling process, including marketing strategies and tax issues.

For detailed information on every phase of selling a home, from marketing to closing, see Selling Your House: Nolo’s Essential Guide, by Ilona Bray.

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