Selling a property is something that requires going through the right process and ticking all the boxes. You need to ensure that you do things by the book to avoid creating legal issues or, worst still, losing your home.
So, what do you need to do?
Verify Ownership and Title
One of the first things you need to do is to verify the ownership and title. You need to check things like disputes and liens, just in case there are any attached to the property.
Clean titles are essential if you want a legally binding sale. If you don’t have that, then there can be a problem.
If you are transferring property between members of your family, you might also need a quitclaim deed. These transfer without warranties, which is often helpful.
Assess The Condition of the Property
At the same time, you also want to assess the condition of the property. Sometimes, it’s worth looking at making repairs, especially if there is structural damage. If you try to sell a property without these, it can increase costs substantially.
Overall, you’re usually better off making the repairs yourself, but you should consult with your real estate agent to avoid wasting a lot of money. You don’t want to be in a situation where you’re losing money overall by making the repairs.
Check Any Outstanding Taxes
After that, you want to check the outstanding taxes. These can be substantial, and something you need to avoid if you want to avoid legal issues in the future.
Sometimes, a property can have a lien on it. This occurs if there are any outstanding bills that need paying to the HOA, contractors, or other third parties with the power to impose liens.
Your best bet is to clear these obligations before you sell. If you don’t, then you’ll need to pay from the proceeds, and lawyers and other parties will take a cut.
Understand the Mortgage Payoff Element
If the property has a mortgage attached to it, you’ll need to understand this as well. Mortgage payoffs occur when you sell your property, the buyer pays you, and then your solicitor uses that money to repay your original lender before giving you the remainder.
You want to ensure that you can actually pay off the mortgage from the sale. Usually, you can, but you may run into issues if the legal fees are high, your property has undergone significant damage, or there’s a financial crisis underway.
Confirm Zoning
Many people miss this one, but you’ll also want to confirm zoning in the area. Sometimes, regulations don’t allow the property to exist in its existing form. Therefore, you’ll want to check if usage allowances match it. Sometimes they won’t.
Check Capital Gains
Finally, you’ll want to check the capital gains implications of selling your property. Sometimes, you’ll benefit from tax exclusions, but other times, you won’t.
Capital gains depend on your circumstances, so ask your accountant what you might need to pay, and how much it will be.
