Paperwork for Selling a House by Owner

paperwork for selling a house by owner

Gathering all the paperwork for selling a house can be stressful. However, a little preparation can make your home sale go smoothly. Generally speaking, there are 13 main areas to consider (or 11 for those outside of California). This accounts for everything from listing the property to handing over the keys, and the process can be complex for those unfamiliar with the real estate industry. Any professional home buyer or seller should be able to give you advice on all of these.

To make the process more understandable, the easiest thing to do is to break down the paperwork for selling a house by owner into three stages. That’s before the property is listed as being for sale, during the sale, and after the sale.

Before the Sale

Before the property is even on the market, there are documents that you need to get familiar with. More importantly, you need to get the original documents in order to move forward with the sale. From a legal perspective, it’s extremely difficult to list a house without these things in order from the start.

Original Sales Contract

The original sales contract is a good place to start. This is the document used for the sale of the property from the previous owner to you, the current owner. It outlines everything there is to know about the sale as well as what was paid, what may have been problematic at the time, and what exactly was purchased.

Original Appraisal

The original appraisal is the appraisal provided on the sale of the house from the previous owner to you, if you had one done. The appraisal will cover the state of the property at the time it was last sold. This is highly informative of any existing issues on the property, and helps to give a better understanding of any limiting factors that may reduce its value on the market.

Mortgage Payoff Statement

If the property was mortgaged, the mortgage payoff statement is a document provided by your mortgage lender. That looks over what has been paid toward the mortgage and when, as well as what may be outstanding. This will be very important when it comes to calculating taxes and ultimately the money you’ll walk away from the property with.

Proof of Homeowners Insurance

Proof of homeowners insurance is pivotal to keeping the new buyer informed as to what claims have been made to the home and any work that has been done as a result. That’s a big information point, especially if there have been multiple issues with the property. On top of that, it also informs the new buyer what kind of fees they should expect when owning the home.

Homeowners Association Documents

The final presale documentation comes only if the home being sold is a part of a homeowners association (HOA). These will have specific implications on the home and the community it is in, and the buyer needs to know what they are before committing.

Articles of Incorporation

Articles of incorporation are the documents that essentially show that the property is a part of the homeowners association and subject to its terms.

Declaration of Covenants, Conditions, and Restrictions

The declarations of covenants, conditions, and restrictions (or CC&R) are the conditions of the property within the HOA. This outlines the conditions that are in place, and any restrictions in place that impact potential changes to the property.

Extra Info

Although it is not a part of the legally required paperwork for selling a house by owner, having some additional documents can go a long way in making a property easier to sell. Any good agent will advise on any additional documents that would benefit the sale of your home and try their best to help you produce them. 

Receipts

Receipts of anything relevant to the property are great to have, especially in terms of large repairs or improvements. They help you to show proof of any work that you have had done, which can in turn help to increase the value of your property and the likelihood of sale.

Utility Bills

Utility bills give a big insight into the running costs of the property. For a buyer, that can go a long way in helping them to decide if the property is right for them. It also shows that there aren’t likely to be any outstanding bills that they could somehow wind up liable for.

When the Property is Listed

Once you’ve gathered all the documents above, you should have everything in order to actually begin the house listing process. The next steps are to gather the additional documents that are required to be provided to potential buyers, in order for the property to move further along in the sales process.

Preliminary Title Report

The preliminary title report is a mandatory piece of paperwork that is required for selling a house, whether by owner or by an agent. It outlines the situation of the property as it stands, as well as any financing or issues that fall within it.

Mandatory Disclosure

Mandatory disclosure documents are used to inform potential buyers of any hazards in the property, like poor quality building materials, toxic chemicals, or any other relevant problem areas. It is important to be transparent about any issues like this on the property, as it could be a safety hazard for the new owners and could come back to bite you.

Natural Hazards Report (CA)

A legal requirement in both San Diego and across the whole state of California, is a natural hazards report. This lists any potential issues from an environmental perspective, like flood or fire risks, along with industrial sites, like nearby airports or large factories.

Transfer Disclosure Statement (CA)

The transfer disclosure statement is another legal requirement for home sales in California. It is a handwritten document created by the current homeowner discussing any relevant issues with the property where you must disclose an known issue to the buyer.

When an Offer is in:

Finally, when the offers are in, there is just a small amount of paperwork remaining.

Purchase and Counteroffers

The purchase and counteroffers are documents outlining the agreement that is being made between the current owner and the proposed buyer. It also looks into terms of the sale, and any conditions that may be present should the owner accept.

Final Purchase and Sale Agreement

The final purchase and sale agreement is very similar to the previous, but looks even more closely into the agreement of the sale itself. This is where conditions of the sale can be finalized and agreed to.

Most Recent Tax and Closing Statements

These documents are for income and tax purposes. They highlight any property taxes owed by the current owner and look at what the current owner stands to make at the end of the sale (after all fees and any further taxes). If that will be more than $250,000 per owner (i.e. $500,000 for couples), then a seperate form, a 1099-S, is required as well.

The Deed

And lastly, to finalize the entire sale process, there is the transfer of the deed. This is the document that specifically lists the owner of the property and the land that it lies on. It proves lawful ownership of the property, and that is the last thing required to complete the sale.

Conclusion

As you can see, the process of selling a home is not a short one, even when it just comes to gathering up all the required paperwork! It’s a long and windy road, full of twists and turns that can have homeowners going in circles if they’re not working with the right people. That’s why we work with homeowners across San Diego County to make the house selling process as easy and stress-free as possible.

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