Federal, state and local laws require sellers to disclose to prospective buyers any information that materially affects the property's value or desirability. This includes:

• Physical condition -- overall structural integrity of the home, including roof, foundation, electrical system, plumbing, sewer, insulation, etc.
• Health, safety and environmental hazards -- compliance with disclosure laws pertaining to asbestos, lead-based paints, radon, effects from natural disasters like floods, tornadoes and earthquakes, etc.
• Legal condition -- status of pending lawsuits, compliance with local building and zoning codes.

Buyers and their agents will request disclosure statements before they make an offer. Ask your real estate agent or attorney for the appropriate forms for your city and state.

The main parts of a purchase offer are:

• Proposed offer price
• A breakdown of what is to be included in the sale (i.e., appliances, furniture, window treatments, fixtures)
• Contingencies or terms that the sale is dependent on, i.e., secured financing, a satisfactory home inspection, the sale of the buyer's current home
• Provisions for disclosures of any defects that would affect the property value
• Seller concessions -- if the seller will be paying part or all of the buyer's closing costs; typically 3 percent or 6 percent of the price
• Earnest money amount -- a deposit toward the down payment, typically 1 percent of the price
• Proposed closing date
• Expiry date -- typically 24-48 hours after the offer is made

Selling your home is inherently an emotional experience. Learn to detach yourself from the sale and look at offers as business proposals, rather than personal attacks on your home. If a buyer tells your agent that your pale pink bathroom looks like it's from 1972 and thus submitted an offer below your asking price, don't take it personally. Consider offering an allowance to update it if the buyer gives you full price.

You can accept an offer, reject it or write a counteroffer. Any change to an offer is considered a counteroffer (See Step 5). A purchase agreement is not binding until you and the buyer accept and sign it.

In a buyer's market, look at each offer as an opportunity to negotiate. If a buyer made an effort to submit an offer, then he/she is interested. Even if you get a ridiculously low offer, or lowball, don't rip it to shreds right away. Figure out what the buyer really wants and make a counteroffer.

If you expect to get multiple offers, set up a formal offer presentation period and process, in which buyers and their agents must submit their offers within a certain time frame. This will give you enough time to advertise and show your home to as many potential buyers as possible. If a bidding war ensues, evaluate each buyer and compare the price, terms and conditions of each offer.

Avoid conflicts of interest as a result of dual agency.

Look for these traits of serious buyers:

• Creditworthiness -- Look for a preapproval letter from a lender that shows the buyer can secure funding in the amount of your asking price or more. This proves the buyer is ready, willing and able to buy. A large earnest money deposit also shows the buyer is committed to making a deal.
• Motivated -- Find out why the buyer is looking for a new home. Is it because of a job transfer or growing family? Is he/she under a time crunch? Motivated buyers may ask for a speedy closing (30 days or less), suggest an "all-cash" transaction or offer to buy the house "as is." Don't waste your time with a buyer who's just testing the market.
• Genuine -- A sincere buyer has researched the comps to determine your home's fair market value and is not simply trying to get a steal. If the offer is less than your asking price, it should still be within range. Some buyers will even include an explanation of how they came up with their offer price.

A contingency is a condition in the offer that if not met allows the buyer to 1) walk away and receive a refund of the earnest money, or 2) renegotiate with the seller until both parties agree on terms. The most common contingencies are:

• Financial -- The buyer must secure a loan for a specified percentage of the negotiated offer price.
• Appraisal -- The appraised value on the house must meet or exceed the negotiated offer price. Lenders require a professional appraisal of the home before approving a buyer's loan.
• Inspection -- The house must pass any professional inspections the buyer requests, including those for the overall condition of the home, the roof, structural engineering, termites and other pests, radon or mold. The professional home inspector works for the buyer, not the seller. During the inspection, he or she will identify issues that may negatively affect the value of the home or could pose potential problems for the buyer. The inspector will prepare a detailed report and offer recommendations on items that require repair.
• Repairs -- The seller must repair any damage or issues discovered in the home inspections up to a specified amount.
• Attorney -- The contract must be approved by a real estate attorney.
• Sale -- The buyer's current home must be sold first.
• Closing Costs -- The seller must pay for all or part of the closing costs. As a first-time buyer, don't be afraid to ask for help. This saves you out-of-pocket expenses.

An offer is more than just price. Make sure you review the buyer's requested terms and conditions. A full price may not be worth it if you have to jump through several hoops to get it.

If the buyer's offer is contingent on selling a home, counter with a Removal of Sale Contingency. This means that if you get another offer, you'll give the buyer 72 hours to remove their contingency or you'll kick out their offer. If the buyer removes the contingency, he/she will be required to buy the home under the remaining terms.

