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So, you decided to sell your home yourself and secured a verbal agreement with a potential Buyer. You shook hands and agree on the Purchase Price and the relevant terms. What do you do now?

There are three general phases for most sales of residential real estate.

  1. Codify the Relevant Terms in a Written Agreement.
  2. Purchase Title Insurance and Satisfy Contingencies.
  3. Sign the Deed and Any Mortgage Paperwork.

Let’s examine each step in more detail.

  1. Codify the Relevant Terms in a Written Agreement.

To ensure all the terms verbally agreed to are legally binding, draft and sign a legal contract. The most common contract is a Residential Offer to Purchase. There are slightly different variations if you are not selling residential land (e.g. farm land, vacant land, condominium, etc.).

The Offer to Purchase, once signed, controls the sale moving forward, including when the property is required to be sold, whether the sale is contingent on the sale of another property, whether a mortgage is required, whether an inspection needs to be done, and so on.

Protect yourself before you sign such an agreement by carefully reviewing the Offer or having a trained professional represent you. Doing so can save you future headaches in the event the real estate sale does not end up closing.

  1. Purchase Title Insurance and Satisfy Contingencies.

Once an Offer to Purchase has been signed by all the parties, the next step is to order title insurance. Ordering title insurance is often a Seller’s expense and will, ideally, protect Seller in the event the title to the property turns out to have a defect or is invalid. This is especially important because a title defect may not be discovered until many years after the sale of the property closes.

Once title insurance has been ordered, both parties will need to work together to ensure completion of all the remaining requirements listed in the Offer to Purchase. This may consist in ordering an appraisal on the property, securing necessary financing, bringing in a qualified inspector to view the property, and more.

As the necessary contingencies are satisfied, always stay within the deadline dates listed in the Offer to Purchase. Failure to meet a deadline could lead the deal to fall apart!

  1. Sign the Deed and Any Mortgage Paperwork.

The final step in any real estate sale, after satisfying the contingencies in the Offer, is signing the necessary closing documents. If the Buyer is taking out a mortgage, they generally have more documents to sign. As a Seller, the common documents consist of a Warranty Deed, a Closing Statement, an Affidavit by Owner, and potentially a 1099-S Tax Reporting Form. Closely review all of these documents, whether as Buyer or Seller, to ensure everything aligns with your wishes.

Understanding how a typical residential real estate transaction proceeds can be a great benefit before entering into a sale.

If you ever have questions about the real estate process, contact our office. We are well-versed in real estate sales and can take the burden off you and protect your legal rights!

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