Sellers checklist: All the documents you need to sell a house
Selling a house should be straightforward and simple. Unfortunately, it rarely isn’t, as you must complete several documents needed to sell a house.
If you’re ready to sell, here’s a checklist of all the necessary paperwork for a faster, smoother transaction.
Documents required prior to listing your home
Prepare the following documents before listing or advertising your house for sale:
- Original sales contract: This is the proof or record of your house purchase from the previous owner.
- A professional appraisal from the time you purchased your home: Aside from the old appraisal, you should also provide updated documents (if any) since the original appraisal.
- Mortgage statement: You need a mortgage statement from your lender or loan provider if you have an existing mortgage. It should state the payoff amount, which includes any/all interests that you also need to consider until your loan is fully paid. Knowing this would help you calculate your estimated home sale proceeds with greater accuracy.
- Homeowner’s insurance: To ensure transparency in your sale transaction and give the buyer an idea of the cost of homeowner’s insurance, you should provide documentation concerning any damages and subsequent repairs done on your home. Share proof of your homeowner’s insurance and any claims report (list of all claims) concerning your home from when you purchased it.
- HOA documents: If your property is part of a development, it’s highly likely you’re also a member of the homeowners’ association (HOA). If this is the case, be sure to present any information concerning terms or fees the buyer should know before committing to a sale. Make sure you provide copies of the articles of incorporation, rules and regulations, bylaws, HOA dues amount statements, etc.
- Home repair and maintenance records: Any work or improvements you’ve made to your home over the years are documented in your home repair and maintenance records. Relevant receipts and paperwork include maintenance receipts, utility maps, and capital improvement receipts (e.g., kitchen and bath remodels, major additions like roofing work and a swimming pool). However, take note that capital improvements only include any work done that has enhanced or increased your home value. It doesn’t include routine and necessary maintenance and repair work.
- Manuals and warranties: If appliances like the refrigerator, washer, dryer, and dishwasher will be part of the sale, make sure you provide the buyer the product manuals and warranties.
- Previous utility bills: You can also provide copies of past utility bills so the buyer has an idea of how much utilities could cost them on a monthly or annual basis.
Documents required to start selling your home
Before you officially start putting your home on the market, there a few other basic documents you should settle, including the following:
- Comparative market analysis: Your agent should be able to provide you comparative market data that includes a summary or compilation of recent or current home sales in your area. Doing so helps to ensure you come up with a feasible pricing strategy.
- Listing agreement: You need to sign a contract with your real estate agent that officially declares them to have exclusive rights to market and sell your property within a designated time frame. The contract also gives them the right to utilize any existing content related to marketing the property, including images, written descriptions, and other copyrightable materials.
- Marketing plan: The marketing plan embodies all the actions, strategies, or processes necessary to facilitate the sale of your home. This includes open houses, traditional and digital marketing strategies, and other promotions your agent will carry out.
- Seller’s net sheet: Your agent will fill out an organizational worksheet showing the amount you’ll net as the owner after their commission, taxes, escrow fees, and mortgage payment. Expect the amount to vary (every time a buyer makes an offer) as it will depend upon the timing of every offer, so it’s likely you’ll also receive more than one version of this document.
Documents to have on hand while your home is still on the market
While your property is still being advertised for sale and you’re receiving inquiries, you need to prepare the following documents:
- Preliminary title report: The preliminary title report or prelim provides information on your property, such as any taxes you need to pay for and any conditions or restrictions legally on record concerning your property. By having this report ready, you can provide an official document that you can use to inform your agent and any potential buyers.
- Mandatory disclosures: You need to follow mandatory disclosure laws to ensure a fair and transparent transaction. You must also report any hazardous elements in your property prior to the official sale. Such disclosures include information regarding the presence of asbestos, lead-based paint, water damage, environmental hazards, problems with the neighborhood, disputes concerning fencing or property lines, etc. Some states where caveat emptor operates may not require such disclosures. But if you want a clean, transparent transaction and not have to face legal issues later, make sure you let the buyer know about them.
- Pre-inspection report: Although optional, hiring a home inspector to provide a pre-inspection report gives you information on material defects in your property. You can either address these or inform the buyer about them in writing before they make an offer.
Documents required when you get an offer
While your property is on the market, you’re likely to receive several offers. Make sure you have these documents ready:
- Purchase offer and counteroffer forms: The purchase offer documents the initial amount or price you receive from a serious buyer. The counteroffers are then recorded to document any negotiations done between you and a buyer. When both of you come to an agreement, the purchase offer becomes a contract that both of you will sign. This document might still undergo amendments as you finalize the transaction.
- Purchase and sale agreement: The purchase and sale agreement is a legally drawn-up draft contract stating the sale price of the home, terms of purchase, amount of the earnest money, closing date, and any contingencies. This document is accomplished with the buyer’s and seller’s real estate agent/s and attorneys. Both you and the buyer must agree to the terms and sign the agreement before proceeding with the house sale.
Documents to receive before closing
At this stage of the sale process, you’ll also be on the receiving end of some documents.
- Home inspection report: It’s usually expected of the buyer to put a home inspection contingency in the contract. If they do, they’ll arrange to have an inspector check and assess the property prior to closing the deal. After the inspection work is done, the inspector drafts a detailed report that’s usually several pages long (including photos) documenting their findings.
- Home appraisal report: If the buyer requires financing to purchase your property, the loan provider would require an appraisal report. You’ll also get a copy of this in 30 days’ time. If the appraisal is lower than the offer you agreed upon with the buyer, you can expect your agent to let you know about it right away.
Documents required to finalize the deal
At this stage, you’re very close to finally being able to sell your property. To have a smooth transaction, make sure you’re ready with the following:
- Latest tax statement: You have to provide your most recent tax receipts so any outstanding property taxes can be calculated. Depending on the timing of the sale, your latest tax statement should tell you if there’s any tax you need to pay or if you’re supposed to get a refund.
- Closing statement: The seller’s estimated settlement or closing statement details the amount you’ll get after calculating for taxes, closing costs, and any other transaction fees related to the property sale. This document will be provided by the title company or closing agent.
- Property deed or deed of sale: This legal document officially transfers ownership of a property from the seller to the buyer. It specifies the identities of the seller and buyer and provides a detailed description of the property in question.
- 1099-S form: You need to find out if you qualify for capital gains tax exclusion. This should cover a maximum of $250,000 of the net profit on a home sale or as much as $500,000 when jointly filed. If you don’t qualify, you will need to file a 1099-S form. It serves as a report on any taxes owed to the IRS in the coming tax season from your property sale proceeds.
Selling your home is a lengthy, time-consuming process that requires several documents to process. To make it easier on you, always consult your real estate agent and a real estate attorney regarding the particulars of your property sale.
Also, make sure you work only with knowledgeable local agents to expertly guide you through the intricacies of a home sale.
If you’re selling your home in Rhode Island, contact RI Home Store today to experience a smooth, stress-free sale process.