Consider these counteroffer tips:

• If you won't budge on price, offer financial incentives that don't require cash out of your pocket:
  • Pay for part or all of the buyer's closing costs
  • Pay for some or all of the repairs found during the property inspections
  • Pay points to lower the buyer's interest rate
  • Prepay taxes or insurance for a year
  • Offer to include furniture, appliances, window treatments or lighting fixtures
• If you're worried you won't be able to buy a home after you sell, include a "rent back" clause which lets you rent back your home from the buyers after escrow closes.
• Make a full-price counteroffer, if your comps can back it up.
• Make the sale contingent on your buying a home.

The negotiating process may involve several rounds of counteroffers. Remember that all terms are negotiable, including who pays for the professional inspections, corrective work and closing costs. Once both parties are happy with the terms, you'll sign the contract. Consider hiring a real estate attorney to review it. Fees range from $500 to $1,500.

Don't forget to:

• Agree on a closing date based on when the buyer's funds come through.
• Agree on a move-in date for the buyer that gives you ample time to move out.
• Get a receipt for the buyer's earnest money deposit.
• Decide whether repairs should be done before or after close of escrow.

Even if you've accepted an offer, continue to take back-up offers. You're committed to sell to the first buyer, but if the deal falls through, you'll at least have another buyer in place.

No matter how bad things get, keep your sale in perspective. If a deal falls through, let it go. There are plenty of buyers in the sea.

No one wants to be stuck with two mortgages. Depending on your market, you're better off selling your current home before you close on your next home purchase. Try these tips:

• Don't go house hunting until you list your current home for sale.
• Don't make an offer to buy another home until your sale is under contract and well into the escrow process.
• Make your purchase offer contingent to the sale of your current home.

While you and the buyer are working to meet the conditions of the contract, a neutral third party (an attorney, title company or escrow firm) handles all the funds and documents related to the sale. This is called escrow. The escrow officer:

• Orders a title search, which shows who legally owns the property
• Requests payoff information for your mortgage and other liens on the home
• Prepares and records documents, including the grant deed which transfers ownership of the home from you to the buyer
• Holds and disburses funds, such as paying off your mortgage with the buyer's loan
• Prepares closing statements

If the buyer included an appraisal contingency, a professional appraiser licensed by the state will come to your home and calculate its fair market value. The appraisal is a detailed report that includes information about the property and its location, comparisons with three similar properties, an evaluation of the local market and notes on issues that may negatively affect the property's value.

• Clean and prepare the house the day before the appraiser arrives.
• The buyer pays for the appraisal so you are not entitled to see it.
• The appraiser should be an objective third party who has no financial interest in or connection to the transaction.
• If you receive a low appraisal or the buyer cancels the contract based on the appraisal, consult with your agent or attorney.

If the buyer included an inspection contingency, a professional home inspector will check the condition of your home to make sure it is structurally sound and looks for issues that can potentially become costly disasters.

• A typical inspection covers all major mechanical systems, structural integrity, cosmetic features and other aspects of the house. Buyers may also request separate inspections for mold, radon, asbestos or termites and other pests.
• Clean and prepare the house the day before the inspector arrives.
• Make sure the inspector has access to the attic, basement and any crawl spaces.
• Request a copy of the inspection report if the buyer requests repairs.
• Negotiate terms of repairs found in the inspection.

If all goes well, ask the buyer to release the contingencies. Before the closing date, ask your escrow officer for a copy of the estimated closing statement. Review it to make sure your credits and debits are accurate. Question anything that is unclear or incorrect.

The buyer's final walk-through inspection takes place a day or two before the closing date. All repairs and specific requests should be fulfilled by this date. Clean and prepare the home to ensure it's in the condition the buyer expects.

At closing, the escrow officer will explain the legal documents, ask you and the buyer to sign them, disburse all funds and officially close escrow. Review your final closing statement and keep a copy for when you prepare your income tax return.

Congratulations, you've sold your home!

In your contract, you should have specified a date and time when you'll deliver the property keys to the buyer. That may be the day escrow closes, the day after escrow closes or after a seller rent-back, if you end up having to do that.

A rent-back agreement allows you to rent back your home for the amount the buyer must pay for principal and interest on their mortgage and any property taxes and insurance. This amount is prorated on a per-day basis from the close of escrow until you vacate the property.

For tips on planning a smooth transition into your new home, read FrontDoor's Moving Guide. And refer to this handy checklist.

Don't forget to report the sale of your home on federal and state tax forms.