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Be a Spectacular Seller


There may be many things that your real estate agent asks you to "do around the house" in order to get ready for showing. In addition to making your house look it's best, there is other homework a Seller needs to complete to be ready to accept a contract. Much of this involves disclosures either required by law or expected by potential Buyers. Many of the documents described in this article are documents created by the Georgia Association of REALTORS®(GAR®). If your agent is not a REALTOR®, your contract forms may be different.

1. Seller's Property Disclosure Form or Seller's Disclosure of Latent Defects

The GAR® Seller's Property Disclosure Form is a common form listing information a Buyer would want to know about the property. It also protects the Seller by disclosing possible issues or quirks up front so that Buyers are aware at the beginning of the process. If you answer yes to any of the questions, provide an explanation in the space provided. If you have no knowledge of an issue, the answer to the question is NO. When in doubt, disclose and explain. Some questions, like water intrusion, are asked as to the present and the past. The Seller should disclose a past problem and provide an explanation of how the issue was resolved. The Seller's Property Disclosure contains a Fixtures Checklist. Take care in completing this form. All of the items listed must remain with the property and only the items listed may remain. If the Seller prefers to leave something not listed rather than move it or discard it, the Buyer must agree for it to stay with the property. Sellers will sometimes decide at a later date to leave a basketball goal or old paint that would be difficult to dispose of properly. These items are on the list and should only remain if the Seller checked that they would remain. A fixture is commonly understood to be something that is permanently attached to the property, but the GAR® checklist has gone beyond that definition to include anything that may or may not stay with the property so that the Buyer and Seller are on the same page regarding those items being sold with the property. It also takes into account recent changes, such as car charging stations, alternate energy systems, systems which may be under a lease, security cameras, and the "Internet of Things," all of which may be highly portable. If the Seller is taking the Nest thermostat or the Ring doorbell and putting the old analogue equipment back on for the sale, they need to change those out before the Buyer sees the property or make explicit notes in the disclosure about those items. If the Seller is leaving them, they should also make a note about the smart home items remaining as a potential selling point. It is helpful for the Seller to locate the manuals in their files or online so that the Seller and the Buyer know how to remove the Seller's access and create the Buyer's access. The Seller's Disclosure of Latent Defects is a relatively new form in Georgia. It is something created by GAR® for Sellers who do not feel they are familiar enough with their property to answer the questions in the Seller's Property Disclosure Form. Even if there is no disclosure filled out by a Seller and/or the Buyer buys the property as-is, Georgia court case law requires that Sellers disclose any latent defects in the property. A latent defect is anything that the Buyer or the Buyer's inspector could not find upon a reasonable inspection of the property. It is those items that are hidden from inspection but known to the Seller. This form allows the Seller to confirm there are no latent defects or gives them a way to notify the Buyer if there are latent defects. It also includes the Fixture Checklist which is exceptionally helpful as explained above.

2. Lead Based Paint Disclosure

The Lead Based Paint Disclosure is required under federal law for all properties built prior to 1978 since those homes may contain lead. It might also include homes built after 1978 but used "reclaimed" items from old construction for architectural effect. The form should be filled out and signed by the Seller and signed by the Buyer prior to going under contract. This means that the Seller should complete this document in advance and provide it to prospective Buyers so that they can include it in the contract documents when they are making the offer. Failure to include this form can result in fines of up to $16,000 by the Environmental Protection Agency.

3. HOA and Condo Disclosures

The Community Association Disclosure (commonly called a CAD) is the form that gives the Buyer information about any HOA or Condo Association. It also provides the closing attorney with the contact information to order an HOA letter when you go under contract. It includes the costs to live in the Association and fees that will be charged by the Association or their management company to provide a Closing Letter. A Closing Letter shows whether the Seller is up to date and details the costs due to join the Association and transfer the ownership records to the new owner. If the Seller does not properly disclose the transfer, initiation and administrative fees due to the management company or the Association, the form requires the Seller to pay the fees. The types of costs that are important to know are:

  • Initiation Fee. This fee may also be called Capital Contributions or some other name. This is a fee due once at the purchase of the property and is paid to the Association. They are popular since the people voting to add the fee will never have to pay the fee. It is a way for Associations to shore up the finances of the Association or build a capital fund for future needs. The Seller may not be aware of the fee if it was passed during their ownership and they missed the meeting when it was passed. They can be hundreds or thousands of dollars.

