Selling your home? 16 legal lessons learned

Navigating the complexities of selling a home can be daunting, but armed with expert insights, the journey becomes clearer. This article distills the wisdom of seasoned real estate professionals, highlighting essential legal lessons to ensure a smooth transaction. From safeguarding mortgage documents to understanding property laws, every critical detail is addressed to guide sellers to a successful sale.

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  • Store Mortgage Payoff Letters Safely
  • Get Everything in Writing
  • Understand Purchase and Sale Agreements
  • Disclose All Known Property Issues
  • Gather Permits and Modification Records Early
  • Pay Attention to the Closing Process
  • Double-Check HOA Documents
  • Review Property Easements Thoroughly
  • Pull Proper Permits for Modifications
  • Check Title Records Early
  • Document All Decision-Makers on Deed
  • Clarify Property Boundaries Early
  • Comply with Local Property Laws
  • Disclose All Property Issues
  • Be Thorough with Legal Documentation
  • Manage Contingencies Proactively

Store Mortgage Payoff Letters Safely

I am a Massachusetts attorney and have bought and sold multiple homes, so I was shocked when the 2015 sale of my elderly parents’ home was held up when they couldn’t find their “payoff letter” (“satisfaction of mortgage”) from the bank where they had had their mortgage. They had gotten the mortgage in the 1960s and paid it off by the mid-1990s. They had used the same bank for nearly 50 years, so I thought it would not be a problem to get the letter from the bank. Boy was I wrong!

They had had their mortgage at the Rhode Island Hospital Trust bank in 1967, but that bank was bought out by Bank of Boston in 1985. Fleet Bank bought out Bank of Boston in 1999, and then Sovereign Bank bought out that branch in 2000. Sovereign Bank was bought out by Santander Bank in 2009. So even though my parents’ accounts never changed and they had a nearly 50-year relationship with their neighborhood bank, it had changed corporate ownership 4 times, and there was no record of their mortgage payoff to be found. The title at the registry of deeds had not been properly updated when their mortgage was paid off, so the buyer was worried, even though the title was clean.

The moral of the story is to treat mortgage payoff letters like cash or gold—store them in a safe place that you can remember. Don’t file them with the kinds of less important papers that you periodically throw out.

Julia Rueschemeyer, Attorney, Attorney Julia Rueschemeyer Divorce Mediation

Get Everything in Writing

In my years handling real estate disputes, I’ve seen how seemingly minor paperwork oversights can turn into major legal headaches. One surprising lesson was how verbal agreements about items staying with the house (like custom light fixtures or window treatments) led to costly disputes after closing. I always advise my clients to get everything in writing, even things that seem obvious, because memory gets fuzzy and interpretations can vary once money is involved.

Ron Wright, Founder, Horn Wright, LLP

Understand Purchase and Sale Agreements

Real estate deals live or die by what’s in writing, and the purchase and sale agreement is the foundation. Early in my career, I realized that even small misunderstandings about terms—like inspection timelines, contingencies, or who’s responsible for specific repairs—can lead to big problems down the road. Sellers need to understand what they’re agreeing to fully, and it’s my job to make sure they’re crystal clear on all the details.

What surprised me is how nuanced these contracts can be when unique situations arise. For example, handling title issues can be a curveball. Sometimes, there are liens or disputes over ownership that sellers weren’t even aware of until they’re under contract. I’ve learned that partnering with a great closing attorney is key to navigating these situations. Their ability to resolve these legal hurdles efficiently can mean the difference between a smooth transaction and one that falls apart.

However, ensuring deadlines are met requires the most careful attention. Missing something as simple as a contingency deadline can expose the seller to risks they didn’t bargain for. It’s always a balancing act between keeping the process moving and protecting the client’s best interests. If there’s one takeaway, selling a home isn’t just a financial transaction—it’s a legal one too. That’s why I’m so focused on guiding my clients through every step, ensuring they’re informed and protected, and making the process seamless.

Justin Landis, Founder, The Justin Landis Group

Disclose All Known Property Issues

One of the most important lessons I’ve learned about the legal aspects of selling a home is the significance of full disclosure. I think many sellers underestimate how critical it is to disclose any known issues with the property, like past water damage or structural repairs. This isn’t just about being honest—it’s also a legal requirement that protects you from future lawsuits.

