Whether you're moving from a small condo or a large family home, selling residential real estate in Virginia is a task with legal ramifications. Although the steps involved in selling a home are similar regardless of where you live, Virginia's real estate laws and practices are unique in some respects.
Becoming familiar with the process early will help you avoid problems later. Here’s an overview of the basics—from engaging a real estate agent to making disclosures about the home's condition to closing the deal.
Working With a Real Estate Agent
Most people selling their home in Virginia work with a licensed real estate broker or agent. A good agent will help prepare and price your house, effectively market it to prospective buyers, review house purchase offers, and negotiate with the buyers who've made an offer (or more literally, their agents) up through the closing.
Before signing up with any agent, get references from other home sellers and check customer reviews on sites such as Realtor.com or Zillow. Double check their license status on the Virginia Department of Professional and Occupational Regulation License Lookup.
Signing a Listing Agreement in Virginia
Once you find a real estate agent you wish to work with, you’ll sign a “listing agreement,” giving the agent the right to market and handle the sale. Your agent will likely use a standard form created by the state or local Realtor association, such as the Virginia Association of Realtors.
Listing agreements typically cover:
- Commission that you (the seller) will pay. This customarily ranges from 5-6% of the house sales price, to be split between your real estate agent and the buyer’s agent. If you've seen headlines suggesting that lawsuits have imposed a change on this basic fee structure, you're half right. Despite hype about a shakeup, however, no major change has been mandated or taken place.
- Type of listing. Under the typical agreement, you will grant the agent an exclusive right to sell, which obligates you to pay a commission 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. You can always renew after that if the house is unsold and the agent remains interested in continuing on.
- List price of home. Your agent will recommend the appropriate selling price, by both comparing prices of similar homes (“comps”) recently sold in your immediate area, and based on experience with how local list prices best bring about high selling prices. To educate yourself as to whether the agent is recommending an appropriate price, the National Association of Realtors’ website has prices of houses currently on the market, and websites such as Zillow provide data on actual amounts paid in completed sales.
- Items included or not included in the sale. You might, or example, plan to leave behind a built-in dishwasher, which then becomes part of the property that the agent is contracted to sell. Or, you might want to exclude a washing machine, which you plan to move to your new home, in which case the agent needs to know that fact and convey it to prospective buyers. (If possible, you'll avoid potential negotiation issues by moving whatever you'd like to take with you before prospective buyers see the place, and replacing them if they're expected home fixtures.)
- 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 until it's sold, and what disclosures you must make to buyers.
Making Real Estate Disclosures in Virginia
Virginia seller disclosure requirements are more limited than in many states. Its main disclosure statute (Code of Virginia § 55-700) requires sellers to disclose very little, but to basically alert buyers that it is their responsibility to check out the condition of the property for sale. For details, see the disclosure notices created by the Virginia Department of Professional and Occupational Regulation.
There are, however, a few affirmative disclosures some sellers must make:
- if the property is in “any locality in which a military air installation is located” (Code of VA § 55-1.704)
- if the seller knows of any pending enforcement actions under Virginia's Uniform Statewide Building Code (§ 36-97 et seq.) that affect whether the property offers safe, decent, sanitary living conditions, or any pending violation of the local zoning ordinance that the homeowner has not abated or remedied (Code of VA § 55-1-706.)
- if a stormwater management facility is located on the property, and its long-term maintenance and inspection requirements (Code of VA § 55.1-708.1.)
- if the property was once the site of a meth lab and has not been cleaned up according to state guidelines (Code of VA § 55-1.708), and.
- effective January 1, 2022, if the structure is a "repetitive risk loss," meaning that two or more claims of more than $1,000 were paid by the National Flood Insurance Program within any rolling 10-year period since 1978. (Code of VA § 55.1-708.2.)
Also, home sellers must disclose if the property has a septic system needing repair but the owner has obtained a waiver from the Virginia Board of Health (Code of VA § 32.1-164.1:1). And, sellers “may” disclose the fact their property is in “a designated tourism activity zone” (Code of VA § 55-1.707).
Certain types of sales or transfers (such as of newly built homes or transfers between co-owners) are exempt from state disclosure rules. (Code of VA § 55-1-702.)
In addition, 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 Virginia Offers, Counteroffers, and Purchase Agreements
A buyer who wants to purchase a particular Virginia home will make the seller a written offer, specifying the price, proposed down payment, and other terms, including any contingencies (conditions that must be met in order for the sale to close). Common contingencies include the buyer being satisfied with the findings of a home inspection and successfully arranging loan financing or selling their current house.
You may reject an offer outright, accept it as, or (more typically) respond to a buyer’s offer 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 and sign the buyer's final signed offer (agreeing to any changes from the original offer), and notify the buyer of its acceptance.
The transaction will next go into what’s called “escrow.”
What Is Escrow?
Escrow is the time period between signing the purchase agreement and closing on the house. You and the buyer will agree on an escrow or title agent, that is, a neutral third party to serve as intermediary and supervise the process (perhaps preparing title reports, as well as monitoring the processing of the loan, the removal of contingencies, and other practical or scheduling matters).
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 contingencies, have the house appraised (typically required by mortgage lenders), and get title insurance—usually under set deadlines.
If, however, you included any contingencies of your own in the contract; for example, that the closing be conditioned on you having found another house to buy; you will need to get to work on these, as well.
Issues often come up during escrow that require negotiating, such as who will pay for repair problems identified in an inspection report. The buyer might insist that you either 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 Virginia Home
By the close of escrow, 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 or virtually), 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).
Sellers do not usually need to be present at a Virginia 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 company will record the new deed in the buyers' name at a local government office, and the home is officially the buyer's.
Working With a Lawyer
Unlike in some states, Virginia does not require that sellers involve a lawyer in the house-selling transaction.
Even if it’s not required, you might decide to engage a lawyer at some point in the process—for example, to review the final contract or to assist with closing details. Or, you might 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.
If you are selling your home without a real estate agent (a “for sale by owner” or FSBO), it might be useful to hire an attorney to help with the legal paperwork.