- November 17, 2021
- Posted by: Saman Saba
- Category: FSBO
What is My Legal Responsibility When Selling My Home FSBO?
The time will come that your home doesn’t suit your needs anymore. Adding improvements is an option for some people, but the best course of action is selling the property.
Selling is a sensible choice for many people because the primary benefit is getting more money out of the equity of the property. However, selling your property has a major legal component to it, and a bulk of that is getting all of the correct documents to be eligible for selling your house.
What documents do you need to be able to sell your house? This article will tell you everything you need to know. Read on below to learn more.
Professional Appraisal on the Property
An appraisal is an unbiased assessment of the market value of your home. This determines how much mortgage will be lent to a buyer if they finance the property through a loan. If you want to push through with the sale, a new appraisal is beneficial to have as it can help justify the price.
Mortgage Statement
If you’re selling your property before the mortgage is paid in full, you must contact your lender and request a statement detailing your payoff amount.
The payoff amount is the total amount that you’ll need to pay to fulfill the terms of your mortgage, along with any interest you owe until the day you pay it back in full. Your lender is required by law to provide this payoff amount to you, so simply ask away.
By knowing this amount, you will be able to get a rough estimate of how much you stand to earn in the sale of the property.
Homeowners Manuals, Warranties, and Invoice for Repairs
When selling your property, it would be very helpful to have gathered all the manuals, and warranties for any major appliance or system within the property. This will be very beneficial to a prospective buyer.
Yet another homeowner document that is beneficial to be presented is a maintenance record and invoices for any repairs, which states the parts of your home that have received repairs, such as roof repairs or chimney cleaning.
Homeowners Association or Condo Association
If your property is part of a homeowners association (HOA) or condo association, there will be additional legal documents that must be provided to a prospective buyer. Be sure to reach out to your association to received clarity regarding the process in retrieving these documents along with when is the best time to do so as most of these documents are time sensitive and as such, you won’t want to request these documents until it is time to do so.
Listing Agreement or Retainer Agreement
If you do decide to work with an agent, you will need to sign a Listing agreement which highlights the terms of the work that the listing agent will provide to you. Alternatively, if you decide to forgo working with an agent, you will need to hire an attorney. An attorney will have you sign a Retainer Agreement with highlights the terms and responsibilities that they will provide to you.
Mandatory Disclosure Document
Once the buyer has agreed to do business with you, by law, you must disclose certain items and a lawsuit is very likely to happen if you8 don’t disclose certain information to them, such as:
- Asbestos
- Lead-based paint
- Environmental hazards
- Malfunctions of home utilities, systems, structures, and mechanical.
Property Tax Receipts
A property tax receipt is crucial because it helps calculate the cost of taxes on the property for the buyer when they decide to close the deal.
Seller’s Estimated Settlement Statement
This document is more commonly known as the closing statement. This shows how much money you’ll get after considering the closing costs and other transaction fees once you make the sale. Your agent, attorney, or the title company will be the one to generate the statement.
The Deed
The deed is a legal document that officially transfers the property ownership from the seller to the buyer. The details in the deed include proper identification of both parties and a description of the property itself.
1099-S Tax Form
The capital gains tax exclusion covers up to $250,000 of the net profit on your home’s sale, but it can go up to $500,000 if filed jointly. If you don’t qualify for the capital gains tax exclusion, you’ll need to report the taxes during the sale owed to the IRS when tax season comes around.
Conclusion
Selling your home is a long process, but it can be faster if you have all the correct documents. It’s not exactly as fast as meeting up with the buyer and exchanging handshakes, but it beats having to search everywhere in your home for the documents.
How Can We Help You?
If you are interested in selling as a For Sale By Owner, you’re in the right place. Get the legal assistance you need to sell your FSBO property. Saman Saba is a real estate attorney in Maryland working to empower real estate sellers and buyers so that they may make better and more informed decisions regarding one of their most important assets: their residential properties.
In an effort to help you successfully sell your property as a For Sale By Owner, we have prepared a FREE FSBO Success Packet which includes:
- A clear explanation of our flat-fee pricing model and exactly which services are included.
- A complimentary copy of Saman’s bestselling book, Sell Your Home With Confidence: Reduce Your Liability When Selling, FSBO EDITION which goes into depth regarding what steps a FSBO seller should take when selling their property.
- A complimentary viewing of a 30-minute Masterclass entitled, Home Equity Protection: How To Not Be Bamboozled When Selling which highlights the main ways that home sellers can leave thousands of dollars on the table when selling.
- And so much more!
Click here to access the FREE FSBO Success Packet.
Ready to get started? Click here to schedule a complimentary consultation.