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Seller Responsibilities to Close a Home Sale

The moment a sales contract is signed, the clock begins ticking for both buyer and seller to fulfill contractual obligations. The seller must provide important documents to the buyer. Many, but not all, of these items, are procured by the title company or attorney hired to facilitate the transaction.

Items the seller provides. A title company or attorney, which varies by state, acts as a third-party administrator of the transaction between the buyer and seller. The title company or attorney holds money in escrow, researches and provides documents that each party will need, and delivers them at closing. In some states, both an attorney and a title company play a role. These documents include:

  • Certificate of title. A title company examines the public record and determines that the seller has the legal right to offer the property for sale. If the title is clear, a certificate of title is issued.

  • Survey. Although the buyer’s mortgage company will order a new survey of the property, the existing survey will serve as a reference point for the surveyor hired to do the work.

  • Encumbrances. If the property has any liens or encroachments by neighboring property owners, the title company will report those. Liens will need to be settled for the deal to close and the property conveyed to the buyer. The seller must provide proof that liens have been satisfied and the title is clear. Liens can be the current owner’s mortgage, tax liens, or mechanic’s liens for unpaid contractor work. Both liens and encroachments must be settled for the new mortgage company to underwrite the loan for the buyer.

  • Deed. Upon closing, the seller provides a deed to the property. This is the key document that legally transfers title to the property to the buyer or to a trustee who holds it during the years that a mortgage is being paid.

  • HOA transfer documents. In a neighborhood with mandatory membership in a homeowners association, the seller must provide the covenants and declarations of the organization as well as the residents’ rules and regulations. Typically, a transfer fee is paid to the association for the change in homeowner membership.

Besides these documents and payments, the seller, in many states, will be required to provide a detailed description of the property’s condition on a state-approved form shortly after contract signing. Sellers must also provide access to the property for the buyer’s inspector and for the mortgage company to send an appraiser. The seller must have all personal property removed by closing or a date agreed upon in the contract.

Through the title company or attorney, proceeds of the sale must be applied against the current mortgage and that lien released. Finally, the seller must provide all keys, garage door openers, lock codes, and other access devices to the property at closing.

Throughout the process, breaches by the seller can trigger clauses in the contract allowing the buyer to terminate the deal without loss of earnest money. Depending on the terms of the contract, the buyer may be able to recover any costs incurred as part of the transaction. In some cases, the buyer can sue for “specific performance,” requesting that the court force the seller to complete the sale as originally spelled out in the contract. Text or call me at (214)529-6188. Agnes Casanova, MBA - Bilingual Realtor at Fathom Realty.

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