With all the things that you need to get ready for when selling your home, the legal aspect of it can easily get pushed aside. While it is important for your sale to spend time getting your house ready for potential buyers to view, making sure the legal side of the sale is also handled is just as important. Neglecting the legal side of a sale cannot only effect the amount of the sales price you receive at closing, but also provide reasons for the buyer to void the deal all together.
Here are some legal elements to consider when selling your home.
Take Care of Debts and Liens
There are a number of ways that an encumbrance or lien can end up on your property, including: civil court judgements, missing child support payments, unpaid debts, neglecting to pay homeowners association dues, or federal, state or local tax liens. Before you list your house for sale you should take the time to check if there are any liens on your property. Buyers will have a title search completed and if they find anything during the search they could walk away from the deal altogether. If they decide to go through with the deal you will have the dollar amount required to remove the lien taken from your part of the sale proceeds during closing.
Agreement from Join Tenants
If joint tenants own the property then all of the parties have to come to an agreement on how to proceed before selling your home. This is a common situation when siblings inherit property from a deceased parent or when a married couple is in the process of divorce. While it can be tricky to get multiple parties to agree to terms such as asking price and division of profit, it is much faster and easier than working through the legal system. It will take the signature of each party on the deed to transfer the title to a new owner at closing.
Use a Home Sale Agreement
Unmarried domestic partners have things a little harder. The United States courts do not recognize this relationship and therefore extra documentation is required. Prior to meeting with a real estate agent sit down together to establish the terms of the deal. This becomes even more important if only one partner is listed on the deed. Decide on the details of the asking price and how the funds will be divided after any outstanding mortgages are settled. This may feel slightly unnecessary, but it is a good way to make sure that both parties are on the same page. Getting expectations out on the table before the house sells is the best way to prevent problems later on during the process.
When you have all the details worked out you can have a real estate attorney put together a home sale agreement for you. This agreement will include the specific terms of how the funds are being split and what each party will be responsible for.
The final step in your legal consideration is to gather your important documents: deed, any documents regarding liens or judgements, surveys, appraisals, receipts of major repairs or additions, and any separate agreements that you have created. You don’t want to be caught off guard when it comes to legal matters. With this information in hand you will be on your way to having a smooth real estate transaction when selling your home.