Aside from cleaning, preparing, and marketing a home, sellers must also take several legal considerations into account. Many of these can mean the difference between a successful sale and a lost opportunity, so it’s important to know what to do prior to closing on a sale. This home seller legal checklist will help you be prepared to sell your home.
- Resolve all liens, debts, etc.: Encumbrances such as liens, debts, and other claims against the property all ought to be resolved prior to selling. Otherwise, you probably won’t be able to sell the home for as much, and you might even face legal difficulties.
- Get all owners on the same page: If the property is held jointly, it’s important to make sure everyone is on the same page. This stops issues with the title from occurring during the sale, and prevents disputes when it comes to dividing up the proceeds from the sale.
- Order a title commitment: A title commitment is issued from a title company, which will review the history of the property’s title. It essentially guarantees that there are no outstanding liens or claims against the property, thereby ensuring the seller has full right to transfer the property.
- Make disclosures: All known defects and hazards must be disclosed to the buyer. These include major structural defects, the presence of lead-based paint, growth of dangerous mold, and the existence of radon hazards. Easements and other encumbrances must also be disclosed.
- Order a survey: A survey will map out the boundaries of the property as well as any easements or other encumbrances that may exist on it. This prevents fraud by giving you (and the buyer) full knowledge of exactly what you’re selling.
- Taxes: Your attorney should review the previous year’s taxes paid on the property in order to determine what the buyer should pay in prorated taxes for the current year. This information will be included in the contract.
- Letters: If you are part of a homeowners or condominium association, make sure you have a letter drafted to inform the buyer that any right to first refusal has been waived, that there are no outstanding assessments against the property, and that common areas (if any) are properly insured.
- Prepare closing documents: Closing documents will include the deed, an affidavit of title, a bill of sale, an ALTA statement, transfer tax forms, and a settlement statement. These documents are typically prepared by your attorney.
- Attorney review: Your attorney will review the purchase contract to make sure it’s fair. At times, they might suggest changes to the contract, which the buyer will either accept or reject. Normally, you have five days to have the contract reviewed.
Throughout the process, you will need the assistance of a real estate attorney. The assistance of a skilled lawyer will help tremendously with the review and preparation of documents, avoiding pitfalls, and preventing legal difficulties. Otherwise, a sale could very easily get messy, especially if there are complications with the title or ownership of the property.
If you have any questions about selling a home in Illinois, contact the attorneys at Hart David Carson LLP.