There are many layers of paperwork involved in the sale of real property, from
the listing agreement, seller
disclosures, to the final sales contract,
which may also include additional addendums
or contingencies.
As your listing agent, MSLNow can assist you in filling out all of the
necessary forms, and even draft a customized sales contract (or purchasing
agreement) to your specifications, while arranging for various inspections.
All of these services can be retained on a flat-fee basis. (Please see
“Rent an Agent”)
To download sample real estate contracts visit our
partner web site at:
http://www.uslegalforms.com/
Some Important Documents:
Listing Agreement - See previous section.
Click
here.
Seller's Disclosure Statement. By law, you are required to disclose
any material defect about your property which may bear on the decision of
whether or not to purchase the property by a potential buyer. Seller must sign
and give a copy of Seller Disclosure statement to the Buyer which in turn must
be signed by the Buyer and attached to the Sales Contract. Please click here to
view a sample
disclosure statement form.
Fair Housing Law - The Federal Housing laws
prohibit discrimination in a wide array of real estate practices, including
housing sale and rental, provision of homeowner's insurance and mortgage
lending. The Fair Housing Act identifies seven classes protected by the law: race,
color, national origin, religion, sex, familial status and disability.
State and local laws, (e.g. D.C.) often extend these protected classes to include
such characteristics as sexual preference, age, political affiliation, and even
student status. Check with your local fair housing or human rights
advocacy organization to find out what classes are locally protected in your
area. Click here to read more about it:
http://www.fairhousing.com/101/federal_laws.htm
Lead Based Paint Disclosure: Click here to view
a sample lead-based disclosure form. lead-disclosure.pdf
Sales Contract: A
sales contract exists when all terms, including
changes, are ratified by the initials of all the principals (i.e., all owners
and buyers). When the contingencies
are satisfied, the contract becomes enforceable. Click
here to view a sample sales contract: va-sales-contract.pdf.
An Offer and Counter-Offers- When a potential buyer is ready to purchase your property either
the Buyer or the buyer's Agent will present a signed sales contract by the
Buyer, usually with a deposit, to the seller. The initial presentation of
the offer is usually in the form of a written sales contract. Once signed by you
becomes a ratified contract and further changes must be mutually agreed upon by
both parties in writing. Any changes you make to the initial offer and send back
to the prospective buyer is called a counter-offer.
Always keep in mind that, once the contract is signed, it
becomes a binding legal document for the transaction. A description of the offer
will include, but is not necessarily limited to:
-
Date, name and address of the buyer and seller, and the
legal description of the property.
-
Amount of earnest money deposit,
which will be held in an escrow account by an
attorney, or broker, unless otherwise noted.
-
Sales price.
-
Size of down payment, and how
the remainder of purchase price is to be financed. The offer should indicate
the maximum interest rate the buyer is willing to pay, and the right to
cancel without penalty if such financing proves unavailable.
-
Proposed settlement
date and occupancy date, and daily rent provision for
“post-settlement occupancy,” if the seller cannot vacate and becomes the
temporary tenant of the buyer.
-
Contingencies, if any,
such as satisfactory review by attorney, structural inspection, appraisal,
or sale of the buyer’s current home.
-
Other
important provisions, including a list of items that convey
with the sale, stipulation that title must be insured, and who is to
pay various settlement costs.
At the
stage of processing the final paperwork of the sales transaction, all contingencies
must be satisfied and eliminated. The buyer will select a settlement and/or a
title company, and you will need to work with them directly and to provide them with the vital
information such as your loan pay-off information, etc.
A
number of real-estate-oriented professionals come into play during the
home-selling process, particularly after an initial sales agreement has been
signed, including: a home inspector (as
usually requested by the buyer) termite
inspector, appraiser (as usually requested by the buyer’s
lender), and attorneys (representing
the seller and the buyer, respectively). Very
often, a mortgage approval can be made at the time of application, subject to
verification of the information provided. However,
as a back-up plan, just in case the buyer’s financing falls through, the
seller should continue to keep the property in showable condition.
Here
are some other things to keep in mind as you are nearing the completion of the
home selling process:
-
Termite Inspection - A
termite inspection is required by most lenders, and is usually specified in
the sales contract (although it’s not usually a requirement for hi-rise
condos). Occasionally, existing
coverage may be in effect that might make such an inspection unnecessary.
The seller is generally responsible for payment of the inspection,
removal of any infestation if required, and the repair of any damage if
needed.
-
The
Buyer’s Loan Approval - You
need to keep yourself informed about the buyer’s loan approval progress,
either through direct communication with the buyer, or through the buyer’s
agent. With every contract, the
seller should require the buyer to supply a pre-qualification
letter. Additionally, most contracts require the buyer to make a loan
application immediately after contract ratification (usually within 7
days), and to obtain a final approval letter (usually within 30- 45 days).
-
Appraisal - Upon receipt of any information requested, and the
completed appraisal, the lender issues final
approval of the mortgage application.
VA, FHA, and some conventional lenders may specify requirements that
must be met before the loan will be made, such as major repairs.
When the loan is approved, a commitment is issued to
the buyer. Many contracts
require a loan commitment from the lender within a specified period of time.
After Loan Approval
After the buyer receives written loan approval, the seller and
the buyer’s agent (or buyer) will coordinate a settlement
date. You will need to
confirm the date, place, and time with the buyer, and you should prepare a
checklist of everything you need to bring to settlement. You should also notify utility companies
to transfer accounts. With a scheduled settlement date, the home seller can begin
to make his/her own definite moving plans.
Unless otherwise provided for in the contract, the buyer takes possession of the
property at the time of settlement. The
seller should make plans to clean, remove trash, and vacate at least one day
prior to settlement, or, at the very latest, no later than the settlement day.
All appliances should be in good working
order in time for the buyer’s final walk-through
inspection (see below).
Click
here to read more...settlement process
