Understanding the Documentation Required to Sell a House

 

Organising the Legal Documents before you decide to Sell a House

Once you have decided to put your house on the market, get yourself prepared. There’s a long list of legal documents required to sell a house. They are critical at different stages in the sales process.

To avoid unwanted hiccups for an on-time closing, you should begin to pull together the legal documents required to sell a house the moment you decide to go ahead with the listing.

Compiling all the legal documents required to sell a house well in advance means you will have a smooth sailing towards a stress less sale closure.

So, let’s explore the key documents you’ll need at various stages of your house-selling expedition:

 

 

Documents to be arranged before listing:

When you’re ready to put your house on the market, consider having these documents ready to go:

1. The sales contract of the house you are selling from the time you purchased the house.
2. The appraisal while you purchased that home.
3. Your homeowners insurance policy and current statement.
4. Your mortgage payoff statement — Ask your lender to send you this document, which includes the amount you will need to pay off your mortgage (if you have one) during closing.
5. Homeowners association documentation — If your home is covered by an HOA, you’ll need to keep the Declaration of Covenants, Conditions and Restrictions, also known as CC&Rs handy. These explain the rights and obligations of the homeowners and your HOA.
6. Invoices pertaining to significant repairs and maintenance — Your buyer will want to know, for example, the last servicing dates for a roof overhaul or a central air service
7. Invoices for major changes you have made — These might include additions or extensive remodelling.
8. All current warranties for appliances and major works.
9. Property tax records
10. Recent utility bills (Best if you can provide for a year. You may not need them but might come handy for some purpose to the buyers.)

Keeping a track of all of these before you plunge to sell will make things smoother. If you are missing some, ask for the copies from the company or organization that issued them.

 

 

Homeowners association legal documents required to sell a house

Legal website NOLO has a list of HOA documents you’ll need to sell your home. These include:

1. Your HOA’s Covenants, Conditions, and Restrictions (CC&Rs) along with its bylaws, rules, and regulations
2. Unusual restrictions on homeowners. Does your HOA have rules about renting out your home, rooms or basement? Or does it restrict parking rights, pet ownership or anything else out?
3. The latest HOA financial statements — Is the association struggling to stay afloat (in which case it may soon need to collect more from homeowners) or is it in rude financial health?
4. How much you currently pay monthly for general fees and maintenance
5. “Special assessments” in the pipeline. Does the HOA plan to levy extraordinary charges beyond its monthly fees for large projects or emergency repairs?
6. Certificates from the HOA that any additions or improvements you’ve made to the home have had its approval, where necessary
7. The HOA’s master insurance policy

Again, if you never had or can’t find any of these documents, ask your HOA for copies.

 

 

Documents you need to work with your Agent before listing your property in the market.

In addition to above listed documents from your files, you’ll also acquire some new ones during the listing process. These include the following:

1. Your listing agreement. If you consider to sign up with a real estate agent or broker, you’ll get a copy of the listing agreement. This outlines the terms of your partnership with the agent.
2. Residential Seller’s Property Disclosure Statement (SPDS) — You’ll need to disclose any material facts known to you about the property and the same will be documented.
3. Your agent and broker will typically prepare a marketing plan that will document how and where will your home be marketed: open houses, viewings, listings on various high-traffic websites, etc.
4. The comparative market analysis (CMA) — The agent will provide you a CMA when advising you on the listing price. A CMA displays the prices of comparable homes in your neighborhood or area that are presently listed or in escrow, along with others that have recently been sold.
5. Your Seller’s Net Sheet — This itemizes all your selling expenses (including redeeming your mortgage, taxes, escrow fees and the agent’s commission) so that you can see how much are you actually getting by selling the house. Ask for an updated net sheet if the price you settle on differs from the one you originally listed at. Your net outflow or inflow will differ with these small changes.
6. A preliminary title report — They’re a shortcut to confirm your ownership of the home. The buyer will commission a full title search anyway but including one of these preliminary ones in your seller’s disclosure pack makes things look better.
7. Offer and counteroffer forms — Real estate agents create these documents when submitting an offer. And your agent can respond with a counteroffer form if you are not satisfied with the offers received.
8. Final Purchase and Sale Agreement — When you accept an offer, the terms of the deal are laid out in a contract. You may be asked to accept “contingencies.” Those allow the buyer to withdraw in certain specified circumstances
9. Contingency removal form — As contingencies are satisfied or fall away, these can be removed from the final purchase and sale agreement using these forms

 

 

Other considerations and documents after the offer have been accepted.

Assuming your buyer(s) need a mortgage, they’ll have to pay for an appraisal before their mortgage gets sanctioned. This shows the appraiser’s assessment of the property’s market value.

Smart buyers often commission home inspections to reassure themselves about the home’s condition. You could ask for copies of the appraisal and inspection report, although it’s ultimately at the discretion of the buyers whether they provide them.

Shortly before closing, you should receive an estimated closing statement. This lays out all the financial aspects of the transaction and estimates how much you stand to receive at closing.

 

 

Checklist required while you are attending the closing:

Concluding the sale will typically take place at the offices of the escrow agent, title agent, or attorney. And most sellers generally don’t need to bring much to closing.

On the day of the closing, here are the items you will need to bring to closing:

1. Take a government-issued photo ID along. You’ll need it along with a secondary form of identification such as your insurance card
2. Carry all the keys to the property.
3. Any outstanding paperwork sought by the escrow agent, title agent, or attorney
4. Any repairs that has been carried out as part of the transaction, bring all the associated paperwork, including receipts. Your buyer(s) should have done a walk-through of the home the day before to satisfy that everything’s in order. But you don’t want any last-minute hitches

 

 

Documents to receive from the Sale:

On closing or soon after, you’re likely to receive copies of:

1. The deed — This is the document that legally transfers ownership of the home to the new buyer.
2. The affidavit of title or seller’s affidavit — You sign this to confirm that you are the legal owner and have the right to transfer ownership.
3. Transfer tax declarations — This applies if you live where the state or local government levies a tax on real property transfers. It confirms the price received and states the tax payable
4. Final closing statement — This is unlikely to differ much from the estimated closing statement you recently received
5. Bill of sale — The deed transferred ownership of the home itself. This does the same for anything you agreed to leave in the home. That may include appliances, light fittings, furniture, etc.
   
   

There may be some more or fewer depending on your transaction details and the ruling state law.

 

 

Tips:

And if you think arranging all these is a mammoth task, a reliable real estate agent can be your co-pilot, ensuring you navigate each stage successfully.

 

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