While house transactions involving cash settlements are often much simpler and quicker than the traditional home sale, it doesn’t mean that there is no paperwork. Just like any large transaction, both the seller and the home buyer are required to review and sign important documents.
On the day of the cash settlement, the seller will need to take the following documents with them:
- A government-issued ID that has your full name and date of birth.
If you have paid off your home loans and there are no overdue balances, take the title deed with you as proof of ownership.
- When it’s time to settle everything, the buyer will also need access to the home. It means that you should take all the security items including house keys, garage remotes, access codes, and alarm systems if any.
- If you still need to pay debts such as property tax, bank loans, and other outstanding bills, you will be required to clear off these before the final settlement takes place. Usually, your real estate agent will let you know how much additional cash you need to bring with you before closing the deal.
Once you have all the proper documents to settle the cash transaction, you will review and sign the following documents:
- Final Closing Instructions: These are documents from your escrow company offering an in-depth step-by-step closing cost of everything involved. Before signing, just make sure you double-check all the entries in the list. Take a calculator with you just to ensure that you’re not charged anything extra.
- HUD-1 Settlement Statement: While the escrow company takes care of the financial costs of the sale settlement, the HUD-1 statement adds to the list by including transaction costs such as sales prices, pay-off balances, and pro-rated tax. It’ a Federal requirement that every seller must fulfill; therefore, pay close attention to the numbers because you will need to present these when filing tax.
- Title Deed: It’s the main document that tells authorities that the seller has transferred the property to the buyer, who is officially the new owner of the house.
- Loan Payment: This is the document offering details of any pending loans that you need to pay for the house. The escrow company will also sign these letting officials know that the escrow company will pay the loan on your behalf.
- Bill of Sale: If there are any physical items or furniture that are left in the house, the bill of sale will list all these items.
- Mechanics Liens: Before closing the deal, the seller will need to ensure that there are no liens from the property contractors or laborers. This statement ensures that you have paid everyone including third-parties that have worked on the house.
- Misc. Documents: Besides these formalities, you will also need to sign a statement of closing costs and statements of information.
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While this is certainly not an exhaustive list, the list has all the important items that the seller needs to sign before handing the property to the new owner. Go through the list again if you need to because cash transactions often close within days, which means that you need to prepare everything before signing up papers.
If you think you can handle the sales, then it’s time to look for a buyer that can take the complexity out of selling a house by arranging everything for you without the hassle of doing things yourself.