Okay FSBO’s, were going to do a short clinic today on the kinds of paperwork that many of our first time sellers should get familiar with.
When selling a house, there is always a fair amount of legal documentation involved. As a buyer, there is a great deal more of paperwork to handle than the seller. When buying, you’re dealing with documents like affidavits, agency agreements, and mortgage agreements, not to mention all the lender paperwork that goes along with obtaining a mortgage. But if you’re selling a property from a For Sale by Owner point-of-view, you really only need to be aware of a singular important document: the Sales Contract.
The Sales Contract (or Offer to Purchase from the buyer) is the document that will address nearly 90% of the sales process. A standard contract is drafted to cover almost any aspect that selling a house could involve. It lists the property in question, the asking price and covers items such as warranties on the property, inspections, exclusions, arbitrations and insurance. Addendums, which are like additions to the contract, are also included to address specific issues within the selling of the property such as a 3rd party financing addendum and a lead based paint addendum which applies to houses built before a certain date. Amendments can also be made to the sales contract for particular repairs needed after inspections, as well as lease back forms should buyers need to move in prior to in the closing date.
Another helpful and usually required little piece of paperwork that sellers should familiarize themselves with is the Seller’s Disclosure Form. This form will list everything that is, and possibly could be, wrong with the property in question. Even though this is separate form, the need for the form is specified in the Sales Contract.
Keep in mind that sales contracts have different stipulations from state to state. Make sure you research any state specific requirements beforehand.
Once you have the Sales Contract in hand from the buyer, the majority of the paperwork now applies to the buyer. All the seller has to worry about is transferring the title of the property over to the buyer when closing. The title company will receive the Sales Contract and manage the closing process. It’s a common misconception that you need a real estate agent to interface with the title company regarding the closing documentation but the truth is that your title company is more than capable of handling all of the documents. In fact, title companies are your friends. They only get paid if the deal closes so they want to keep it on track as much as you do.
And once you’ve released that title, it’s time to reap the benefits!
Tags: FSBO paperwork, Sales Contract
