For individuals looking to buy or sell property with the help of a real estate agent, making sure the necessary legal forms are completed is generally not a concern. It is agent's job to help ensure that all the proper steps are taken to make the property transition as smooth as possible.
Unfortunately, real estate agents are pricey, and in this housing market homeowners are looking for any way to cut back on overall net cost of putting a house on the market and make the most from their investment. This means that more and more buyers and sellers are wading into the real estate market unassisted.
DIY home buying and selling can pay off big in the end, but navigating through the legal obstacle course can be a challenge. Read below to review a checklist of legal documents you need to complete before buying or selling a property.
A sales contract is the legal document which specifies and binds the agreement between the buyer and seller. Sample contracts can be obtained, but traditional sales contracts include the final purchase price, as well as any contingencies allowing the deal to be nullified, such as a failed home inspection or a buyer who is unable to find financing. Both the buyer and seller must sign the contract to make it legal.
Sellers must fill out, sign, and submit a disclosure form before finalizing the sale of their property. A property disclosure is where the seller lists all of the defects of the property as honestly as possible. Failure to provide a complete list of property defects can result in a lawsuit where the seller is held liable.
Occupancy agreements are responsible for defining the date the seller must move out, and when the buyer is permitted to move in. If the buyer is moving into the property prior to the finalization of the deal, or if the seller is occupying the property after the deal is confirmed, then separate pre-occupancy and post-occupancy documents must be completed.
Lead Paint Record
If a property was built before 1978, under federal law the seller must submit a lead paint hazard form. The form must contain a lead paint warning, statement that the seller has fulfilled all lead paint legal requirements, and an acknowledgment that the buyer received a pamphlet (approved by the EPA) on the dangers of lead paint poisoning. Both the buyer and seller must sign and date the document as well.
Offer and Counter Offer Forms
Sellers have the option of giving the buyer an offer form to fill out when bidding on the property. The seller, in turn, can either submit a counter offer form to the buyer, or sign and approve the buyers offer. These forms aren't necessary, but can prevent future misunderstandings.
Third-Party Financing Addendum
If the buyer intends to take out a mortgage to finance the purchase of the property, then a third-party addendum will be required. This document allows for the deal to be terminated if the buyer is unable to receive financing in a specified amount of time.
For properties that are members of a homeowner's association, a couple additional documents will need to be filled out and submitted: a resale certificate, and an addendum transferring over the membership fees of the homeowner's association. In most states, failure to provide the buyer with association information can result in termination of the deal at the seller's expense.
The job of a title company in a property sale is to schedule and prepare for the sale closing, and handle the transfer of funds. If a buyer or seller decides to hire a title service to oversee the sale, make sure the necessary documents are included in the deal.
Real Estate Attorneys
Deciding to put your property up for sale by owner, or buying a property from a seller without an agent, can be financially beneficial to both parties involved. However, it also means there is an increased risk of failing to complete the complicated legal procedure of transferring property.
If you need help discerning the paperwork involved in buying or selling a property, defining an agreement between you and the buyer/seller, or have questions regarding the legal procedure of transferring ownership of a property, then consider consulting a qualified real estate attorney.
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