Legal Overview of Selling a Home

Most real estate sales are made through a licensed real estate agent (or broker) with whom the seller has listed the property. If you are the seller, the broker is your agent and acts as an intermediary between you and potential buyers. Generally, the broker acts based upon a written listing agreement and will receive a commission when the house is sold.

Real estate sales usually begin with the seller and the buyer signing a contract or agreement of sale (usually called the purchase and sale agreement). Other than the deed, this agreement is probably the most important document covering the real estate transaction. The agreement outlines the terms and conditions of the sale, as well as any remedies for damages in case either party backs out of the deal.

After both parties sign the purchase and sale, the buyer generally becomes the "equitable owner" of the property. This means that unless the agreement says otherwise, the buyer assumes the risk of damages or destruction of the property after the agreement has been fully signed. However, as seller you should maintain insurance on the property if the purchase and sale agreement states that you assume the risk of loss.

Before the actual sale or "closing," you will have to clear the property of any liens or other encumbrances. You will also have to make any necessary repairs and otherwise get the property ready to be handed over to the buyer.

The closing is a very important step in the sale. It's when the real estate transaction is finalized, with the buyer receiving the deed and possession of the property and you receiving the purchase money. At closing, the buyer, seller, attorneys, real estate agents, a representative from the lending institution and a representative from the title insurance company meet to review and sign all the necessary documents and proceed with closing.

Once the closing has ended, the buyer receives his or her deed, and possession of the property. You receive the money any money left over after any outstanding loans and all other expenses have been paid for.

That's a general overview of the process. Read these sections for more information on:

Listing Agreements
If you hire a real estate agent to sell your home, you will have to sign a listing agreement. There are many types of listing agreements, filled with standardized legal language that is important to understand.

Getting Out Of A Bad Listing Agreement
You may want to get out of a listing agreement. Here are some reasons why, as well as ways to do it.

Negotiating To Sell Your House
Understanding purchase and sales agreements; explanation of contingency clauses and how to use them; and counter offering when a potential buyer's bid isn't enough.

Considering A "Lease Option" To Help Sell Your Home
Leasing is an alternative to selling your home in a weak market. Here's how it works and the pros and cons of the lease option.

The Closing: The Final Step In Selling Your Home
Finalizing the details and executing the agreements of the sale; explanation of escrow closing.