Understanding the Legal Documents Required to Sell a House

What are the legal documents required to sell a house?

Putting your house on the market is an exciting endeavor. However, there’s a long list of legal documents required to sell a house. And some of them are critical at different stages in the sales process.

If you want your sale to sail smoothly to an on-time closing, you should begin to pull together the legal documents required to sell a house even before you put that ‘For Sale’ sign up.

So, let’s explore the key documents you’ll need at various stages of your house-selling expedition:

In this article (Skip to...)

• Selling preparation
• What to gather before selling
• Documents required during listing
• Documents to expect when you get offers
• What to bring to closing
• The bottom line

What prep do homeowners need to do before selling?

As soon as you decide to sell, it’s advisable to start putting together the documents you’ll need during the listing process. Assuming you use one, your real estate agent and others may ask to see them at this point.

Your agent will greatly appreciate if you can get these documents ready in advance.

Compiling all the legal documents required to sell a house well in advance means you won’t be responsible for any unexpected hiccups in the sales process.

What documents should be gathered before listing?

When you’re ready to put your house on the market, consider having these documents ready to go:

1. The sales contract from when you bought the home you’re now selling
2. The appraisal from when you purchased that home
3. Your homeowners insurance policy and current statement
4. A mortgage payoff statement — Ask your lender to send you this document, which includes the amount you will need to pay off your mortgage (if you have one) during closing
5. Homeowners association documentation — If your home is covered by an HOA, you’ll need to dig out the Declaration of Covenants, Conditions and Restrictions, also known as CC&Rs. These explain the rights and obligations of the homeowners and your HOA.
6. Invoices covering significant repairs and maintenance — Your buyer will want to know, for example, the last servicing dates for a roof overhaul or a central air service
7. Invoices for major capital projects — These might include additions, extensive remodelings
8. All current warranties for appliances and major works
9. Property tax records and recent utility bills going back one year — You don’t absolutely need these but they can be helpful for buyers

Unless you have a great filing system, finding these may prove to be a little bit of a challenge. If you are missing some, ask the company or organization that issued them for copies. And in the modern digital age, it’s often a breeze to access and download many of these documents online.

Homeowners association legal documents required to sell a house

Legal website NOLO has a list of HOA documents you’ll need to sell your home. These include:

1. Your HOA’s Covenants, Conditions, and Restrictions (CC&Rs) along with its bylaws, rules, and regulations
2. Unusual restrictions on homeowners. Does your HOA have rules about renting out your home, rooms or basement? Or does it restrict parking rights, pet ownership or anything else out?
3. The latest HOA financial statements — Is the association struggling to stay afloat (in which case it may soon need to collect more from homeowners) or is it in rude financial health?
4. How much you currently pay monthly for general fees and maintenance
5. “Special assessments” in the pipeline. Does the HOA plan to levy extraordinary charges beyond its monthly fees for large projects or emergency repairs?
6. Certificates from the HOA that any additions or improvements you’ve made to the home have had its approval, where necessary
7. The HOA’s master insurance policy

Again, if you never had or can’t find any of these documents, ask your HOA for copies.

Legal documents required to sell a house when listing your property 

In addition to providing historical and current documents from your files, you’ll also acquire some new ones during the listing process. These include the following:

1. Your listing agreement — Assuming you sign up with a real estate agent or broker, you’ll get a copy of the listing agreement. This outlines the terms of your partnership with the agent.
2. Residential Seller’s Property Disclosure Statement (SPDS) — You’ll need to complete a document where you will disclose any material facts about the property. For example, if you are aware of any past or present issues with plumbing, you will need to disclose those to future buyers
3. A marketing plan — Your agent and broker will typically prepare a document outlining how and where they will market your home: open houses, viewings, listings on various high-traffic websites, etc.
4. The comparative market analysis (CMA) — The agent will have prepared a CMA when advising you on the listing price. A CMA displays the prices of comparable homes in your neighborhood or area that are presently listed or in escrow, along with others that have recently been sold.
5. Your seller’s net sheet — This itemizes all your selling expenses (including redeeming your mortgage, taxes, escrow fees and the agent’s commission) so that you can see how much you’ll walk away with. Expect an updated net sheet if the price you settle on differs from the one you originally listed at. Some of the numbers will change if those two prices are different
6. A preliminary title report — You don’t always need one of these but they’re a shortcut to confirm your ownership of the home. The buyer will commission a full title search anyway but including one of these preliminary ones in your seller’s disclosure pack can help things along

There’s less for you to do at this point than during the pre-listing phase. The worst of your rifling through files is already over.

