Selling a home in today’s economic conditions is a challenge. Here are some “smart" tips for you to consider once you have a potential Buyer ready to move forward:
- Offer to Purchase: Although not often explained to a buyer, this “binder" may have full legal force and hold you to a deal. Make sure to have it reviewed by your attorney and that it contains the words, “memorandum of understanding only – purchase and sale to be signed by all parties within seven days; failing which the offer to purchase will become null and void." Signing the offer may remove your home from the multiple listings or put it in a “holding" designation so make sure you or your broker has “prequalified the buyer."
Review the contingencies contained in the offer such as building, mortgage, Compliance with Title V (septic), and the sale of their existing home, etc. Look to have short time periods on these.
Purchase and Sale: Although it says standard, it is not. There are legal terms and clauses in it that are routinely modified and negotiated by attorneys with riders and addendums. Your attorney or the broker will prepare the Purchase and Sale and send it to the Buyer’s attorney for review. This is the key document regarding the parties’ rights and responsibilities. Have an attorney review the document. Your real estate broker’s job is to sell the home, not perform any legal functions. This is not an area to save money. If there is a betterment on your property (sewer), you will normally be required to pay off the balance of the lien which could be substantial, unless otherwise agreed to by the Buyer and the Lender.
Inspections and Preliminary Title: This part of the process allows for the Buyer’s inspections. It has become fairly common for the Buyer to renegotiate price based on an inspection report. You would also be asked to respond to a high radon reading. Know if you have any easements, conservation issues, survey issues, title V (septic issues), or zoning issues that may prevent the Buyer from using the property for single family use.
Have your attorney do an owner run down of title. This will confirm the owner of the property; identify any easements, restrictions, grants, conveyances, surprise liens and water heater rental liens. It might also reveal any technical defects of mortgage discharges, assignments of mortgages, missing certificates of compliance, probate issues, death certificates, estate tax clearances, etc. Although this is not a full title search, it may give you a head start in correcting title issues which otherwise may prevent closing.
Lender Issues: Be prepared to provide certain information to the Lender’s attorney such as mortgage information, forwarding address, social security numbers, etc. The lender’s attorney is required to prepare and file IRS documents and to obtain information from your lender, the tax collector, sewer, utilities, etc. to prepare for closing.
Deed Preparation: A new deed will need to be prepared. Your attorney or the closing attorney will prepare it for a fee. Double check the description on your present deed. If there have been any changes to the description during your period of ownership, let the attorney know.
Closing: Try to review at least the settlement statement prior to the closing. These are traditionally not available until very near the closing due to late arriving information. Since you are not familiar with the form and some of the costs, you should have someone review it for you. At closing, you will be presented with 10 to 20 documents to sign. Also, you should or you should have your attorney review the plot plan to see if it conforms to your understanding of the location, size and shape of the lot and the deed. Bring your driver’s licenses for identification purposes.
Your proceeds will not be available until the deed is recorded and the funds from the lender are in the conveyance account of the Lender’s attorney.
Post closing: Look for copies of your documents and remember to report the sale to your accountant for next year’s tax return.