Selling
Your
Home
Point
#1: Sign NOTHING without your attorney’s approval.
Many homeowners automatically assume that the first step in selling their
home is to find a good real estate broker. While the value of a good real
estate broker cannot be underplayed, you need to realize that the agreement
that you sign with a broker can obligate you to pay thousands of dollars,
and a mistake or misunderstanding can be very expensive.
Why would you sign any
agreement without first consulting your lawyer? When we quote you a fee to
handle your deal, that fee includes a review, and if necessary, the
negotiation of your broker’s agreement, so have it reviewed before signing.
Point
#2: There is no such thing as “standard” in real estate.
There is no “standard broker’s commission”, no “standard contract”, no
“standard obligations to make repairs”, etc.
While certain things are “common”, everything is negotiable. For
example,
·
most often, a
representation is made that “the plumbing, heating and electrical systems
will be in working order”, or that “the appliances will be in working
order”, or “the roof will be free of leaks”, but these are not mandatory.
If you know the roof leaks, or an appliance doesn’t work, make us aware of
the fact, and you may not need to give a guarantee;
·
usually, a
closing takes place 60-90 days after the contract is signed, but if, for
example, you need more time for your children to finish school, you can
probably be accommodated.
Point
#3: Don’t make the house better for the new buyer than it was for
you. If a piece of
molding is missing, an appliance is broken, or a closet latch sticks, leave
it. You’re not obligated to make repairs.
It is common for a
purchaser to request an engineer’s inspection of the property before signing
a contract, and often, they will use the report to renegotiate the price.
However, make the purchaser aware up front that they are welcome to have an
engineer look at the property, but that the report is only for their own
peace of mind, and that you will not renegotiate the price after the
inspection.
Point
#4: “Property Condition Disclosure Statement”.
Effective March 1, 2002, the legislature requires that a seller provide a
buyer with a “Property Condition Disclosure Statement”. This should
NEVER be provided, and could impose liability on you even after the
closing has taken place.
The law
gives you an option to provide the buyer with a $500 credit in lieu of the
statement, or, as is always included in every contract drawn by our office, a
clause can be included in the contract agreeing to not provide the statement,
and having the buyer waive the $500 credit.
Point
#5: Mortgages. All
mortgages, including credit lines and equity loans, must be paid off at
closing. Be sure to give us all account numbers and information so that
we can obtain the necessary pay-off information for the closing.
You should also be aware
that at the closing, the title representative will charge a “pick-up fee” to
payoff each outstanding mortgage. Since the title company is selected by the
buyer, there is virtually no control over what the title representative will
charge, and fees of $200 or more per mortgage are not uncommon.
By placing a simple clause
in our contracts, we can limit the charge for these pickup fees, again saving
you hundreds of dollars in closing costs.
Point
#6: Certificates of Occupancy.
Make us aware of any and all construction done on the premises so that we
can determine if a Certificate of Occupancy or Completion is required. Don’t
forget to tell us about any sheds, pools, decks, porches, garage conversions,
finished basements, apartments, dormers, extensions, etc. You may not need to
have it legalized in order to close, or it may already be legalized, but we need
to know this as soon as possible.
Seller’s Checklist of
Events
-
Consult and
retain your lawyer before signing anything, including the broker’s
agreement.
-
Have us
negotiate the broker’s agreement for you if necessary. Rates and terms are
highly negotiable.
-
If the buyer
wants an engineer’s inspection, it must be done before contracts are prepared,
and should not be used to negotiate a price reduction.
-
We prepare the
contract and send it (often by fax), to buyer’s attorney. When buyers have
signed it, the contract and a deposit check are returned to us, and we will then
meet with you to review and sign the contract.
-
We will
request payoff letters for all of your mortgages, including credit lines and
equity loans. Credit line accounts must be closed well before closing.
-
Buyers will
order a termite inspection, which is usually conducted within 10–15 days after
contracts are signed. If termites or other wood destroying insects are found,
you can either correct the condition or cancel the contract.
-
The buyers’
mortgage lender will send an appraiser to the home, and the title company may
send a surveyor.
-
The buyer’s
mortgage commitment is usually due within 30–60 days after the contract is
signed. If buyers fail to get a mortgage, the contract deposit may be
refundable and the transaction cancelled.
-
The buyers’
attorney will order a title report, and possibly a new survey for the property.
-
When title is
clear, a closing date is set. The closing date stated in the contract is only a
“target date”, and the actual closing date can vary by as much as a month or
more.
-
Once the
closing date is firmly set, you can arrange for your movers.
-
Buyers, often
with the broker, will meet with you about 48 hours before the closing to inspect
the condition of the property.
-
Contact your
utility companies (LIPA, water, etc.) and your homeowner’s insurance company,
and arrange for the termination of your services, or the transfer to the buyers.
-
The closing
will usually take place in the office of the buyers’ mortgage lender.
-
If you stay in
possession of the property after closing (typically 3–5 days), money is held in
escrow to guarantee the condition of the property when you vacate. However, to
avoid claims being made against the escrow after closing, if possible, try to
vacate the property the day of closing.
Copies of Documents
Seller Should Provide To Us
BEFORE Contracts Can Be Prepared
o
Deed
o
Tax
bill
o
Survey
o
Old
Title Report/Policy
o
Mortgage
payment tickets or statements for all mortgages, equity loans and credit lines.
o
All
Certificates of Occupancy or Completion
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www.LI-Lawyer.com
Copyright by James P. Calamis, Esq., Commack 2005