When the home is on the market and you get offers

You might barely touch your existing files from now on. But you can expect to add new ones. That’s because plenty of legal documents are still required to sell a house.

Here’s what to expect when your home is on the market and you receive offers:

1. Statutory (aka mandatory) disclosure form — As previously mentioned, you’ll need to provide prospective buyers with the Residential Seller’s Property Disclosure Statement. This document discloses any serious physical defects of your home. The Legal website Nolo states, “Most states’ laws require sellers to take a proactive role in making problems known to buyers, by making written disclosures about the condition of the property, usually using a standard form.”
2. Home inspection report — You don’t legally have to commission a home inspection report. The buyer typically does that. However, some sellers choose to pay for an inspection. That generally happens if the home looks as if it has major defects which could put off prospective buyers
3. Offer and counteroffer forms — Real estate agents create these documents when submitting an offer. And your agent can respond with a counteroffer form if you don’t like all the offer’s terms
4. Final Purchase and Sale Agreement — When you accept an offer, the terms of the deal are laid out in a contract. You may be asked to accept “contingencies.” Those allow the buyer to withdraw in certain specified circumstances
5. Contingency removal form — As contingencies are satisfied or fall away, these can be removed from the final purchase and sale agreement using these forms

Other considerations and documents at this point

Assuming your buyer(s) need a mortgage, they’ll have to pay for an appraisal. This shows the appraiser’s assessment of the property’s market value.

Smart buyers often commission home inspections to reassure themselves about the home’s condition. You could ask for copies of the appraisal and inspection report, although it’s ultimately at the discretion of the buyers whether they provide them.

Shortly before closing, you should receive an estimated closing statement. This lays out all the financial aspects of the transaction and estimates how much you stand to receive at closing.

Legal documents required to sell a house when you’re ready to close on the sale 

Concluding the chapter on this journey is an exhilarating moment. Your closing will typically take place at the offices of the escrow agent, title agent, or attorney. And most sellers generally don’t need to bring much to closing.

In some states, the seller doesn’t have to turn up at all. But, if attending a closing is required, ensure you bring all the necessary documentation. You certainly don’t want to cause any delays.

As the big closing day approaches, here are the items you will need to bring to closing:

1. Take a government-issued photo ID along. You’ll need it along with a secondary form of identification such as your insurance card
2. Bring all the keys to the property. You don’t get to go “home” after
3. Bring outstanding paperwork requested by the escrow agent, title agent, or attorney
4. If you carried out repairs as part of the transaction, bring all the associated paperwork, including receipts. Your buyer(s) should have done a walk-through of the home the day before to satisfy that everything’s in order. But you don’t want any last-minute hitches

Often, you’ll need only your photo ID and keys. But don’t take any chances.

Documents you’ll acquire

On closing or soon after, you’re likely to receive copies of:

1. The deed — This is the document that legally transfers ownership of the home
2. The affidavit of title or seller’s affidavit — You sign this to confirm that you are the legal owner and have the right to transfer ownership
3. Transfer tax declarations — This applies if you live where the state or local government levies a tax on real property transfers. It confirms the price received and states the tax payable
4. Final closing statement — This is unlikely to differ much from the estimated closing statement you recently received
5. Bill of sale — The deed transferred ownership of the home itself. This does the same for anything you agreed to leave in the home. That may include appliances, light fittings, furniture, etc.
   

Of course, that’s only a typical pile of documents you’ll require or acquire. You may need or receive more or fewer depending on your transaction details and the ruling state law.

The bottom line

Remember, you’re not alone on this journey. More than 4 million existing homes are sold in America each month. And the fact you’re reading this suggests you’re ahead of most home sellers.

Having said that, it is good for sellers to understand the scope and complexity of the process. And, we hope, you now have a better grasp of what’s involved.

And if selling paperwork isn’t your forte, a reliable real estate agent can be your co-pilot, ensuring you navigate each stage successfully.