  • Transfer Fees. These are fees charged to the Buyer and/or the Seller to transfer the ownership. They are paid to the management company.

  • Administrative Fees. This is a catch all for any other fees charged by the management company for any number of things.

  • Closing Letter Fees. These are fees paid by the Seller in order for the management company to provide the closing attorney with a clearance letter. In order to issue a title policy to the Buyer and, if applicable, the lender, the closing attorney must receive an HOA letter from the management company or a member of the board if they do not use a management company. Many management companies now require these fees to be prepaid upon ordering. The closing attorney will complete the request for the HOA letter and provide the Seller with the link to pay for the letter. The GAR® contract requires the Seller to pay for the letter within 2 days of the closing attorney sending the payment link. It also explains that failure to do this timely may result in additional fees or a delay in the closing. Many management companies will require a rush fee if they are not given a certain number of days to provide the letter. The lender will need this letter in advance to provide the Borrower with final numbers so it is important that the HOA letter be received well in advance of the closing.

In order for the Seller to correctly disclose the fees and avoid having to pay fees that would normally be paid by the Buyer, the Seller should contact the HOA and request a list of the fees. Relying upon memory or guessing to complete the form opens the Seller up to liability for the fees. Whenever possible, the Seller should get the fees from the HOA in writing. This helps if, as sometimes happens, the Seller is given incorrect information. The closing attorney will be required to collect all fees charged on the HOA letter. The Seller cannot write "all fees" or "N/A" or anything similar in the fee disclosure on the CAD. If the Seller puts anything in the blank other than a dollar amount, the Seller will pay all of the Buyer's Transfer, Initiation and Administrative fees at closing.

4. Making Sure the Seller Has Clear Title to Sell

Whenever there is doubt, the Seller should confirm who owns the property. The Seller's agent can get assistance from a closing attorney in helping to determine exactly how title is vested. Potential questions arise from:

  • Divorce. In a perfect world, the divorce proceeding will resolve the property ownership. The divorce settlement will state what should happen with the property but may require someone sign and record a deed to actually make the change to the ownership. Typically, no one prepares a deed or the parties attempt to handle the deed preparation and recording themselves. These DIY deeds that are pulled from the internet do not always meet the signing and notary / witness requirements in Georgia. If the title is not transferred or not transferred correctly, the closing attorney will require a new deed. This can be complicated if the person who needs to sign the deed is not willing or able to do so for a variety of reasons. Knowing this in advance provides more time to resolve the matter.

  • Death. When an owner of the property has passed away, title may transfer automatically if the property is owned with another person as Joint Tenants with Rights of Survivorship. The closing attorney only needs a copy of the Death Certificate to file in the county records with an affidavit. If the deed does not have Joint Tenancy or there was only one owner, probate is almost always required. Probate is a legal process which takes place in the county where the deceased person died to put someone in charge of settling their estate. It can be relatively simple or more complicated based upon whether the person had a Will and the family situation. Probate filing can be done without the assistance of a probate attorney, but using a probate attorney familiar with the local court with jurisdiction will normally aid in completing the process more quickly.

  • Bankruptcy. If the Seller is currently in bankruptcy, the property may be tied up in the process and will require action by the Bankruptcy Court. If there is a bankruptcy in the past, this may still impact the debts the Seller must pay at the sale of the property.

5. Disclosure and Communication with the Real Estate Agent and Closing Attorney

Whether it is completing forms or confirming title to the property is free and clear of issues, time is everyone's friend. The sooner this work is completed, the better the chances of closing on time. It is important that the Seller tell their Real Agent at the beginning of the listing process about any potential title issues. The real estate agent may be able to answer some questions and will direct other questions relating to the title to a knowledgeable closing attorney. We are here to answer questions and help resolve issues so that the closing process is as seamless as possible.


Published by Cheryl Conner King Closing Attorney | Partner, Thomas & Brown | Owner, King Title Group | Podcaster | REALTOR®

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