When selling a home, it’s essential to be aware of all the laws. Breaking these laws can disqualify you from selling your home and may even lead to fines or jail time. This article will discuss four fundamental laws sellers need to be aware of.
The Truth in Lending Act
The Truth in Lending Act was first passed in 1968 and is intended to protect consumers from unfair lending practices. Under this law, lenders must disclose the actual cost of a loan, including all fees, to potential borrowers. There are various things to take note of when doing this.
First is the Annual Percentage Rate (APR). This is the yearly cost of borrowing money, including interest, fees, and other charges. It’s essential to be transparent about this number so that borrowers can comparison shop for the best deal.
Next is the finance charge, which is the total interest and fees people will pay over the life of the loan. Lenders should also disclose it to potential borrowers. Finally, lenders must provide a written statement detailing the loan terms before it is consummated.
This Act also provides specific protections for borrowers, such as the right to cancel a loan within three days of signing the contract.
The Truth in Lending Act protects consumers by ensuring they are fully informed about the actual costs of their loans. If you’re selling your home and offer financing, comply with this law, or you could face severe penalties.
The Fair Housing Act
The Fair Housing Act, a federal law, passed in 1968, prohibits discrimination in housing based on race, color, religion, national origin, sex, familial status, or disability.
This law applies to all aspects of the housing market, including renting, selling, financing, and advertising. It covers both residential and commercial properties.
A few key things to know about the Fair Housing Act if you’re selling your home:
- First, it’s illegal to discriminate against potential buyers based on the protected characteristics listed above. This means you can’t refuse to sell the home or charge them a higher price because of these factors.
- You also can’t advertise your home in a way that indicates a preference for or discourages certain groups of people. For example, you can’t say “No minorities” or “Only families with children need to apply.”
- Finally, the Fair Housing Act requires that all new construction be accessible to people with disabilities. This means must-have home features like ramps, wide doorways, and accessible bathrooms.
If you’re selling your home, it’s essential to be aware of the Fair Housing Act and comply with its requirements. Otherwise, you could face hefty penalties amounting to over $20,000 after the first violation.
The Servicemembers Civil Relief Act
The Servicemembers Civil Relief Act, or SCRA, is a federal law that provides certain protections for servicemembers who are called to active duty.
Under this law, servicemembers can request a stay of proceedings in civil cases, such as foreclosure, while on active duty. They can also request a reduction in the interest rate on their mortgages.
To take advantage of these protections, service members must provide written notice to their lenders and proof of their military service.
If you’re selling your home and the buyer is a service member, check if they’re covered under the SCRA. If they are, you’ll need to work with their lender to ensure that the sale goes through without problems.
The Real Estate Settlement Procedures Act
The Real Estate Settlement Procedures Act, or RESPA, is a federal law that regulates how real estate transactions are conducted.
Under this law, sellers must provide potential buyers with a disclosure form that outlines all the fees and costs associated with the sale of the property. This includes the commission that people will pay to the real estate agent and any other fees that will be charged.
RESPA also requires that lenders provide potential borrowers with a Good Faith Estimate of all the costs associated with the loan. This includes the interest rate, closing costs, and origination fee.
If you’re selling your home, comply with RESPA by providing potential buyers with a disclosure form and working with their lender to provide a Good Faith Estimate.
One way to ensure that you’re complying with the law regarding the representation of legal documents and their overall cost is by hiring a conveyancing service. You can hire one by visiting various law firms near your area. This service can help you determine what must be included in the contract so that both the buyer and the seller are protected. It can help you avoid breaking this law and other related problems.
The four laws outlined in this article are essential to know if you’re selling your home. Breaking any of these laws can result in severe penalties, so it’s vital to be aware of them and comply with their requirements. By knowing and following these laws, you can protect yourself from legal trouble and ensure that you can sell your home legally.