Selling your home on your own is a difficult task. First, you must determine a realistic price. Then you must compete against professional real estate marketers to attract potential buyers and buyers' agents. Once you find a buyer, you’ll have to navigate a complicated transaction by negotiating the terms of your sale and following real estate laws and procedures as you move toward closing. A successful closing depends on knowing which legal and business forms to use and how best to use them.
Mortgage Preapproval or Proof of Funds
An important part of evaluating an offer is screening the buyer by assessing his ability to pay for your home. A mortgage preapproval isn’t a guarantee that he he’ll be able to get a loan, but it gives a good indication that he’s creditworthy. For a cash deal, you can request proof that the buyer has the funds to cover the purchase price. The proof can be recent bank or investment statements.
A seller's disclosure form makes it easier for sellers to make all the disclosures the law requires them to make regarding the condition of the house. The more detailed the disclosure, the less likely it is that the buyer can hold the seller responsible for maintenance issues down the road. The disclosure should include information about all the maintenance issues that have arisen since the seller has owned the home and how they were resolved. Include the entire structure of the home and all of its systems and appliances, if appliances will be included in the sale. Also make note of any additions to or renovations of the original structure and whether you obtained building permits and had the work inspected. Finally, make note of standing water or flooding, whether the water was in the yard or in the home itself.
Agreement of Sale
The agreement of sale is the sales contract that establishes a binding agreement between you and your buyer. It's the means by which you promise to transfer ownership of your home to the buyer in exchange for the buyer paying you the purchase price. A properly written, properly executed contract is vital. Not only does it safeguard your transaction by specify what needs to be done and when, it also gives you legal protection by limiting your liabilities.
Attorney Review Addendum
An attorney review addendum is an addition to the agreement of sale that gives you and the buyer the right to have your attorneys review the agreement before it becomes binding. Attorney review is important for a seller who isn't working with a real estate broker. The attorney will explain the terms of the contract to you and inform you of the terms' consequences. If the review leaves you unwilling to move forward with the sale, you can renegotiate the agreement, or even terminate it with no consequence other than returning the buyer's deposit.
Seller's Reply to Inspections
The buyer's inspections are likely to turn up repair issues. When they do, the inspectors and the buyer's agent will advise the buyer to request that you resolve the problems. The seller's reply to inspections is the form you'll use to communicate what you're willing and unwilling to do. Although the law may not require that you use the reply form, doing so helps you avoid errors and misunderstandings by outlining your options and giving you an appropriate framework in which to respond.
If your home is in a planned community, you'll have to give the buyer a resale certificate. The certificate lists your homeowner's association rules and regulations and explains restrictions, covenants and assessments. Associations charge a fee for preparing the certificate. The seller is responsible for the fee, and for ordering and delivering the certificate according to the timeline state or local law mandates