State of Minnesota
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Attorney General
Lori Swanson

Minnesota Attorney General's Office

1400 Bremer Tower
445 Minnesota Street
St. Paul, MN 55101

(651) 296-3353
(800) 657-3787

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Home Sellers Handbook


Itís the moment that youíve been waiting for. You have a purchase offer on your home! Should you accept it? Deciding whether to accept an offer and setting the terms of the sale are often the hardest parts of the selling process. But theyíre also the most exciting. You may accept the offer, reject it or make a counteroffer by changing some of the terms. Keep in mind that the buyer is trying to get the lowest price possible.

A buyer will submit a purchase agreement with it, the buyer should include some earnest money ó part of the down payment ó which is refundable if you reject the offer. The purchase agreement will include::

  • The price offered.
  • How the buyer will pay for the home (loan, down payment and earnest money)
  • The date the purchase is to be completed.

Reviewing The Offer

If you receive an offer, review the following to decide whether or not to accept it:

  • The bid price. Is it within three to five percent of your asking price? If so, most real estate agents will tell you itís a good offer and urge you to consider accepting it ó unless you have a hot prospect you think will bid higher.
  • Ability to pay. A buyer or real estate agent should present you with a lender qualification letter that shows the buyer is qualified to pay for the home.
  • Contingencies. Is a buyer making an offer contingent on selling his or her home, the results of an inspection, or something in your house being fixed? Itís up to you to decide if the buyer is asking too much. Weigh the contingencies against the bid price.

As a seller, you many want to add contingencies, too. Here are a couple to consider:

  • Loan Approval. Purchase agreements can be made contingent on the buyer being approved for a loan within a specified period of time, usually 30 days or less. If you are going to help finance the home, put the exact terms of your contract in writing, too.
  • Property. Both the buyer and seller benefit from putting all agreements about the property in writing. For example, if the buyer will buy the property only if the roof is repaired or the washer and dryer come with the home, include this in the agreement. Be sure to include in the purchase agreement the maximum price youíve agreed to pay for repairs.
After having their home on the market for a month, the Klines hadnít received any offers. Maybe they overestimated the market value of their spiffy master bed and bath. Once they dropped the price closer to what other homes in the neighborhood were selling for, they had better luck. The new listing price of $185,000 drew more interested buyers. Gloria Slivers offered the Klines $183,000 contingent on selling her home. The Klines decided to accept the offer ďon contingency.Ē Their purchase agreement spells out that they can continue to market their home while Gloria tries to sell her house. If an offer better than $183,000 or a noncontingent offer comes along, the Klines must go to Gloria and give her the opportunity to remove her contingency.

The Arbitration Agreement: To Sign Or Not To Sign?

If you decide to accept a bid on your home, you may be asked to sign an arbitration agreement with your buyer. You donít have to sign it, and will want to consider the pros and cons carefully.

So what is arbitration? In simple terms, itís a system for resolving disputes among buyers, sellers and agents concerning the material facts of the property without going to court. Disputes are sometimes simple misunderstandings (the buyer thought the washer and dryer came with the house, but the sellers didnít). Problems can also be more complex. If you canít agree on a solution with the buyer or agent, youíll have to go to court or hire an arbitrator. If you sign an arbitration agreement, however, you may give up your right to use the court system to resolve the dispute.

The arbitration envisioned in the typical arbitration agreement is a system that was developed by the National Center for Dispute Settlement (NCDS) and the Minnesota Association of REALTORSģ (MAR) to deal with real estate disputes. Their arbitrators have backgrounds in law, real estate, architecture, engineering, construction or other related fields. An arbitrator will hear disputes between buyers, sellers and real estate agents. Arbitration is usually held at the home site.

The buyer may be unwilling to sign the agreement, however, because of the administrative fees required for arbitration under the NCDS/MAR system. The cost of arbitration may exceed $3,750, depending on the amount of the claim, number of parties involved, or the choice of a single arbitrator or a three-member panel. A schedule of fees as well as additional information is available on the Minnesota Association of REALTORSģ website at

If you donít sign an arbitration agreement, many smaller disputes can be resolved quickly and inexpensively in Conciliation or ďSmall ClaimsĒ Court. Judges in Conciliation Court can decide claims up to $10,000. This amount increases to $15,000 on August 1, 2014. To have your case heard costs about $55 to $65. You may also appeal the Conciliation Courts decision, however, it is extremely difficult to appeal the decision of an arbitrator and arbitrators arenít bound by legal rules.

Sellers Can Not Discriminate Against Buyers

The Civil Rights Act prohibits you from rejecting an offer based on race, religion, gender or national origin. The Fair Housing Amendments Act adds that you cannot discriminate due to disability (mental or physical) or familial status (families with children under age 18). The Minnesota Human Rights Act also prohibits discrimination due to color, creed, marital status, status with regard to public assistance and sexual orientation.

What Does Your Buyer Need From You?

