Listing and Sales document explanations
When listing your property there are a number of documents you will be asked to sign. I have listed them below and provided an explanation for each. If you have questions ask before you sign.
- Listing Contract: This document is the actual agreement between the owner and the agent to sell the subject property. This is a binding agreement that gives the agent the right to sell your property under the terms set by the owner.
- Sellers Property Disclosure Statement (SPDS): A full disclosure of the property completed by the seller explaining everything the seller knows about the property, for the benefit of the buyer.
- Profile Sheet: A detailed description of the property for sale, including all features and amenities the property has, 3 car garage, pool, gated community etc. This information is for the MLS posting.
- Agency Disclosure: This document states who the agent is working for, Buyer or Seller or Both
- Lead Based Paint Disclosure: Generally only for homes build in 1978 or older but you may be asked to sign one anyway just to make sure everyone is aware your house doesn’t have it.
- Affiliated Business Disclosure: A list of all companies that your agent’s company is connected with in one way or another.
- Market Conditions Advisory: This document holds harmless the agent in the event that if the property you buy or sell goes up or down after you close the deal. An example is that if you buy a house for $150,000 today and next month the market drops to $100,000 you can’t hold the agent accountable for knowing what would happen to the future market.
- Short Sale Listing Agreement: Only if you are Short Selling, this document advises that you need approval from your lender to agree to sell the property at the price offered before a deal can be consummated.
- Short Sale Advisory: Like the Buyers Advisory this form gives you a lot of resources to search to answer any questions you may have.
- Authorization to Release: If you are listing your property through a short sale you will need to give this authorization to your agent to negotiate with your lender to accept less than the mortgage amount as the sales price.
- Short Sale Package: There is a complete Short Sale package of information required by the lender that is prepared by the Seller to justify why the Lender should short sell your property.
Now if you are buying a property the following documents pertain to you:
- Purchase Contract: This is the actual agreement that you complete to make an offer on a property. If the sellers sign, you have a binding contract
- Agency Disclosure: Same as above
- Affiliated Business Disclosure: Same as above
- Market Conditions Advisory: Same as above
- Counter Offers: Only in the event the seller changes your offer and adds or subtracts something to the deal. If you agree it becomes part of your new deal, if you don’t the deal can go away.
- Loan Status Report (LSR) or Proof of Funds, this document is needed before any offer can be presented.
It shows that a lending institution has agreed to loan you the money to make your purchase. (Doesn’t apply if you pay cash)
- Buyers Advisory: This document provides a lot of information, websites and government organizations that will give you a resource to search for any needed documents or contacts.
- Lead based Paint Disclosure: If it applies. Only on homes build in 1978 or before.
- Sellers Property Disclosure Statement (SPDS): If you receive one completed by the seller you will need to sign it, if not you will need to sign a blank copy showing you are aware that the seller is giving you no information.
- As Is addendum: In many cases you may purchase a property that the seller is selling and providing no information or warrants. This addendum states what you see is what you get.
- HOA addendum: Only if an HOA exists, this form should disclose all the information related to the HOA.
- Pool Disclosure: Only if a pool exists, this form describes the safety requirements related to having a pool.
After your contract Offer is agreed upon and signed by the seller the following are things that you must do to complete the transaction.
- Deposit an earnest money check to the Title Company to open escrow.
- You will receive a preliminary title report (a search of records to show any encumbrances)
- Insurance History Report (CLUE: Comprehensive Loss Underwriting Exchange) Report provides dates of claims, insurance company(ies) involved, the type of policy, whether loss was related to a named catastrophe (hurricane, etc.), location of the loss (on or off property), the amount paid and cause of the loss.
- Home inspection Report or waiver, you have 10 days from signing to complete
- Termite report or waiver
- Buyers Inspection and Sellers Response (BINSR) an inspection by the buyer presented to the seller requesting any repair or replacement. Seller can comply or not.
- Final walk thru.
Remember that in most cases an agent isn’t an accountant, attorney or building inspector so you are advised to seek professional advice when entering into any binding contract.