What surprised me most was how detailed and specific disclosure laws can be. For example, in Ontario, even something like a neighbor dispute could be considered relevant. Early in my career, I worked on a sale where the seller didn’t disclose a previous pest infestation, assuming it wasn’t important since it was resolved. The buyer later discovered this and threatened legal action, which became a stressful and expensive issue to resolve.

This taught me to always advise clients to document everything and consult a lawyer when unsure. It’s a small step that can save huge headaches later.

Faiza Ahmed, Real Estate Broker, PropertyMesh

Gather Permits and Modification Records Early

Working in Los Angeles, I was surprised by how many sellers didn’t realize they needed written documentation for every property modification they’d made over the years. I once had a client who nearly lost a sale because they couldn’t prove their garage conversion was properly permitted, which taught me to always start gathering permits and modification records early. Now I tell every homeowner to create a detailed property history folder the moment they start thinking about selling.

Do Duong, Founder, Fair Sale Homes

Pay Attention to the Closing Process

One important lesson I’ve learned about the legal aspects of selling a home is just how crucial the closing process is. The closing is when everything comes together, but it’s also when mistakes can be the most costly. Even though everything seems smooth leading up to that point, the legal side of transferring ownership, ensuring the title is clear, and confirming all the paperwork is in order takes precision. I’ve learned firsthand that skipping over details or assuming something is already handled can lead to headaches. It’s not uncommon for sellers to overlook things like outstanding liens or unresolved property tax issues, thinking it’ll be no big deal, but they can hold up the sale or cause major delays.

What really surprised me was how much attention you have to give to the title work. I always assumed it was just a formality, but it’s not. There can be surprises in the title search that need to be cleared up before you can close. Whether it’s something as simple as an unresolved dispute over property lines or a more complex issue like a title defect, these things can become roadblocks. It was eye-opening to realize how much detail and coordination is involved in clearing up these potential issues.

Over the years, I’ve learned that having a great attorney or title agent by your side is non-negotiable. They help ensure that the legal side of the transaction is clean and that nothing unexpected derails the deal at the last minute. It has required careful attention, but it’s also what makes all the difference between a smooth sale and a deal that falls apart.

Betsy Pepine, Owner and Real Estate Broker, Pepine Realty

Double-Check HOA Documents

Selling my second home taught me how vital double-checking homeowner association (HOA) documents is. A buyer challenged fees listed in my HOA paperwork, which delayed the sale and almost caused the deal to fall apart. What shocked me was how easily such small errors could spiral into major legal disputes. Reviewing every document with my attorney made all the difference.

David E. Preszler, Partner, Preszler Injury Lawyers

Review Property Easements Thoroughly

The biggest legal surprise I encountered was learning how differently Wisconsin handles property easements and how they can affect a sale—I once had a deal fall through because of an undisclosed shared driveway agreement. Now I make it a point to thoroughly review all easements during my initial property assessment and discuss them openly with potential buyers, which has helped build trust and prevent last-minute contract issues.

Carter Crowley, Owner, CB Home Solutions

Pull Proper Permits for Modifications

During my first year flipping houses, I learned the hard way about the importance of pulling proper permits when I had to redo an entire electrical system that wasn’t up to code. The local building inspector actually became a great resource, teaching me that it’s way cheaper to do things legally the first time than to fix violations later. Now I maintain a detailed checklist of required permits and inspections for every project, which has saved me countless hours and thousands of dollars in potential legal issues.

Jeremy Schooler, Real Estate Investor, Kitsap Home Pro

Check Title Records Early

When selling a home, I thought everything was in order, only to find out during the title search that there was an old lien from a contractor I had hired years ago. I had completely forgotten about it, and it nearly derailed the closing. It took weeks to track down paperwork and get it removed, which delayed the sale and added unnecessary stress. I always recommend sellers check their title records long before listing their home, so they don’t get blindsided.