Did you think you could just sign on the dotted line, take the money and run? Selling your home isnít quite that easy. You need to scrounge through your file cabinet for the abstract or ownerís duplicate certificate of title. If you donít have an abstract or duplicate certificate, check with the title company that assisted you when you purchased or refinanced the home or check with the county recorder or registrar of titles.

Before signing an agreement to sell or transfer your property, state law requires you to make, in good faith, a general disclosure about anything that may adversely affect the use or enjoyment of your property in writing. Make sure that all disclosures about the physical condition of the property have also been made.

After you get the necessary papers to your buyer, the buyer and the lender will then have your home appraised, the title examined, and the loan approved. If these tasks arenít completed by the closing date, your purchase agreement may be null and void unless the parties mutually agree to extend the agreement. You should be aware that in Minnesota there is a statutory procedure for cancelling a purchase agreement if the purchase agreement does not terminate according to its terms.

Title Matters. In Minnesota, real estate records are kept in the county where the property is located in either the Office of the County Recorder for abstract property or in the Office of the Registrar of Titles for Torrens or registered property. Abstract property records trace back to the U.S. Government Survey in the mid-19th century. An owner of abstract property usually has an abstract of title, which is a compilation of all entries in the index regarding the property. Torrens or registered property is a system that relies upon a certificate of title maintained in the Office of the Registrar of Titles for each piece of registered property.

If you own abstract property, the purchase agreement will usually require you to furnish the buyer or the buyerís title company with your abstract of title. The purchase agreement may, however, permit you to provide a commitment for title insurance instead of an abstract of title. If you own Torrens or registered property, all that you need to do usually is furnish the buyer with the number of your certificate of title.

To sell your home, title problems must be cleared up. If any problems appear in the title records, youíll need to hire a closer or real estate attorney to take care of them. Here are common problems you may need to address:

  • Unpaid mortgage loan: An abstract sometimes shows the existence of a mortgage by a former owner. If the mortgage was paid off, but the lender didnít provide a release or the former owner failed to record the release, a new release will need to be obtained and recorded.
  • Lien by spouse: If you are divorced or in the process of getting divorced, your spouse or exspouse may put a lien on your property. Perhaps you owe him or her part of the equity from the house sale, or perhaps you owe other payments, such as child support. You may check with his or her lawyer to clarify the terms for releasing the lien.

Truth-In-Housing Report. Some Minnesota cities require a seller to provide the buyer with a Truth- In-Housing Report, which may also be called a code compliance report. Check with your city to see if you must provide such a report. If so, you must have an inspector check your home for obvious defects. These can include problems with plumbing, heating or cooling systems; dampness in the basement; or an unstable foundation. You must disclose the results of these inspections.

Sellerís Property Disclosure Statement. Real estate agents can provide you with this form for reporting the condition of your home. This disclosure supplements statements about the condition of your home made in the purchase agreement.

In most arms-length transactions, you must disclose any information you have about the property that could significantly affect the buyerís use of the property, unless the buyer waives this disclosure in writing. Your disclosure must be in writing and can be provided to the buyer or the buyerís real estate agent. A buyer can file a lawsuit against a seller for damages caused by violation of this law within two years of the closing date. A seller is not liable to the buyer, however, if the seller did not know about the problem. See a model Sellerís Property Disclosure Statement in the Appendix.

Lenderís Home Inspection. If a buyer will be financing the purchase of your home with a loan, the lender may require that the home be inspected before the lender will lend the money to the buyer. If the home fails the inspection, the lender may refuse to make the loan or may require that the items on the inspection report be corrected before the closing can occur.

Well Disclosure Statement. According to Minnesota law, you must disclose information about any wells on your property before the purchase agreement is signed. This includes the location of wells and whether the wells are in use or sealed. You must also submit a well disclosure statement with your deed, or include a statement in the deed that there are no wells or the status of the wells is unchanged since the last statement was filed.

Sewage Treatment System Disclosure. Prior to signing the purchase agreement, you must disclose any underground sewage treatment system(s) on the property. You must describe any systemís location and disclose whether, to your knowledge, it is compliant with applicable law. If a seller fails to disclose a system he or she knows about, the seller can be liable for the cost to bring the system into compliance and for attorneys fees.

Lead-Based Paint Disclosure. If your home was built before 1978, you must provide the buyer with any information on lead-based paint hazards from risk assessments or inspections in your possession and notify the buyer of any known lead-based paint hazards. You may obtain a pamphlet entitled ďProtect Your Family From Lead In Your Home" which contains information on identifying and controlling lead-based paint hazards.

Be prepared! Closing time is often panic time. All the paperwork to sell your home must be done by the closing date. If you canít close the sale on time, you may have to cancel the movers, unpack your boxes and possibly even pay for two homes at once.

Ellen Bowerís home has been attracting swarms of potential buyers. The location is attractive and so is the price. By the end of the second week on the market she had two bids. One of them was $3,000 below her asking price with no contingencies. Because the house will apparently sell with little effort by her real estate agent, Ellen will ask the agent to accept a lower commission, which makes the $169,000 bid more attractive. The agent agreed to do so, and she will keep the other biddersí names and numbers just in case the first buyer doesnít qualify for financing.



