Legal Requirements When Buying or Selling Real Estate Properties

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Buying or selling real estate is one of the most important transactions anyone can make. It’s not just about purchasing another home—it’s investing thousands of dollars in your biggest asset, so it’s crucial to be fully aware of the legal requirements before you sign on the dotted line.

If you don’t want to be bothered with all the back and forth and paperwork filing, you can hire a firm handling court filings and other legalities. This will make the process faster and easier for you.

Here are some legal documents that you need to prepare before buying or selling a house:

Stamp Duty

Stamp duty is a state tax that needs to be paid when certain documents are presented before the State Revenue Office. There’s no standard rate for stamp duty, so not only does it vary from one state to another, but there can even be variations depending on whether you’re purchasing an investment property or your primary residence. You must factor in the stamp duty when pricing the property so that you have an idea of how much it’ll cost.

Title Deeds

Title deeds are legal documents issued to certify ownership of a property. While these are typically given when you buy or sell a house, they can also be transferred among family members.

Transfer Notes

These supporting documents provide essential information on the transfer of property. They include details such as the consideration for the sale, date of purchase and registration number, and names and addresses of the seller and buyer (and sometimes their occupations).

Money Matters

You’ll need to have your deposit ready, plus three to six months’ worth of mortgage repayments. When you apply for a loan or finance the purchase, these will be needed.

Tax Clearance

If you’re required to pay stamp duty, there needs to be a valid tax clearance on the property before it can be transferred into your name. You will also need to prove that you’ve paid your taxes on time.

Title Insurance

Before you close the deal, it’s best to look into title insurance. An insurer issues this after it has searched the property’s records, so there won’t be any surprises once you finally get the keys.


This is required when the money for the down payment changes hands. This person attests to the agreement between both parties and can also provide evidence if there are any disputes in the future.


Even though you’ve already had your property inspected, make sure to get it surveyed again before signing any documents. You’ll need to submit a copy of the surveyor’s report, which should be done within 30 days before you apply for stamp duty.

Home Insurance

You can’t secure your property if it isn’t insured. Taking out home insurance is not just about protecting yourself from damages or losses that may occur—it’s also about protecting your investment. So you can’t lose thousands of dollars if there’s a problem.

Exchange of Contracts

Once the buyer and seller have signed the contract, both parties will need to deposit money into an escrow account until the due date for settlement—which is usually 30 days but varies depending on the state and property.


This is when the property changes hands from the seller to the buyer. Make sure this has been arranged beforehand so that no one misses out on a day of work.

Change of Ownership

After you formally take over ownership, you’ll need to notify the proper authorities about the change in ownership and remove the previous owner’s details in the land registry.

Removal of Mortgage

You can’t be paying monthly installments forever! All you need to do is send your lender the release document to cancel out all future payments and remove any hold on your property. You’ll then receive the original title deeds back, where both names are removed, and your name is the only one on the document.

Final Inspection

This last step is to check if everything is in order and all defects have been corrected. You can then hand over all keys to the new owner.

Receiving of Keys and Deed
handing out keys to couple which is the buyer

When both parties are satisfied with everything, you can sign the deed of conveyance to hand over all keys and transfer the property.

Additional Requirements

There may be other requirements depending on your location or state law. For example, in the State of New York, you will need to provide a copy of the contract and pay the transfer tax (which is 0.4 percent of the property price). You may also require a check for water or sewer, depending on where you live. Make sure you consult your lawyer for more details.

Final Thoughts

It may seem complicated, but the entire process is much easier when you have a real estate agent by your side. And when it comes to all those legal requirements, a good lawyer can help you with that.

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