Contracts and paperwork:
Many people feel that selling on your own must be highly complicated. Some legalese and a few obscure real estate terms work to intimidate. It’s easier than you think. Let's start with contracts.
Contracts must be in writing, usually...
Sales contracts must be in writing in just about any real estate transaction. Contracts eliminate misunderstandings. They help ensure that both parties get what is agreed to.
Surprisingly however, the initial negotiation phases for by-owners are often verbal. That’s because of the personal informality that is frequently established between buyers and sellers.
If a purchase agreement is reached, and the buyers haven’t indicated that the offer should now be put in writing, then you need to initiate this requirement. You could have your attorney (or theirs) prepare a full contract - as soon as possible.
You can also quickly obtain a basic offer/contract at most office supply stores. Most generic contracts fail to address unique issues and contingencies. More comprehensive forms can be found online from kaktus.com,myeasyforms.com or findlegalforms.com. Seriously consider adding an “Attorney Review” clause (see the NEGOTIATE section) to any of these generic agreements.
The buyers usually present their offer on a contract form of their choosing. It’s important that you are aware of the other contractual elements besides price. For your review, here is a list of the various contract elements. In your area, the elements in a contract may use a slightly different name.
When talking with buyers refer to the “sales agreement” as it sounds friendlier than a "contract." Talk with the buyers about initialing the agreement, not signing the contract. Some people are nervous about putting their signature on anything. Ever notice how the experienced salesman will ask their client to put their John Hancock on an agreement? Same purpose.
When a written agreement is finally reached, make sure that you and the buyer both walk away with a signed copy of all documents.
Real estate paperwork is not the big deal that it's portrayed to be. Sellers just need to know who the buyers are using for an attorney (if any), their lender and which title (escrow) company will monitor the settlement (closing). These are the "specialists" who will do the paperwork and the closing activities of your sale.
Specialists include the lender, the attorneys, escrow agents and title companies. They work together to close a home correctly. They function as neutral third parties to handle and coordinate the forms, information, the exchange of money and the eventual legal recordings of the sale.
Agents don’t know all the legal ins and outs of typical contract provisions. That’s why they have their clients contact these specialists after the contracts are signed.
Before the Great Recession, there were approximately six million homes sold annually. And each year about a million of these were by-owner. And just like sales through agents, the paperwork is done by people who do it for a living. It's their job to handle the paperwork concerns, not yours.
Ask these specialists what they need from you. Supply them with a copy of the sales contract. You’ll also provide contact names and phone numbers for your attorney, the title or escrow company, your mortgage company if your property isn't paid off and the buyers’ lender. Anytime you are uncertain about anything, just ask. If there are glitches or problems, that’s what they’re there for.
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