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


It’s the moment that you’ve 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 they’re 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 — part of the down payment — which is refundable if you reject the offer. The purchase agreement will include (see sample form in the Appendix):

  • 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 3 to 5 percent of your asking price? If so, most real estate agents will tell you it’s a good offer and urge you to consider accepting it — 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? It's 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 you’ve agreed to pay for repairs.
After having their home on the market for a month, the Klines hadn’t 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 $85,000 drew more interested buyers. Gloria Slivers offered the Klines $83,000 contingent on selling her home. The Klines decided to accept the offer “on contingency.” 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 $83,000 or a noncontingent offer comes along, the Klines must go to Gloria and give her the opportunity to lift 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 don’t have to sign it, and will want to consider the pros and cons carefully.

So what is arbitration? In simple terms, it’s a system for resolving disputes out of court among buyers, sellers and agents about the physical condition of the property. Disputes are sometimes simple misunderstandings (the buyer thought the washer and dryer came with the house, but the sellers didn’t). Problems can also be more complex. If you can’t agree on a solution with the buyer or agent, you’ll have to go to court or hire an arbitrator.

The arbitration envisioned in the standard arbitration agreement is a system that was developed by the American Arbitration Association (AAA) and the Minnesota Association of REALTORS® (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 homesite. By signing the arbitration agreement, you may be liable for problems that arise with the property for a shorter period of time than you would be in a court of law.

The buyer may be unwilling to sign the agreement, however, because the cost for arbitration under the AAA/MAR system is a minimum of $250. The cost may exceed $3,750, depending on the amount of the claim, number of parties involved, or the choice of a single arbitrator or a 3-member panel. A schedule of fees as well as additional information is available on the Minnesota Association of REALTORS® website at:

If you don’t sign an arbitration agreement, many smaller disputes can be resolved quickly and inexpensively in Conciliation or “Small Claims” Court. Judges in Conciliation Court can decide claims up to $7,500. 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 aren’t 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 isn’t quite that easy. You need to scrounge through your file cabinet for the abstract or owner’s duplicate certificate of title. If you don’t have a duplicate certificate, check with the title company that assisted you when you purchased or refinanced the home or check with the county recorder.

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 aren’t completed by the closing date, your purchase agreement will be null and void unless the parties mutually agree to extend the agreement.

Title Matters. In Minnesota, real estate records are kept in county courthouses for abstract property and 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 thick compilation of all entries in the tract index regarding the property. Torrens or registered property is the modern system that relies upon a certificate of title maintained at the courthouse for each piece of property. The clerk can check the certificate without wading through an abstract of title and lots of ancient records.

If you own abstract property, the purchase agreement requires you to furnish the buyer or the buyer's title company with your 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. You will need to surrender your owner's duplicate certificate of title.

To sell your home, title problems must be cleared up. If any problems appear on your record, you'll 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 payment due on a mortgage loan by a former owner. If a lender didn’t let the closer know when the loan had been paid, the record may simply need updating.
  • Lien by spouse: If you are divorced or in the process of getting divorced, your spouse or ex-spouse 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. You must disclose the results of these agreements.

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 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.

Real Estate Transfer Disclosure Statement. Real estate agents can provide you with this form for recording the condition of your home. You aren’t required by law to supply this to a buyer, but most buyers will ask for it. This disclosure supplements statements about the condition of your home made in the purchase agreement.

The disclosure statement may repeat many of the same items listed in the Truth-In-Housing Report and the general written disclosure required by law. But you don’t have to fix all of these problems — just report them. Be aware that you may be required to fix all of these problems you know about, yet don’t reveal to a buyer. See a model Real Estate Transfer Disclosure Statement in the Appendix.

Well Disclosure Statement. According to Minnesota law, you must disclose information about any wells on your property. This includes the location of wells and whether the wells are in use or sealed.

Ellen Bower’s 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 $69,000 bid more attractive. The agent agreed to do so, and she will keep the other bidders’ names and numbers just in case the first buyer doesn’t qualify for financing.


Be prepared! Closing time is often panic time. All the paperwork to sell your home must be done by the closing date. If you can’t close the sale on time, you may have to cancel the movers, unpack your boxes and possibly even pay for two homes at once.

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 the U.S. Department of Housing and Urban Development, 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, you’ll 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. Don’t 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 aren’t 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 your closer furnish this list of costs to you at least one business day before the closing. 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 currently pay the treasurer’s office $1.65 in taxes for every $500 of the price of your property.

Conservation fee: Some counties collect between $5 and $20 for a mortgage registration fee and a deed transfer fee. This money is used, in part, to fund Minnesota’s wildlife 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. They’re glad they did because he bid on the house the next day! He offered $85,000 — $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 hadn’t sold it and was unwilling to lift the contingency, the Klines were able to accept Michael’s 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!