Selling a property is a document-intensive transaction. In fact, the average property sale requires approximately 180 sheets of reports, contracts, forms, and statements. For a worry-free and legally airtight sale, you'll need to come up with the following 12 key documents.
Compiling and signing real estate documentation can feel like an onerous task for both buyers and sellers of property. However, understanding your property document obligations in advance is often one of the best ways to secure a quick and stress-free sale. Remember, state and county regulations will apply when determining the necessary documentation required for a property sale. If you aren't sure what documents you need, try consulting the property laws for your district or consider contacting a local real estate agent.
The amount of documentation required from sellers will depend on several different factors, including local regulations, whether the property was a personal residence or rental home, and long-term renovation activity. To help differentiate the 12 key documents for sellers, we have categorized them according to 4 specific stages of the purchase process: prior to listing, while on the market, after receiving an offer, and closing negotiations.
Prior to Listing
Original Sale Contract
Sellers are required to provide prospective buyers with a copy of the original sale contract signed between the current and previous owners of the property. The original sale contract should include the previous purchase price for the property, the disclosures made at the time of sale, and any contingencies to the deed transfer.
Records of Home Repairs and Maintenance
Buyers will likely request evidence of recent renovations and repairs. When compiling a record of home repairs and maintenance, sellers should include before and after photos, material receipts, and labor contracts.
Comparative Market Analysis (CMA) Report
A CMA report is created by your real estate agent to help calculate a suggested listing price for your property. CMA reports analyze local property market trends, focusing on historic and ongoing sales data for similar properties.
Listing and Marketing Contract
The listing and marketing contract defines the arrangement between the seller and real estate agent, granting the agent the exclusive right to sell and market the property.
While on the Market
Preliminary Home Title Report
Sellers will need to request a preliminary home title report to determine the outstanding financial or legal obligations on their property. These obligations include taxes owed, local covenant restrictions, and any title insurance requirements. Sellers can purchase a title report from one of the major title companies, such as Old Republic, Stewart, First America, or Fidelity.
Mandatory Disclosure Statement
After prospective buyers agree to a purchase price, the seller must disclose any known issues or hazards affecting the property. Common mandatory disclosures include previous cases of water damage, usage of lead-based paint, toxic material levels, or homeowners association rules.
After Receiving an Offer
Purchase Offer Form
A purchase offer form lays out an initial framework for the final purchase contract between the buyer and seller. The purchase offer is not an end-of-contract document and its terms are subject to revision or amendment. The form lists the price offered by the buyer, a brief description of the property, and the listing information provided at the time of sale.
Contingency Removal Form
Contingencies are a type of clause in purchase offer forms or final sale agreements. In order to finalize the contract, the buyer or seller will need to meet the requirement of any contingency clauses. When the contingency is met, both the seller and buyer record the process on the contingency removal form.
If a buyer is purchasing your property with external financing, the lender will hire a property appraiser to evaluate the market value of your home. If the appraised price is under the offered price, your real estate agent will enter negotiations with the buyer's lending institution.
Home Inspection Report
After delivering an offer, buyers will hire a professional home inspector to evaluate your property for structural defects, pests infestations, hazardous materials, and cosmetic damage. The findings from the inspection are compiled in the home inspection report and delivered to the buyer. If the buyer is alerted to undisclosed or undiscovered issues with the property, they will pursue additional price or repair negotiations with the seller.
Final Real Estate Purchase Agreement
The final real estate purchase agreement is a contract between the buyer and seller that dictates the final conditions of the property transaction. The terms in the final sale agreement include the purchase price, the closing date, and any final contingencies.
The execution of the sale deed is the final step in the property transaction process. The deed is drafted to the evidence and the terms of the final sale agreement and signed on non-judicial stamp paper. Once executed, the deed transfers legal ownership of a property from the seller to the buyer.
Feeling Overwhelmed? Connect with a Local Real Estate Agent!
For homeowners in the early stages of planning a property sale, it's easy to feel overwhelmed by the sheer amount of paperwork required from both seller and buyer. If you're confused by the legal and financial jargon, it might be time to reach out to an experienced real estate agent. A good seller's agent will provide full-service support and guidance throughout the entire transaction, from clarifying documentation requirements to breaking down and settling points of disagreement. If you sell through a Clever Partner Agent, you can also benefit from flat fee or low commission costs.