Gordon Hirsch, Founder and Managing Attorney, Hirsch Law Group

Document All Decision-Makers on Deed

I’ve learned that having all decision-makers properly documented on the deed is absolutely crucial after a messy situation where an ex-spouse showed up claiming partial ownership rights at closing. We now require sellers to sign an affidavit about marital status and property ownership history early in the process, which has helped prevent last-minute legal complications.

James Heartquist, Owner, Modern Property Solutions

Clarify Property Boundaries Early

Contracts can be more complicated than people expect, and small details can cause big delays. One issue that often comes up is unclear property boundaries. I once worked with a seller who assumed their fence was on the legal boundary, but a buyer’s survey revealed it was actually encroaching on the neighbor’s land. It became a last-minute headache that could have been avoided with a title check early on.

Disclosures are another area that requires careful attention. Sellers need to be upfront about known defects, renovations done without permits, or any legal disputes involving the property. A buyer pulling out due to undisclosed issues can mean wasted time and lost offers. I’ve seen sellers try to avoid mentioning minor defects, only for them to come up in the buyer’s inspection, making the deal more stressful than it needed to be.

Legal requirements vary by location, but having all paperwork in order before listing saves time and avoids last-minute surprises. A little preparation goes a long way.

Sebastian Wade, Real Estate Consultant, Eden Emerald Buyers Agent

Comply with Local Property Laws

One important lesson I learned about the legal aspects of selling a home is the significance of understanding and complying with local property laws, especially when dealing with inherited or converted properties. Once, I evaluated a house that had been transformed from a single-family home into a two-flat property, raising zoning and legal considerations that required careful attention. What surprised me most was how these changes impacted the property’s marketability and highlighted the need to verify legal compliance before moving forward with a sale. This experience taught me to conduct thorough legal due diligence to avoid complications later.

Don Wede, CEO, Heartland Funding Inc.

Disclose All Property Issues

Effectively, sellers want to get a fair price for the home, while buyers are looking to purchase what is rightfully theirs. One thing that has come to my attention is the level of attention that has to be given to legal coverage in matters concerning a house that is on sale. Aspects that must be covered include water damages as well as pest issues. Failing to disclose this could lead to lawsuits in the future. The state laws that are able to be achieved astound me. In particular, there are some states that expect sellers to even state things like neighborhood disturbances while other states are much more lenient.

A particularly fascinating case was one in which a seller failed to disclose that the house suffered a roof repair. Although this did not disrupt the sale, the buyer had to go through extensive inspections. This issue resulted in a delay to closing and the seller ended up paying in additional concessions. All parties involved in these deals must seek the expertise of an attorney who specializes in selling homes to lessen the chances of legal battles. By paying attention to these factors, the seller does not only gain legal advantage but also faith from the buyers.

Jonathan Ayala, Owner, Hudson Condos

Be Thorough with Legal Documentation

One important lesson I learned about the legal aspects of selling a home is the importance of being thorough and detail-oriented. There are many legal requirements that must be met when selling a home, and any mistakes or oversights can lead to serious consequences for both the seller and the agent.

One aspect that surprised me was how much documentation is involved in the process. From disclosure forms to contracts and closing documents, there are numerous legal documents that need to be completed accurately and in a timely manner. This requires careful attention to detail, as even small errors can result in delays or legal complications.

John Medina, Chief Executive Officer, John Medina Buys Houses

Manage Contingencies Proactively

When I sold my home, I was surprised by how much managing contingencies influenced the entire process. Contingencies are conditions that must be met for the sale to proceed, and they can range from getting a home inspection to securing a buyer’s mortgage approval. What I learned is that each contingency needs careful handling because they can extend the timeline of the sale or even cause it to fall through. When we had a contingency for the buyer’s home sale, we had to be proactive in communicating with all parties involved to make sure that everyone’s timelines aligned.

This taught me that effective contingency management isn’t solely about waiting for conditions to be met. It’s also about actively facilitating those conditions to keep the sale moving forward. This means regular updates, clear communication, and sometimes negotiating extensions or adjustments to the original agreement to accommodate unforeseen delays or changes. Understanding and managing these contingencies effectively makes the difference between a smooth sale and a prolonged, stressful ordeal.

Gerti Mema, Marketing Manager, Equipment Finance Canada

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