At first glance, selling a home might seem like an active endeavor, and it is. Preparing the home for sale and showing it to interested home buyers require a lot of time and energy. All this activity, however, is supported by a mountain of paperwork from start to finish.
All of these documents are important. They help you meet your legal requirements and, at the same time, keep you on top of the entire transaction. Later on, some of these documents can support your claims in case of disputes and other issues.
Before you list your home
Your real estate agent should provide you with the following documents in preparation for your home sale.
- Comparative Market Analysis (CMA). This is commonly used to determine the best or most competitive listing price for your home. The CMA report contains information about the neighborhood, such as homes similar to yours, properties that are currently on sale, and houses that were recently sold.
- Preliminary title report. This essential document shows information about your property, such as taxes owed, recorded liens, and other special conditions. This should be acquired first thing in the home selling process so as to give you time to settle or clear any disputes.
- Seller’s net sheet. The seller’s net sheet gives you a realistic expectation of how much money you might receive at the end of the home sale. In addition to potential profits, this document will also provide an overview of expected expenses.
- Listing agreement. Every aspect of the home sale is documented on the listing agreement, most especially the terms of agreement between you and your real estate agent, such as the commission and the price. The listing agreement should also include the terms agreed between you and sub-agents who might show your home to buyers.
During the home sale
You will be encountering offers during the second stage of the home selling process. As such, the following documents should be ready once an offer has been accepted.
- Transfer Disclosure Statement (TDS). Home sellers in California are mandated by state law (California Civil Code 1102) to make a written disclosure about their property. You can do so by fulfilling the Transfer Disclosure Statement completely and truthfully.
- Statements of compliance. These documents certify that your property meets California requirements. They cover a variety of home features such as smoke detectors.
- Inspection reports. Just as home buyers are advised not to skip home inspections, sellers are highly recommended to have their own homes inspected before the sale. This is to identify issues and repairs that need to be addressed and to ensure that the property is safe for habitation.
- Make a copy of these inspection reports to present to your buyer. Provide additional documentation for any repairs or improvements that were done.
- Original sales contract. This document certifies that you are, indeed, the rightful owner of the property and in perfect capacity to sell it. Included in the original sales contract is the purchase price as well as the disclosures the previous owner made when you bought the home.
- Professional appraisals. You will need to present your buyer with two types of professional home appraisals. The first one is from your original purchase of the home and, in the case of refinancing, updates. The second one is a brand new home appraisal which the home buyer will need to secure their mortgage loan.
For the closing
In California, home sellers are required by state law to hire an escrow agent. As such, they will be the one to prepare the seller’s closing statement, which is also known as the settlement statement. This document outlines the finances of the entire home sale including your net profits.
This, along with all other pertinent paperwork, will be reviewed on the closing date. This typically takes place between 30 to 60 days after the signing of the purchase agreement.
Other documents you might need
Depending on your circumstances, you might also have to show the following documents:
- Mortgage statement (if you have yet to pay it in full)
- Homeowners insurance information
- Lease agreement (if the property is being rented to a tenant)
- Lead-based paint disclosure (if the property was built before 1978)
Your real estate agent should be able to give you detailed information on all the documents you will need for a successful transaction.
Learn more about selling a home in California
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