A do-it-yourself sale in the Land of 10,000 lakes could result in 10,000 headaches. You must follow a variety of state and local requirements, or you face costly legal repercussions. Consider a number of things before you sell your house.
Tasks of the Real Estate Agent
A sale by buyer is complex even if you have some knowledge of the process. A real estate agent, though, can determine the right selling price for your home and expose it to a wider market so that you can have a greater opportunity for reasonable offers.
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There are three kinds of real estate listings:
- Open listing: Owners retain the right to sell the home and pay no commissions.
- Exclusive agency listing: Used for a sale by owner who will execute a listing agreement with a broker and pay a commission only if the broker is the procuring cause of the sale.
- Exclusive right to sell listing: The seller agrees to pay a commission to the listing broker regardless of who brings in the buyer.
How Do I Set the Price?
Your sales agent can determine the selling price by comparing prices of similar homes that have been listed in the immediate area. Other factors such as good schools, markets and freeways and neighborhood are taken into account.
Content of the Listing
- Price and commission
- Duration of the agreement
- Items included or not in the sale
- Duties and obligations of seller and agent
Required Seller's Disclosures
Minnesota mandates that the seller provide certain disclosures including known defects or alterations in the home's structure as well as the following:
- Damage by wind, fire, hail or other causes
- Insect or small animal infestation
- Appliances and mechanical systems
- Basement and roof
- Sewer and private well
- Water and mold issues
The failure to disclose known defects or to make other required disclosures can expose you to a lawsuit. Home sellers are required to use the Seller's Property Disclosure Statement or information contained in the Seller Disclosure Law.
What is an Offer or Counteroffer?
An offer is one that is made to pay a certain price based on certain terms and conditions. It is not a legally binding contract until the seller accepts the offer and all of its material terms and notifies the buyer of its acceptance.
A counteroffer is a rejection of the original offer and submission of a new one usually based on price or new terms and conditions.
Once an offer is agreed upon, it will go into escrow where the buyer deposits certain funds into an escrow account and all parties are responsible for the agreement’s terms including disclosures, inspections, financing and securing clear title.
Your Purchasing Agreement
A real estate purchase agreement is a legally binding contract and includes terms and conditions such as the following:
- Identity of the parties
- Description of the property
- Price and financing terms
- Title provisions
- Guarantee of clear title
- Closing date and date of possession
Can You Negotiate Post-Contract Matters?
Should an inspection turn up material defects or undisclosed issues, the buyer can insist that you pay to remedy the defect or issue or lower the purchase price so that the transaction can still go forward.
Closing on the House
At the close of escrow, the following events occur:
- The buyer signs a promissory note
- Final distribution of funds
- Deed is signed over to buyer
- All documents are delivered
- The deed is recorded
As the seller, you need not be present at the closing so long as all costs and documents are signed and delivered. You will typically have to turn over the keys to the buyer the same day as the closing provided that the deed is recorded.
Get a Real Estate Lawyer
This article is not meant to be comprehensive. Minnesota real estate law is complex and you should consult with a residential real estate attorney before selling your home.