Basics of Selling a Home
It’s not just a question of setting a price, finding a good agent, and keeping the place clean when it’s going to be shown. The law impacts every state of the proceeding—you can help yourself by knowing your rights.
What legal papers should I have before putting my home on the market?
Real estate law requires many documents. Before you sell your home, make sure you have these documents on hand:
- a plat or survey of your property
- either a deed or your mortgage agreement
- the most recent real estate tax bill
- condominium documents, if your home is a condominium
- homeowner association rules and fee schedule (if applicable)
Do I need a real estate agent? An attorney?
You'll have to decide whether to use a real estate agent or market your home yourself. An agent will generally charge you around six percent of the purchase price when your home is sold. You can find a reputable real estate agent through a professional organization.
Whether or not you decide to market the home yourself, contact an attorney before you sign a listing agreement or receive an offer. Also, make sure you understand and comply with disclosure laws in your state, as well as federal and state fair housing laws.
Legally, what is an offer?
As a general rule, if someone calls you on the phone and offers to buy your home, that is not a legal offer. An offer is usually a written document that becomes the contract of sale if you accept it. Therefore, it is important that it covers all the essential details of the sale. An offer should include:
- purchase price
- the down payment amount
- desired closing and possession dates
- an indication of whether or not the buyer is applying for a mortgage and the terms of the mortgage
- an accurate listing of items included in the sale such as appliances, curtains, and fixtures
A buyer may include an inspection clause that cancels the contract if the building fails to pass a professional inspection covering:
- radon gas
- structural soundness
- electrical systems
The buyer pays for most inspections, although many states require the seller to pay for a termite inspection.
Have your attorney review the offer before you respond to it. An offer may signal the beginning of negotiations on price, possession date and other details of the sale.
The buyer's down payment is deposited in an escrow account until the deal is completed.
What’s usually in the contract of sale?
After you have negotiated the sale, the terms of your contract will be clear. A contract is an agreement between two parties stating who does what and who gets what. It can contain anything legal that both parties agree to.
There are certain standard items that should appear in most contracts. They are:
- the date
- full names of the parties involved
- the address of the property being sold
- the full amount of the purchase price
- the escrow amount, where it will be deposited and who gets the interest
- the date and place of the closing and possession
- exactly what is included in the sale
- who will pay closing costs
- the amount of the real estate agent's commission
What Happens at the closing?
It's time to get your money. You have a right to receive a copy of the estimated closing costs two days before closing. Have your attorney check it for accuracy.
Check with the closing agent at the title company before the closing date to be sure all necessary paperwork has been done.
Your real estate agent will be at the closing to collect her or his commission check from the closing agent.
If you have a mortgage, your mortgage will be paid off and you will receive a check for the remainder of the selling price, minus the listing agent's commission and any other costs you agreed to pay.
Where can I get more information?
Your local public library can be a good source of helpful, free information. Various nonprofit agencies, such as Better Business Bureau offices, can help you get more information on your legal rights and obligations in buying and selling a home. Look in your local telephone directory for the BBB office nearest to you.