Selling a property can be quite an intimidating procedure, to begin with. The lengthy documentation attached to the entire process makes it an even more extensive and cumbersome procedure. On average, it has been estimated that a document requires a total of 180 pieces of paper which include various reports, forms, and contracts!
If you are new to this entire procedure, then there is a chance that you will find it all even more frightful. So, what would be the best approach to follow in these circumstances? You could either spend every last cell in your brain to gather all those 180 sheets of paper or you could follow our guide to come up with the 12 key documents that are required to make your real estate transaction hassle-free.
Before we proceed, let us make it clear that every state/country has its own set of rules/policies regarding property documentation. Therefore, before compiling any document, you must check with your attorney or your real estate agent. Our article gives an insight into the most relevant documents that any country/state would require you to have if you plan to sell your property.
Before Listing Your Home
#1. Original Sales Contract
An Original Sales Contract is the contract that you received when you made the purchase of the house with the previous owner. This is the final purchase agreement you received back when you bought the house. It includes the entire transaction procedure along with the previous purchase price, the agreements made during that time along with the contingency agreements made to transfer the deed.
#2. Home Repair & Maintenance Records
In most cases, the buyer will request the records of any maintenance or repair that took place while you were living in the house. Moreover, sellers are required to keep pictorial evidence of the house as it was when they received it and afterward along with material and labor receipts.
To further ensure transparency with your buyer, you must let them know of any damages and treatments that your house has undergone. Most likely you will also need to provide information regarding the insurance of the house along with details of all the claims which were made to the house during your stay.
To Launch Home Sale in the Market
#3. A Comparative Market Analysis Report
A Comparative Market Analysis Report (CMA) is structured in order to estimate the worth of the house according to the trends in the area. This data will most likely be collected by your real estate agent who will carefully analyze it to deduce the worth of your house. Generating the right CMA report is extremely important before you put your house up for sale.
#4. Listing Contract
The next document that you need to have before you launch your home in the market is the listing agreement. This agreement is basically a contract between you and your agent. The document outlines that your real estate agent is entitled to sell the house within the time allotted by you.
The listing agreement includes photos, graphics, and videos along with a description. The real estate company, that you are involved with, uses this information to attract buyers. This document forms the basis of all future agreements made between you and the real estate agent.
On the Market
#5. Preliminary Title Report/Preliminary Home Title Report
This report is inclusive of all the details regarding the finances and the legal issues related to the house. It also accounts for any outstanding dues that are on the property. The dues/obligations refer to taxes, local restriction and other insurance requirements. A title reports needs to be purchased from a title company.
#6. Mandatory Disclosures
Once the buyer has agreed to purchase the house at the asking price, the next step is to disclose the mandatory issues that are affecting the property. Selling a property is a sensitive matter, make sure you are thorough and transparent. The buyer must be aware of any issues that the house may have. Failure to do so may result in a law-suit on your name.
Once Offer Received
#7. Purchase Offer and Counter Offer
You have received an offer after putting your house on the market. Now what? The next step would be to present your potential buyer with a purchase offer. The purchase offer made right now is the basis of the purchase agreement that you will outline in the future. It is inclusive of the list of prices that you have offered to the buyer along with a description of the house and the listing information.
#8. Final Purchase Agreement
Once both the parties settle with the final price, the attorneys from both the parties draft a Final Purchase Agreement. This contract includes the price amount along with the terms and conditions of purchase and the closing date along with the contingencies taken care of.
#9. Appraisal Form
This report/form is compiled in case the buyer is purchasing through an external financer. In this situation, the person lending the money will take the help of a property appraisal to analyze the market value of the property. In case of any variations, expect there to be negotiations made regarding the price.
#10. Home Inspection Report
The buyer will most likely carry out an inspection at the property through a team of professionals. This inspection is to make sure that the house is free of defects, insect/pest infestations, and other damages.
#11. Final Purchase Agreement
If the inspection report is free of any issues/defects, a contract will be drawn in between the buyer and seller. This document is inclusive of the final purchase price (agreed on by both the buyer and seller) along with the date of closing and any final contingencies.
The final step of all property-based transactions is the Deed, also known as the Sale Deed. The Deed is the final document and is drafted on non-judicial stamp paper. Once the Deed is executed, it cannot be reversed. It is basically legal proof of transferring the ownership of the property from the buyer to the seller.
If you have all the twelve documents in the right order and format you are good to go. You can further streamline the documentation process by using any of the best pdf converters available online so that you can convert all your documents in one format for consistency. Good Luck!
This article has been contributed by Nouman Ali.