What Paperwork Is Needed to Sell a House? (With or Without A Realtor)

Before selling a home, an owner needs to ensure he or she has the necessary documentation on hand. However, states have different requirements regarding this paperwork, and what is appropriate in one state may not be sufficient in another. An owner can determine which paperwork is needed by visiting local government websites, neighborhood real estate associations or by visiting the state land title association. In addition, a real estate attorney or agent may be of great help in determining which documents are required, which are beneficial, and which are not needed.

The Deed

A legal document filed with the county in which a property is located, the deed states who has ownership of the property. Often, this is the mortgage lender, but other persons or entities may be listed on this form. When the real estate is sold, the buyer signs the deed and the new ownership is recorded in the county.
Sellers need to have their deed easily accessible as this is the document used to transfer ownership of the property to the new buyer and/or his or her lender. An attorney handles the transfer of ownership and the new deed is presented to the buyer at the closing of the sale. There are numerous types of deeds that may be provided during the sale of a home.

Warranty deeds guarantee the seller maintains the right to sell the residence to a buyer, as the property is free of any liens and debt. Any debts that remain unsettled require compensation from the seller to the buyer. A special warranty deed may be used to guarantee the property only during the time period in which the seller owned the property. Anything that occurred before this time becomes the responsibility of the buyer, not the seller.

Quitclaim deeds are often used within families, such as during a divorce. This deed allows one person or party to transfer any property rights and claims they have to another person or party, often with no exchange of money. The grantee has no guarantee in this situation, and the authority and extent of the claim or interest to the property regarding the grantor are not specified.

A bargain and sale deed is used for a residential sale or the sale of a property seized by the court. What makes the deed differ from conventional deeds is there is no guarantee that the property is free and clear of liens. The buyer assumes the risk that the title isn’t free. In many ways this document is similar to a quitclaim deed, with the main difference being the property is sold here, as opposed to being relinquished.

Grant deeds transfer a person or entity’s interest in the real estate to a buyer in exchange for a price that has been previously set. The difference between this type of deed and a general warranty or special deed is there may be defects of title. Again, the buyer assumes the risk when this is the case. However, this type of deed is used to show the seller can dispose of the real estate legally free of debt.

Disclosure Form(s)

Any known defects to the property must be declared on this form. Certain states require a specific form be used, thus this needs to be discussed with a real estate agent or attorney. It is helpful to have this statement available when showing the home or hosting an open house. Items that may be shared on this form include structural issues, lead paint, asbestos, radon or mold. The seller simply answers a list of yes/no questions about the residence. While this form is helpful to the buyer when he or she makes an offer, the seller also finds it to be of benefit as it serves as protection after the sale if the buyer tries to claim they were unaware of one or more defects.

Homes built prior to 1978 may have lead paint in them. As a result, property owners much provide the buyer with a lead-paint based paint disclosure brochure. In addition, the buyer is required to sign a document stating they have received this brochure.

Mortgage Note

A real estate note, also known as a borrower’s note, a mortgage note or a real estate lien note, is nothing more than a promissory note that is secured by the real estate. The note is a promise made by the buyer to pay the sum of money borrowed along with interest at the set rate and term to fulfill his or her promise. This written document outlines the terms of the mortgage loan and makes the borrower accountable for the repayment of the funds. If a note remains on the property at the time of the sale, the seller must provide this paperwork.

Association Application and Approval

When a home is in a community with a homeowners’ association, the seller must gather papers related to the association. This includes information on the association rules and any governing documents, as well as a resale certificate. The certificate must provide information on the homeowners’ association, any fees specific to the property being sold with relation to membership in the association and information on the association itself. Furthermore, an addendum outlining any mandatory membership requirements must be included in the paperwork.

The Sales Contract

The purchase contract outlines the information regarding the property to be sold. This includes details of the current legal owners, the tax ID number of the property and the property’s legal description, which is often found on the deed. In addition, this contract provides information on the sale date, the time of inspection for the buyer, the price the residence is being sold at and when the buyer may take possession. As this document is legally binding and will be used to settle any disputes that arise, both the buyer and seller need to have it examined by a real estate attorney to ensure there are no issues before signing.

