Selling your home without a real estate agent is a pretty simple process…at least until you get a buyer and move on to the closing process. That’s when things can get a little bit more complicated. However, you don’t need to be put off by this final step. You just need to assemble a good team to assist you, start early to alleviate the stress at the last minute, and make sure that you get all of the necessary paperwork together as soon as possible.
Closing a Home Sale
Unless you’ve inherited your home, you’ve been to a house closing when you purchased your existing home, so you know a little bit about what to expect. However, then you were the buyer; now you’re the seller, which is a much more active role. In fact, the average home sale requires 180 sheets of paper. What are all of these forms? We’ll give you a brief overview of the steps you need to take from contract to closing on your “for sale by owner” house sale.
What Now After You Accept a Bid on Your Home?
The good news is that you’ve accepted a bid on your home and the sale is imminent. The challenge is that you have to get everything ready for the sale to close and be legal. To help you navigate through it all, here’s a summary of the close process:
1. Sales contracts are complex legal documents. You don’t want to leave anything to chance. This is where you may need to hire a professional Realtor with a Flat Fee Real Estate Company like GoToFSBO.com to assist with preparing the offer. If you are not a Realtor or an Attorney, you should hire a professional for this part to be sure all is done correctly. Some states require that the paperwork needed to sell a home be completed by a licensed attorney. Even if you’re not required to hire an attorney, it might still be a good idea. You want the home buyer to feel comfortable and confident that the largest purchase of their life is being handled professionally and not by a home seller. Not only will it save you time, but it will ensure that your sale isn’t held up due to faulty paperwork. Start early and find someone who you are comfortable with and who can quickly produce documents you’ll need following offer acceptance.
2. Arrange for a home inspection. Another thing you need to do between accepting the offer and closing on the sale is to complete a home inspection. The inspection report will be included in the closing documents. Who pays for this inspection was likely a part of the terms of the home sale. If you didn’t address this in your negotiations, then the buyer in the state of Virginia usually assumes the cost of the home inspection. The termite, well and septic (if you have a well and septic) are negotiated to be completed by home buyer or home seller. If the inspection uncovers major issues, you’ll need to address them with the buyer. Things like asbestos, lead paint, extensive mold and/or termite infestations, old roofs, old or failing appliances & heat/ac systems will need to be addressed before the closing. Small defects that don’t pose a danger, like chipped paint or loose cupboard doors, don’t have to be fixed and are usually left for the buyer to deal with after the sale is completed.
3. Arrange for a title company and escrow agent. In most cases, your title company will also be your escrow agent. This company orders the title, prepares the owner’s and lender’s title insurance, and handles the distribution of funds to the seller, the auditor’s office of the county for property taxes, and any other fees mentioned in the sales agreement. They will hold funds they receive ahead of the closing, such as a down payment, in escrow until the close is finalized.
4. Have the property appraised. This is required if the buyer is financing the purchase as the lender wants to know that his or her bank or lending institution isn’t paying more than the fair market value for the home. Usually the lender will order the appraisal from a licensed appraiser.
Documents Necessary for a Real Estate Closing
Every house closing is somewhat unique, but the majority of residential property closings require the following documents:
1. Title to the home. This document is necessary to prove that you own the home you are selling. If you have paid off your home (e.g. don’t have a mortgage), you’ll also need the deed.
2. Property tax documents. You’ll need your most recent tax bills, so that the buyer knows what to expect and so that the title company can transfer funds to the county auditor’s office. Taxes are usually paid a half-year ahead.
3. Appraisal report.
3. Inspections and Termite reports.
4. Loan documents. The title company will handle getting the loan documents for the buyer. However, you’ll need your ask title company if they will order mortgage documents (if you still owe money on your home) or if you need to, so that the title company can transfer the money necessary to pay off your loan.
5. Property survey, if requested. Usually the buyer’s lender will require that the property be surveyed so that they and the new owner know exactly where the property lines are and that the size of the lot matches with the sales agreement.
6. HOA/POA/Condo Documents – if you live in an homeowner’s association, the seller will need to order the documents for the new buyer.
Close Paperwork Assistance Available for FSBO Sellers
Selling your home by yourself all the way through the closing doesn’t have to be a scary or stressful process. If you find you need assistance, For Sale By Owner of Virginia can help with close paperwork preparation and guidance. Contact Deb Kent today at 540-582-5777 for more information.