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Documents required when buying or selling a property

On Behalf of | Apr 25, 2020 | real estate transactions | 0 comments

Michigan’s Seller Disclosure Act requires a homeowner to reveal information about his or her property’s condition to a potential buyer. If a seller fails to disclose a known material defect, a buyer has six years from the closing date to file a legal action alleging fraud.

A buyer inspects a property for any visible defects before making a purchasing decision. While negotiating a deal, he or she may discuss several matters relating to a property with a seller, such as plumbing or roofing issues. The buyer’s confidence in the property and its value generally determines whether a sale occurs.

Typical real estate contract details

A real estate contract generally describes the terms related to transferring a deed. Clauses include the sale price, escrow account details and conditions for canceling the transaction. It also identifies the two parties involved, the property’s legal description and any contingencies that must occur before the closing takes place. Some mortgage providers require an inspection, such as for pests and termites. 

Michigan’s written statement of disclosure requirement

During the closing, a seller must provide a written disclosure form representing his or her knowledge of the property’s condition. Although a seller may have revealed problems while discussing a transaction with the buyer, Michigan requires a written statement.

The Michigan Legislature’s website provides a sample checklist of the items required to inform a buyer of a property’s conditions. A signed disclosure form, however, does not replace a purchase and sale agreement created between the buyer and seller.

Final review

During the closing, the two parties and their legal teams go through a final review of all the documents. If last minute issues do not stall the sale, an exchange of funds for the property’s deed occurs. Discovering an oversight or an error in the paperwork before the closing can help avoid post-transaction problems for both sellers and buyers.