Key takeaways
- If you sell your home without an agent, you are responsible for assembling many of the legal documents involved in the transaction, such as disclosure forms, proof of ownership, property surveys and tax records.
- One of the documents is the purchase agreement. Sellers without an agent can prepare their own purchase agreements or use a form agreement. Either way, they should have a real estate attorney review the document to avoid unfavorable terms, missing contingencies or unenforceable clauses.
- Some states require a licensed attorney to conduct or participate in the closing, and even in states where an attorney is optional, sellers should strongly consider hiring one. Without an attorney, there is no professional at the closing table reviewing legal documents on the seller's behalf.
If you sell a home by yourself, you will need to perform the real estate services agents typically provide. One of the services is gathering and preparing legal documents necessary to the sale.
These documents can be organized into three broad groups. The first are documents prepared before listing the home. The second is the purchase agreement to buy the home. The last are documents related to closing (title, settlement and transfer documents).
Documents before listing
Prior to putting your home on the market, you should gather the legal documents that identify your property and prove that you own it. These include:
- Original deed or proof of ownership: Confirms your legal right to sell
- Property survey: Verifies boundaries, easements and encroachments
- Recent property tax records: Shows assessed value and tax obligations
- Homeowner association documents: Includes covenants, dues, rules and current financial statements (if applicable)
- Home improvement permits and repair records: Proves work was done to code
- Mortgage payoff statement: Obtained from your lender so the title company can calculate net proceeds
Having these in hand before listing shortens the contract-to-close timeline because buyers and their lenders won't be waiting for you to produce them. If the buyer's lender orders a home appraisal, your repair records and permits can support your asking price during the valuation.
You also fill out property disclosure forms. These disclose known defects in major household components such as a roof, foundation, plumbing, electrical systems and environmental hazards.
The federal government banned lead-based house paints in 1978. If you're selling a home built prior to that year, you give prospective buyers the Environmental Protection Agency’s "Protect Your Family from Lead in Your Home" pamphlet, disclose any known lead-based paint hazards and include a lead warning statement in the sales contract.
Failing to disclose a known defect can expose you to breach-of-contract claims or fraud liability after closing.
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Use a form for the purchase agreement
Drafting a purchase agreement to sell property sounds intimidating. Fortunately, most sellers (and agents) use standardized forms from their state or local real estate association. They also can search for them using online legal form companies. Another option is hiring a real estate attorney to draft a custom contract tailored to your transaction.
No matter who writes the contract, verify these elements before you sign:
- Sale price and financing terms
- Earnest money deposit amount and where it will be held
- Contingencies for inspection, financing and appraisal
- Closing date and possession timeline
- Disclosure obligations
In a typical real estate transaction, the buyer's agent writes the contract. Keep in mind that they don't represent you. Without qualified legal counsel reviewing the document, a seller can end up with unfavorable terms, missing contingencies or unenforceable clauses.
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Closing documents
The closing process typically involves a neutral third party that is called a title company. The title company collects and disburses the funds involved in the transaction. The title company also performs several services integral to closing. Here are the specific documents and services the title company manages:
- Title search is a public records examination that determines the property is clear of liens and is eligible for sale. The title commitment is the preliminary report issued to both parties before closing.
- Title insurance is required by most mortgage lenders. This insurance protects the lender (and a separate policy protects the buyer) from unforeseen defects in the title. It's a one-time fee, paid at closing.
- Closing disclosure or settlement statement is typically prepared by the title company or settlement agent, though the lender bears legal responsibility for the closing disclosure on financed purchases. The title company also schedules closing day and makes sure every document, signature and dollar lands where it should.
- Deed recording occurs once the sale is finalized, when the title company records the deed with the county.
- Government filings include the closing paperwork filed with the appropriate agencies, with copies distributed to the buyer, seller and mortgage lender.
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Where you need an attorney
Some states require a licensed attorney to handle some or all of a real estate closing, according to the federal government's Consumer Financial Protection Bureau. Check with your state on the law, it said. If an attorney isn't required, you still may want to retain an attorney to represent your interests, it said.
The cost of hiring an attorney for a closing ranges runs from $150 an hour to over $500 an hour, depending on location and experience, according to Mountain View Law, a Killington, Vermont law firm with a real estate practice, although some attorneys will charge a flat fee for the transaction that could start at $2,500.
If they're at the closing, the attorney prepares or reviews all documents, including the deed, promissory note (the borrower's written promise to repay the mortgage) and mortgage. They verify identities, supervise the signing process and manage the disbursement of funds. After closing, the attorney records the deed and mortgage with the county recorder's office.
Even in states where an attorney is optional, you should strongly consider hiring one. There are many, many moving parts in an agreement to sell a house, and an attorney can help resolve any legal issues that arise, such as:
- Explaining the legal documents that form the basis of the agreement
- Resolving disputes such as a buyer claiming you promised to repair or replace a household system
- Ensuring the closing process complies with state real estate law
An attorney will protect your interests should these or any other legal disputes arise.
Frequently asked questions
Can I use a title company instead of an attorney to review my contract?
A title company can facilitate the closing and process paperwork, but it does not represent either party or provide legal advice. If you need someone to review contract terms and protect your interests as the seller, that is the role of a real estate attorney.
What happens if a required disclosure is missing from the sale?
A missing or incomplete disclosure can delay closing if the buyer's lender or title company flags it. In some states, the buyer may also have grounds to cancel the contract or pursue legal claims after closing if a required disclosure was omitted. Check your state's disclosure requirements early in the process.