Prior to Selling your home it is imperative that you have all your documents as they relate to the sale organized and ready for attorney review. This is an important step because it will familiarize your attorney with the transaction and most importantly allow the attorney to detect any potential issues or problems that may arise. Taking a proactive approach with sales has allowed us to have a 98% closing success rate, as we resolve any potential deal breaker prior to contracting or we draft around them to avoid any delays and conflicts.
The following documents are critical to go over prior to issuing a contract of sale:
The Deed: A written document that shows ownership of property. A deed includes the signatures of current owners and a legal description of the property. In most cases, the home buyers receive the deed at the closing of the sale, subject to recording in the public record, when they become the true owners of the home.
Commentary: This verifies that you are the owner of the house and also apprises the attorney as to what type of interest you own and will be transferring.
The Survey: A survey shows the property boundaries and features such as buildings, improvements, and easements.
Commentary: As a Seller you should review the survey and make certain that all the boundaries correspond to that survey. If there have been any changes or additions you should communicate it to your attorney as so we can properly address the matter and avoid any unnecessary hold ups.
Certificate of Occupancy: is a document issued by a local government agency or building department certifying a building’s compliance with applicable building codes and other laws, and indicating it to be in a condition suitable for occupancy.
Commentary: As the Seller you should make sure that you have a Certificate of Occupancy for each permanent structure on your property. This includes any extensions, additions, detached garages, in ground pools, cabanas, and so forth. Failure to have a Certificate of Occupancy may preclude you from effectively consummating the sale of your home.
Payoffs: Mortgages and Loans: A legal document obligating a borrower to repay a loan at a stated interest rate during a specified period; the agreement is secured by a mortgage that is recorded in the public records along with the deed.
Real Estate Taxes and Utilities:Commentary: Not to important, however have them around just in case the buyer makes an inquiry you will be prepared.
Please do not hesitate to contact our offices if you any questions about these documents.
“SHOW ME THE MONEY”
Unfortunately; the Sales Price is not what you will end up keeping for your pocket as you there will be costs and expenses associated with the sale of your property. When selling you will likely incur the following expenses:
Real Estate Broker Commissions:
Commentary: If you utilized the services of the real estate broker you will be responsible for the payment of their commissions. Commissions vary and are negotiated prior to the broker listing your home for sale.
Commentary: Depending on the location of your home, State Taxes, City Taxes, or both will be due for the transfer of real estate.
State Tax is $2.00 per every $500.00 of the sales price
City Tax is calculated as follows:
Residential Type #1 – A conveyance of, or the transfer of, an economic interest in:
- a one- to three-family house;
- an individual residential condominium unit; or
- an individual cooperative apartment.
Residential Type #2 – A grant, assignment, or surrender of, or the transfer of an economic interest in a leasehold interest in
- a one- to three-family house or
- an individual dwelling unit in a home of more than three families living independently of each other.
For both Residential Type 1 and 2:
- If the consideration is $500,000 or less, the rate is 1% of the consideration.
- If the consideration is more than $500,000 the rate is 1.425%.
For all other transfers:
- If the consideration is $500,000 or less, the rate is 1.425% of the consideration.
- If the consideration is more than $500,000 the rate is 2.625%.
Satisfaction of Mortgage:
Commentary: Just a reminder, if you have a mortgage on the property you will have to pay it back.
Real Estate Taxes and Adjustments:
Commentary: Real Estate Taxes and Utilities will have to be paid up until you actually close on the deal
Capital Gains Taxes:
Commentary: The profit on your home may be subject to capital gains tax. While there are some exclusions for primary residences, we recommend that you consult with your accountant for an estimate of what potential tax liability you may incur as a result of the sale. Additionally, if you are selling an investment property it may qualify for a 1031 Exchange. The above outline sets forth a majority of costs that a Seller will incur with exception to the attorney’s fee. Attorney’s fees will vary depending on the attorney’s skill, experience and type of work product that will be provided. We recommend that you interview and hire an attorney that is qualified to represent and protect your interests throughout this entire process. Hiring a well qualified real estate attorney is always a wise investment.
**Please be reminded that all transactions are unique and the above commentary may or may not apply to your situation. It is imperative that you consult with an attorney to get legal advice as it relates specifically to your matter.