The closing is the day you and your buyer (as well as real estate agents and the closers and/or attorneys involved in the home sale) get together to make sure all the terms of the purchase agreement have been met. For the buyer, closing means signing stacks and stacks of papers. For the seller, it means signing and delivering a deed to your property and signing a few other papers, such as the Settlement Statement required by federal and state law, which lists all the closing costs. For both parties, it also involves a lot of money!

When Should You Schedule The Closing?

When you sign the purchase agreement with the buyer, youíll agree on a closing date. Make sure the date is a minimum of six weeks from the time you make the purchase agreement to allow both parties time to follow up on their end of the purchase agreement. That way you and the buyer will have plenty of time to get all the paperwork in order. Most closings are scheduled at the end of the month to avoid having the buyer pay additional interest on the loan. Donít close on the last day of the month, instead allow yourself a few extra days in case there is a problem. Although the closing date is negotiable, it is often dictated by the type of loan the buyer obtains.

Do You Need A Closing Agent?

In some communities, sellers arenít represented at closing by a closing agent. In other communities, they are. This is a simple matter of traditional industry practice in different areas. You may need to hire either a closing agent or a real estate attorney to prepare your deed and a few other closing documents. If so, shop around for one with a good reputation and a reasonable price. Ask friends who they used, or ask a real estate agent or a real estate attorney to recommend a closing agent. Real estate agents can receive fees for referring you to a closer affiliated with their company, but you are not obligated to use these services.

If you don’t have title problems to clear up, you may be able to rely on the buyer’s closer to oversee the entire closing process.

What Will You Pay To Close?

“Wait a minute. You mean I have to pay closing fees when I’m selling my home?” Yes, it’s true. While buyers cover most of the closing costs, you owe some too.

Check your settlement statement for a list of all fees you owe. Check the math, too. Mistakes can cost you money. Request that the closer furnish this list of costs to you at least one business day before the closing. The following is a list of closing costs that sellers in Minnesota typically pay:

  • Real estate commission: Any sales commissions you’ve agreed to pay real estate agents.
  • Abstract or title search: The cost to update your abstract and check the title.
  • Recording fees: The cost to file proper documents with the county satisfying your mortgage and clearing up any other title problems.
  • Real estate taxes & assessments: You may owe property taxes, or if you’ve already paid them for all or part of the year, your buyer may need to reimburse you.
  • State deed tax: In every county in Minnesota you must pay $1.65 in state deed tax if the price of the property is $500 or less. If the price of the property is over $500, you must pay the amount that is .0033 multiplied by the price of your property. In Hennepin and Ramsey counties, the deed tax is .0034.
  • Conservation fee: Some metropolitan counties collect $5 for a deed transfer fee which is used, in part, to fund the Minnesota Conservation Fund.
  • Closing fee: What you pay a closing agent, if you hire one.

What Can Go Wrong?

Unfortunately, a few things can delay the closing. These include:

  • The buyer's loan isn't approved.
  • The appraised value of the home is lower than the price your buyer agreed to pay.

What can you do?

Besides crossing your fingers, here are some suggestions:

  • Be prepared to negotiate. If an appraisal turns up problems, will you be willing to kick in some money for repairs? If the appraisal is low, will you lower your price? You should know about these problems before the actual closing date, so you can resolve them in advance.
  • Keep buyers in the wings.Don’t lose the phone numbers of potential buyers after you have signed the purchase agreement. If your sale doesn’t go through, get on the phone (or have your real estate agent call) and ask other potential buyers for bids.

After Gloria Slivers made her bid on the Kline home, Jim and Cindy continued to court potential buyers. One day a man named Michael Moss stopped by without an appointment. The Klines let him tour the home anyway. Theyíre glad they did because he bid on the house the next day! He offered $185,000 ó $2,000 more than Gloria. The Klines exercised the right they reserved under the purchase agreement and asked Gloria to remove the contingency that she sell her home. Since she hadnít sold it and was unwilling to lift the contingency, the Klines were able to accept Michaelís offer!



Congratulations! If you've been following this guide step-by-step, you now have sold your home. Take a break to celebrate. Then clear up a few nagging details.

  • Expect the unexpected — With the neighbors stopping by to say good-bye, the cat accidentally escaping through an open door and all that stuff to haul down from the attic, it will probably take twice as long as you planned for packing.
  • Find a reputable moving company by asking friends and co-workers for recommendations. Make sure the company is bonded and insured. Or consider asking friends to be your moving company!
  • Schedule final meter readings and billing dates with utility companies.
  • Don’t cancel your homeowner’s insurance policy until after the closing. If the home is significantly damaged before the closing, the buyer may elect to cancel the purchase agreement.
  • Vacuum, sweep, dust, polish and mow or shovel. Cleaning up your empty home is the most important thing you’ll do to welcome the new owners.

Whew! Now you can finally think about settling into your new home. A move is an exciting change. The Klines (including Mo and Curly) will have more space, and Ellen Bower will take her career to a new level. Wherever your move takes you, we wish you all the best!