Buying a house could be easier than selling a house. Does this sound a little not out of place? But when you look at the kind of paperwork you need to arrange to be able to sell your house, you could well think that buying a property is much easier. But from my experience, I can tell you both are equally painstaking when it comes to paperwork. While a buyer has to sign endless times on mortgage papers, the seller has to do the same on papers that prove that the property is indeed in his name. In this post, we are going to discuss how to sell a house by owner and the paperwork needed.
The process of selling a house begins with the inspection of papers — preferably the original papers. When you advertise your property for sale, you get inquiries from interested buyers. After reading the specifications in the ads, the potential buyers are interested in looking at the papers to be assured of the veracity of claims made on behalf of the real owners of the property.
Once the buyer is completely satisfied with the papers, the price negotiations may follow. If everything goes alright and the buyer and seller agree on a price, an agreement of sale can be executed. This is done on a non-judicial paper. Based on this agreement, the attorney’s office will create the new deed and formalize the transfer of the property to the new owner through due process. Now, we are going to see what these papers are that a homeowner must have to be able to sell his property. The idea of these papers is to establish your ownership of the property through a series of documents that make your ownership claim unassailable.
Original Sales Contract
Your decision to sell the house completes a lifecycle for the property. It is now ready to make a fresh beginning. So, how did you begin the process to become the owner of your house? It was through an initial sales contract between you and the seller of the house. You should produce this to the prospective buyer to prove that you had begun the process of buying the current property right from the scratch — with a sales agreement on a non-judicial paper. Now when you finalize the sale with a buyer, you will make a similar sales contract on a non-judicial paper to start the process all over again. This paper clearly defines who, what, where, when, and why of the property transaction.
Professional Appraisal
Before you bought the current property, you must have got a price appraisal done by a professional. This is one of the documents required for lenders to offer a mortgage. You should produce this show paper to the prospective buyer for him to have a fair idea about the value of the house at the time when you bought it. This is another minor paper that supports your claim to be the owner of the house. If the buyer decides to buy your property, he may likely go for a fresh and independent price appraisal done on your property. This report will be required for him to take a home loan from the bank or a private lender.
Mortgage Statement
If you have bought the house on a mortgage, you may be paying a monthly installment and you will still have some amount to pay off. You will need to share the mortgage-related information with the buyer and also show him relevant papers. When you close the deal on your current property, you will have to pay off your lender. You may do this with the money you receive for selling the house. For a new buyer, this is important that the property does now owe any money to anyone, more importantly to the bank or a lender.
Utility and Other Liabilities
A new buyer must not get unpaid bills and other liabilities passed on to him. For this, he must be told clearly about different bills and dues that are pending. If all the bills are serviced and are up-to-date, you should produce the relevant papers. The same goes for purchase and maintenance charges of the appliances in the home. On your part, you should prove that there is no liability of any sort that gets passed on to the new owner. This makes a clean start for the transaction of the deal and transfer of the property.
Letter of Allotment
You should be able to produce the letter from the relevant authority or society that confers the house to you. This is one of the primary documents that prove your ownership of the property.
Sale Deed
The sale deed executed by the previous owner and you at the time of buying the house should be kept ready in its original version to show the prospective buyer. Sometimes, a homeowner submits this paper to the county office for the registration of the property. In this case, the county office gives a receipt which can work in place of the sale deed.
Sanctioned Plan
The seller must have a copy of the original building plan from the authority or the society that built the building. You should be able to show this and keep it ready to pass on to the new owner.
Society Documents
To be able to sell your property, you would need a NOC from the authority or society that manages the property. They will not mind giving you a NOC for sale as long as there are no dues on your part to be paid to the society.
Encumbrance Certificate
A new buyer must not inherit any legal dues on the house he is purchasing. A clear and marketable title will have an encumbrance certificate stating there are no legal dues pending on the property.
Final Thoughts
Organizing and collecting necessary papers to sell your house can be cumbersome and time-consuming. However, if you have been keeping these papers safely ever since you bought the property, you should not face many difficulties. Missing any of the papers mentioned in the list above can raise red flags for the buyer. So, it’s a good idea that you organize and collect all the necessary papers before you put the house up for sale.