This was originally published on Monday, March 2, 2015, in the Pacific Daily News. Click here to subscribe to the PDN.
Question: I will be leaving island soon and I want to sell my home. I am a bit anxious about this since I have never sold a home before. I would like to use the money from the selling of my home to help finance my move and to purchase a new home. Do you have some financial tips that could help me out?
Answer: Selling a home is just as stressful as buying one. It may even be more stressful if you are in need of the money from selling your old home to purchase your new home. There are many factors and steps that go into selling your home and it is a bit overwhelming. Take it step by step and understand everything you sign. Don’t be afraid to ask questions if you don’t understand something.
The very first step you need to take is to gather all your documentation regarding your home. If you remember how much paperwork you dealt with when you purchased the home, be prepared for more. It is best to have extra copies made and pay a little more to have them notarized.
• Deed: Your deed shows your legal ownership of your home. It contains names of the old and new owners and has the signature of the person transferring the property. It contains descriptions about your home and the lot including measurements and square footage. If you inherited your home you still should have a transfer-on-death deed or a similar documentation showing that you are the legal owner and how you came into ownership.
• Mortgage contract: The mortgage contract is the document that shows how much money is exchanged for buying the home. It also details the financial terms and conditions and the type of loan. If you still have a lien on your home you will also have to show proof that the mortgage is being paid. If your mortgage is behind on payments, that must be disclosed to all interested parties. If you have paid off your mortgage you will need documentation showing that your property is free and clear of any financial obligations. If you have a second mortgage, that should also be disclosed.
• Property tax: Gather documents that show that your property taxes are current. Some financial institutions include your property taxes with your mortgage payments. If they do, your monthly mortgage statement should show a breakdown of the bill to include how much property tax you pay. If your property tax is delinquent you must disclose that to all interested parties.
• Architectural blueprints: If you have the original drawings and blueprint of the home it would be beneficial to the next owners. If any work has been done to modify the home such as electrical, plumbing, or removing or adding to the structure, it should be disclosed as well.
• Insurance: The payment history of your homeowner’s insurance may also be needed.
• Renovations and repairs: You must disclose any improvements to the lot or the home or had major repairs to the home, or events or issues such as flooding, earthquake damage, or foundation repairs. Warranties from repairs or improvements may be carried over to the new owner.
• Utilities: Copies of your utility agreements and bills may also be needed. These records will make the smooth transition of utility hook up for the new owner.
• Renters: If you are renting out the property you are selling you should provide a copy of the rental agreement.
If you do not have the original documents, you may request for a certified copy. The more documentation you have about your home the better. Be prepared to take all these forms with you as you talk to all the parties involved.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at email@example.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.