Property Tax and Homeowners Insurance

Property taxes are typically paid once a year. In the event the home is sold after the taxes have been paid, the buyer reimburses the seller for the taxes from the date of closing until the end of the year. This information must be presented at the time of closing to ensure the reimbursement takes place. This is necessary as the IRS allows property taxes to be deducted on your personal income tax forms.

In addition, sellers need to provide information on homeowners’ insurance coverage. Lenders often require this information before the funds will be provided, as this helps to protect both the lender and buyer if a catastrophe has caused damage to the property being sold. Have this information easily accessible to prevent delays during closing.

Title Search

Sellers must gather title documents before selling the home. These documents need to be ordered after a potential buyer has his or her loan approved by their preferred lender. The title search function to show the property title has no liens and therefore may be transferred to a new owner. Make certain to use a reputable company, as this company arranges the closing for all parties and handles the funds transfer at the time of closing.

Addendums

In the event a buyer is using a mortgage to finance the purchase of the home, a third-party financing addendum is needed. Another example of an addendum is a sales contract contingency clause, one that states the buyer must sell his or her home before the purchase of the new residence is finalized. In addition, a home inspection addendum is common with many residential sales. This document provides the buyer with a way to be released from the sale in the event the inspector finds major problems with the property being offered for sale.

A buyer may put in an addendum that states the seller must provide one year of home protection insurance to ensure no problems arise within the home, such as numerous major appliances failing that were included in the sale. Other addendums may outline which items remain in the home, such as the washer and dryer or refrigerator. Furthermore, an addendum may be used when the buyer requests the seller pay all or a portion of the closing costs associated with the sale. In the event a foreclosure is being purchased, the lender selling the property may require the buyer sign an “as-is” addendum stating he or she accepts the property in its current condition. This ensures the buyer is responsible for any repairs that are needed, and these are only examples of addendums that may be needed. There are others.

Offer and Counteroffer Forms

Negotiations often take place between a buyer and seller. When an offer is made by a buyer, the seller may choose to reject or modify this offer. This process goes back and forth until a price is agreed upon, and all negotiations of this type need to be put into writing. Doing so protects both parties as the sale goes forward and once it is complete. This form ensures that any changes made to the original contract are both legal and tight, thus this is a form that should never be ignored.

Lease Agreement

In the event the property is currently being rented, the lease agreement must be presented to the buyers at closing. At this time, share proof of any security deposit put down by the tenant. The buyer and seller then determine who will be responsible for refunding the deposit in the event the tenant fulfills the terms of the agreement.

Affidavits

Certain situations require affidavits be provided when selling a home. An affidavit is a legal document serving as a sworn statement. For example, a document of this type may be needed to show the seller does not have any liens on the property.

Riders

Riders may also be required when selling a home. This depends on the unique circumstances of the sale. When the seller will be remaining in the home for a period following closing of the sale, a rider provides this information in the legal documents. This document is often referred to as a pre- and post-occupancy agreement. The rider does nothing more than outline the specific rights of each party in the given situation.

Warranty Paperwork

Some homes have a warranty on them at the time of sale. Be sure to include this paperwork with other legal documents related to the sale so they may be provided to the buyer. The same is true of warranties on other items in the home, such as appliances, that are included in the sale and have a warranty remaining on them that can be transferred to the buyer. This helps to make the sale go smoothly at closing.

An Access to Premises Agreement

A buyer may wish to access the premises before closing to measure for drapes, rugs, new flooring or numerous other purposes. A document is required to ensure both parties agree on a date and time to access. Many sellers put a clause in this document which states the buyer is responsible for any damage done to the property during this visit, whether the damage is the result of actions taken by the buyer or parties entering the residence on his or her behalf. In addition, in the event someone is hurt during this visit, the document typically outlines who will be responsible in this situation. This protects the seller from unforeseen expenses prior to the sale and liability for any injuries incurred.

Additional Documents That May Be Needed

Additional documents may be required when selling a property, and a real estate agent or attorney can be of help in determining when they are required. This includes permits and plans for any work scheduled to be done to the home, utility bills and a survey outlining the boundaries of the property. Other items that may be provided when selling a home include occupation and/or construction permits and blueprints, if they are available.

Preparation is key when selling a home. No owner wants to discover they lost a sale simply because the correct documents were not available. If there is any doubt, include a document in the packet gathered for potential buyers. Although this may seem excessive, it is better to have too much rather than not enough at this time. Sellers who take this extra step will find it helps them immensely as the process moves forward.