The Paperwork Every FSBO Home Seller Needs to Organize
Whether you’re selling your home on your own or with the help of a real estate agent, there’s tons of paperwork involved. After all, it’s the biggest sale in most people’s lives. Read on to learn more about the documents you need, where to get them and frequently asked questions about how to sell your house yourself.
Where can I find the right paperwork to sell my home?
Before you start having showings on your home, you’ll need to line up all of the necessary paperwork. Different states have different regulations. What may be relevant in one state may not be applicable in another so be sure to thoroughly research the requirements in your state. You can check your state and county government websites and fill in any cracks with information that can be found on the sites of your state land title association and local real estate agent associations.
If you need some help, a real estate attorney can provide this information for you and might take on your home sale at this point for a flat fee. You can also check out these “do-it yourself real estate forms & guides” to get access to attorney prepared, state specific information that you can instantly download and start using.
What documents do I need to sell my home?
While this varies by state, some examples of documents you may need to sell your home are:
Property survey – This is a legal document that shows the buyer the boundaries of your property. It also includes other details such as where any fences, driveways or other structures are located. This is typically ordered by the buyer.
Receipts and warranties – This information will help you document any new appliances, finishes and upgrades to your home.
Plans and permits – If you did any additions or upgrades, be sure to have the plans and/or permits handy.
Certificates of occupancy – This document shows that your home is compliant with municipal building codes and is safe to inhabit. As a seller, you’ll have to get this from your municipality, have the permit pulled, have the inspection done, do the repairs (if applicable) and then have your home re-inspected.
Loan documents – This typically includes the first mortgage, second mortgage, and any home equity lines of credit.
Latest utility bills – This shows buyers the amount your household has paid for electricity, water and/or gas each month.
Latest property tax bill – This gives buyers an idea of what will pay in taxes should they purchase your home.
Title – This shows that you own a legal or equitable interest in the home.
Proof of homeowner’s insurance – To close on your home, the buyer will need to show that they have insurance to cover the property the moment the transaction closes.
Homeowners’ association covenants and agreements – This will show buyers the rules that were established by the body that governs your neighborhood or condominium. This can include information about parking, pets, noise levels and more.
Floor plan or blueprints, if available – This gives buyers more insight into the layout and size of each room in your home. One way to stand out to buyers is to play up anything about your home that may be historically significant such as a framed blueprint or a newspaper article about the home.
Once you have all of your documents gathered, be sure to have at least two copies on hand for anything that pertains to the house or your ownership of the house. This way they’re available to potential buyers to inspect when they visit your home.
Why do I need a disclosure statement?
Before any potential buyer visits your home, you’ll want to make sure you complete a disclosure statement and have copies available when you show your home or hold an open house. Required by most states, the disclosure outlines key defects or dangers about the property. This might include, but is not limited to, radon, structural problems, flooding, mold, lead paint, asbestos and other potentially problematic conditions.
Disclosure typically comes in the form of boilerplate documents (put together by the local or state Realtor association), where the seller is responsible for answering a series of yes/no questions detailing their home and their experience in it. You should be able to download a disclosure statement form for free from your state Realtor’s association.
It’s only fair that the buyer knows about such problems before making an offer. At the same time, a thorough and truthful disclosure statement protects you from post-sale claims by the buyer that he didn’t know about defects in the house.
What should be included in a Real Estate Contract?
Nothing is more critical to your home sale than preparing and executing a proper legal agreement between you and the buyer. This contract between the buyer and seller outlines the terms of the agreement and should include:
Property and its characteristics – This includes the type of property (condo, single family home, multi-unit) address, lot size, parking, property identification number, etc.
Identity of the parties involved – This is typically the buyer and seller
List of fixtures/personal property – This outlines what is included in the purchase price
Purchase price – The agreed upon price you are selling your home for.
Earnest money amount and financing terms – This outlines the money paid to confirm the contract and details on the buyer’s financing.
Target closing date – This is the date when you and the buyer intend for your home sale to have occurred.
Contingencies – Examples of this include attorney review, inspection provisions, and/or a home sale/close contingency.
Prorations – This makes it clear what the seller and buyer owe on items such as taxes, assessments, and utilities.
Title – The particulars of what type of title clearance the seller is obligated to provide should be documented.
Closing costs – It’s important to outline which party bears the responsibility of paying for which closing costs.
Notice or default legalese – This outlines what happens if a party is in breach of the contract.
Miscellaneous provisions – This should detail any provisions the parties agree on.
Before that first offer comes in, be sure you’re prepared. If you can’t give the buyer the proper documents or be able to fill out a contract on the spot, your offer could fall through completely.
Are there closing costs on homes for sale by owner?
There will always be some sort of fee for you as the seller, even if you’re not using a real estate agent. The good news is that almost everything in a FSBO transaction is negotiable, though. Something else to keep in mind is that closing costs will vary, sometimes quite a bit, by state. Some common examples of closing costs you can expect are a deed transfer tax, excise tax, and document preparation. Sometimes you may also need to pay for the owner’s title policy as well.
If you want to ensure your home sale goes smoothly, you’ll need to be absolutely sure you have all of the required paperwork and documents to sell your home in order. If you need more guidance, check out our packages for home sellers. We’re here to help!