The paperwork for selling a house by owner can be quite cumbersome to gather. Preparing and listing your FSBO house can be tough too especially if you don’t have the necessary paperwork for selling a house without a realtor.
This is particularly true when it comes to some of the legally binding documents in Utah. After all, you’re probably caught up with the excitement of actually closing a sale; and it’s easy to forget about the minutiae of paperwork.
But unfortunately, that minutiae isn’t quite so minor. In fact, it’s positively vital. It’s there to protect all parties involved—both yourself, the buyer, the bank and even auxiliary services like inspectors.
To help you prepare the paperwork for selling a house without a realtor, here is a list of 12 must-have documents.
List of Paperwork Need To Sell by Owner
Containing at a bare minimum the following:
- The property address.
- Amount of the earnest money deposit.
- Purchase price.
- Items included.
- Special assessments.
- Home warranty plan (if applicable.)
Note that much of the above will likely have to be adjusted or attach several addenda before you and your buyer come to a final agreement. But believe it or not that’s neither the most detailed document you’ll need during the sale process, nor even the most nerve wracking part of the sale.
2. Statement of Appraisal Paperwork
This documents will be prepared by a licensed appraiser from the bank of your buyer assuming a traditional loan is being used. Keep in mind that the statement of valuation contained in the original assessment may not necessarily reflect your home’s current fair market value in the appraisal.
3. Current Mortgage Statement
If you’re like most Utah residents, you’re probably nowhere near paying off your mortgage in full. Your payoff amount is the total you’ll have to pay to satisfy the initial loan, including any interest owed. Note that the payoff amount isn’t the same as your current balance. But it will give both any potential buyers a rough estimate they can anticipate.
4. Homeowners Insurance Statement
Having home owners insurance will help you declare any damages or liabilities resulting from an accident; but at the very least, this paperwork contains the terms of your insurance coverage, limits and deductibles as a common courtesy for any potential buyer.
5. A List of Repairs and Maintenance Performed
While this paperwork will likely be informal, it’s always a good idea to include receipts for any and every repair you can think of, including:
- Major repairs.
- Roof and window replacement.
- Gutter and chimney cleaning..
- House painting.
- HVAC replacements,
- And even utility payments, particularly if you recently installed energy efficient devices.
6. Home Manuals and Warranties Paperwork
- Washer & Dryers.
- Air Conditioners.
- Garbage Compactors and Disposal Systems.
Paperwork Needed During the Sell of Your Home
7. Preliminary Title Report
A preliminary title report helps both you and a buyer understand what conditions and restrictions are recorded, how much property tax is due and if there’s any outstanding liens on your house. They are there as much for your protection as they are for a buyer.
Title report paperwork and prep is not necessarily cheap. It’s not unheard of for Utah residents to pay in excess of $200 for a preliminary title report—particularly if they choose to do a complete title search with a major firm with national representation. But you’ll likely find it an investment well spent.
8. Mandatory Disclosures (view here)
A mandatory disclosure doesn’t just refer to the condition of your house. By law, you’re required to report to potential buyers the presence of:
- Lead paint.
- Environmental hazards, including water and fire damage as well as oil spills and the presence of toxic chemicals, including the storage and manufacturing of methamphetamine.
- Rodent and pest infestations.
9. Title Insurance Forms
Legally, title insurance isn’t required by law in the state of Utah. But it’s customary to include it regardless. It helps protect buyers from any loss resulting from misleading information about the condition of land or property in a title including easements, boundaries and descriptions and anything that the property is securing. Typically, you can obtain title insurance through the same firm that issues your preliminary report for the ease of convenience.
10. Property Tax Statements
Federal law requires you to reveal the exact amount of property tax to a potential buyer to calculate any outstanding property taxes you currently owe and to ensure they have a reasonable estimate of what they can expect at closing.
11. Home Appraisal Reports (view here)
It’s virtually unheard of for a lender to finance the sale of a house without comparing both the current and historical valuation resulting from neighborhood sales as well as any repairs or renovations you may have made to your home. Here’s the stickler; federal law dictates that the choice of an appraiser is subject to approval by the mortgage lender, with any costs to be paid for by the seller themselves, with prices sometimes reaching close to $400.
Your property title deed is the binding legal document that officially conveys ownership of a house from the seller to the buyer. It includes both the description of the property, amount a house is being sold for and the terms and conditions agreed upon by both the buyer and the seller.
you’re a homeowner in Utah who is considering selling your home through owner financing, here’s the top five forms you’ll need.
What If You’re Seller – Owner Financing Your House?
Owner financing has rapidly become one of the more popular options for many Utah homeowners who are looking to sell their homes quickly, legally and with the incentive of additional revenue generated from interest fees. It’s a fast transaction compared to the traditional selling approach. Seller financing comes with no origination or underwriting fees and eliminates the lengthy and uncertain time many home buyers face with mortgages from traditional lenders.
But any loan—even the most informal—is going to need some form of documentation in order to secure your legal rights as a seller. Good faith alone simply isn’t enough. And while it is recommended that some prior investigation into a buyer’s ability to repay a loan should be conducted, you’ll also need to maintain the proper paperwork for the sake of liability.
A promissory note is a legal lending document indicating a buyer agrees to pay off a set or variable loan in a given amount of time and under specific terms. Typically, it will include:
- The name and address of both the borrower and the lender
- The exact amount of money being borrowed
- Terms of the collateral being used
- A payment schedule with detailed amounts, including applicable interest rates and amortization schedules
- Signatures of both parties
Establishing the terms of collateral is absolutely critical in a promissory note. You’re essentially acting in lieu of a mortgage lender during a seller financed home transaction; and just like a traditional lender, you should retain the right to foreclose should a buyer default on payments. Keep in mind that promissory notes can be both secured and unsecured; but with an unsecured note, you’re not guaranteed any reimbursement should a buyer default. Unless you’re absolutely certain of a buyer’s credit history and their subsequent ability to repay, it’s strongly recommended you use a secured note for any real estate transaction.
A seller financing addendum is an integral part of the real estate purchase contract in the state of Utah. It details both the credit terms, the amount of the loan, payment schedules, earnest money that may be due on deposit, the amount due at the end of the contract and any deed of trust allowing a third party to take possession of a home should a buyer default.
An all inclusive trust deed (or AITD) is an instrument secured by a promissory note which combines multiple loans into a single document for the sake of convenience. In an owner financed transaction, it combines both the original mortgage terms as well as the secondary mortgage to be paid by the buyer directly to an owner at additional interest. An AITD isn’t legally necessary for a seller financed sale; but if you’re looking to preserve the original mortgage loan (which is more than likely be at a much more beneficial rate to you as a homeowner,) you’ll unquestionably find it to your advantage to attach one.
4 – Earnest Money Deposit Agreement (form here)
An earnest money deposit is simply an agreement made in good faith that a buyer has deposited a set down payment to ensure the legitimacy of their offer. It’s held in escrow until closing by a third party, typically a real estate attorney or a title company. The amount must be specified within the contract, and any money held should be credited toward the final negotiated purchase price.
What If I Need To Sell My House Quickly?
We’re not going to lie. Going through appraisers, lenders and property title companies can be a time consuming process. So much so that you may wind up waiting over 90 days to sell your property.
At Gary Buys Houses, we simplify the process for you. We’ll buy your house as is, with no need for expensive repairs or working with multiple providers. What’s more, we can give you a fair estimate in as little as 3 to 5 business days.
Finding the right buyer was nerve wracking enough. Keeping track of paperwork shouldn’t have to be.