Legally Speaking: 4 Common Mistakes to Avoid When Selling Your Home
The process of selling your property is never quick and hassle-free. Apart from ordering a home inspection and then tackling all the significant repairs before marketing your home, you should also find a reliable local real estate agent and promote your house effectively.
On top of it, you may also have different legal concerns to address. Neglecting them will inevitably result in more expenses down the road or may even blow your deal at the last minute. As such, it is important to take care of all possible legal issues beforehand and approach it carefully.
In the article below, you will find the essential information about the most common legal mistakes during the home selling process and how to avoid them. They range from poorly drafted contracts to inadequate legal descriptions, as well as title issues and property disputes. Continue reading to learn more about things you need to do before selling a house.
Failing to Create a Clear ContractThe contract is the most important document in the home selling process. It is the binding agreement between you and a potential buyer which lays out the terms and conditions of the deal. In reality, it is a very significant document that should be drafted comprehensively and in detail.
The contract should include the following core elements:
- Property Details: All the basic information about your house, including its location and size, must be listed in the contract. This can be done by including a legal description of your property.
- Closing Date: The date is when the transaction will take place, and it should be clearly stated in the purchase contract. It may not be required for all property transactions.
- Price: The price of the home should be specified in the contract. Make sure to include all the details, such as the total price, how much you need to pay at closing and any other fees associated with the transaction.
- Deposit: Also known as earnest money. The amount of the deposit depends on the circumstances and is usually between 1% and 5% of the purchase price.
- Warranties: Promises that you make to the buyer that certain items, such as appliances and roof, are in good working condition.
Not Checking the Legal Description of Your PropertyThe legal description is also known as metes and bounds and provides a clear definition of your property’s boundaries. A well-written legal description should include all of the following details:
- Property address: The address of your home must be included in the legal description, including the street number, street name, and city or town.
- Property lines and size: This means that you will have to include a description of all four sides of your property along with the size in acres, square feet, and square yards.
- Survey marks: There are two types of survey marks: corner and intermediate. Corner marks are used to mark the location of a boundary line at a corner of a lot. On the other hand, intermediate marks are used to show the location of a boundary line away from the corners.
The purpose of the survey is to give a clear definition of the boundaries of your property. Thus, hiring a good surveyor is extremely important if you want to avoid any possible issues in the future.
Not Having Proper Title InsuranceTitle insurance is a type of insurance that protects the lender and the buyer from any claims or losses that may arise from problems with the property title. The most common problems with titles are errors in the public records, undisclosed liens, and forgery. There are two types of title insurance policies: owner's and lender's policy. Each protects the policyholder from different risks, such as any claims or losses that may arise from problems with the property title.
Failing to List All Information Regarding Your HouseIt is essential to provide all necessary information about your home in every listing. Otherwise, potential buyers may have trouble finding out about certain details and may even miss certain flaws or damage on the property. As such, you should list all information clearly and comprehensively, including the following aspects:
- Size and Condition: A buyer needs to see the size and condition of the house before deciding whether to purchase it or not. Thus, you must include both the number of bedrooms and bathrooms as well as their sizes and overall condition in your listing. This will help potential buyers imagine what kind of house they would be getting and whether it will fit their family and lifestyle.
- Age and History: Of course, potential buyers also need to know how old your home is as well as its history. This can be done through the inclusion of a timeline in your listing that includes all significant events related to your home since its construction.
- Neighborhood Information: You can also provide a brief description of your neighborhood in order to help potential buyers get a better idea of what they can expect out of it and if it is suitable for them. Of course, this information should be presented in a positive way so that it does not scare away potential buyers.
Final ThoughtsYou should always follow the above-mentioned tips if you want to make the best out of your property and avoid any possible issues during the sale. Otherwise, you may end up with a bad deal or even be unable to sell your house at all.
Selling a home is never easy and hassle-free, so you need to do everything possible to ensure that your property will sell fast and for a good price. If you follow all the above tips and take care of all the legal concerns beforehand, then you can be sure that the selling process will go smoothly.
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