When selling a home, many documents and disclosures are required. It can get overwhelming. That is why it is important to be sure you are working with a knowledgeable real estate agent and title company to ensure everything goes smoothly.
If you're planning to sell your home, this article will help you understand more about the association's roles and steps to a successful closing.
What Should You Disclose about the Community Association When Selling Your Home?
As you prepare to sell, your realtor and title company will ask you to provide information and sign off on various disclosures.
Most potential buyers will want to see the association's governing documents and that house improvements, like a pool or a shed, received approval during their short option period.
Your real estate agent will likely ask you to provide these as you are listing your home for sale so that they can be provided to potential buyers upon request.
Disclosure Documents
Your real estate agent or title company will likely ask you to sign various disclosures about the association throughout the sale.
However, the primary disclosure document, related to the association will likely be requested by the title company and completed by the association’s management company.
This disclosure document is sometimes referred to as a Resale Certificate, mortgage questionnaire, or Estoppel depending on the specific requirements in your area and any special requirements from your mortgage company or title company.
These disclosures will entail all the necessary information you need to inform the buyer, like the impending monthly HOA, Condo fees, or any assessments due.
The document will let the buyer know what the association might ask of them after a change of home ownership.
It should also have restrictions regarding the properties under the association. The new homeowner should understand the limits in the new home, like maintenance responsibilities and expectations, to avoid any future concerns or violations.
Financial Reports Documents
The important financial documentation that the association will likely be asked to produce with these disclosures are;
- The monthly maintenance fees and the association charges.
- For the insurance policy and condos or townhomes, the mortgage company will likely require a custom Certificate of Insurance that lists them as additional insured.
- Records of home improvements approved by the association for your home or unit.
- The current association financial statements and budgets.
- Recent meeting minutes.
- Percentage of delinquent units.
- Percentage of rented units.
- And more…
Gathering these documents and filling out these various disclosures is time-consuming and can be difficult; as a result, the management company will typically charge a fee for these disclosure documents depending on what and how much is required.
These fees are sometimes capped in various states. An average turnaround to gather this information is between 7-10 days.
There are also usually additional fees if they are requested or ordered at the last minute so be sure to communicate with your real estate agent and title company that they are ordering them well in advance and not waiting until a few days before closing to get the final disclosures ordered.
What to Bring to the Closing Table
The day is finally here, and you are ready to sell. Call to confirm with your title company that they have everything needed.
Assuming the answer is yes, be sure and carry a government-issued ID and a check to confirm routing numbers to your bank account.
Bottom Line
When selling your home, expect to have disclosures to review related to the association. . Be sure to select qualified and professional real estate agents and title companies. This will make the whole process easy and transparent.
