Some FSBO sellers expect their escrow officers to help
them with all the paperwork. Unfortunately, escrow
officers can offer only limited help. Their role is
simply to follow the parties’ escrow instructions and
prepare the documents necessary to close escrow. They
have no obligations with respect to the disclosures that
need to be made in order to comply with state law and
avoid future litigation. It’s not their responsibility
to catch your mistakes or offer advice.
But selling FSBO doesn’t mean you have to handle the
paperwork yourself. Here are some of the ways we
can help you avoid problems and make your deal happen:
Example #1: In her offer, Betty Buyer made the deal
contingent on her getting a loan at a 5% interest
rate. Steve Seller agreed. Two weeks later, Betty
Buyer declared that she wasn’t able to get such a
loan, and she walked away from the deal with her
deposit. By specifying such a low interest rate,
Betty deliberately created a contingency that was
sure to fail—giving her an “escape clause.”
Example #2: Bob Buyer made a low initial deposit of
$1,000 on a $500,000 home, and agreed to increase
the deposit by $9,000 two days later. Sally Seller
agreed. On the day before escrow closed, Bob backed
out of the deal. His penalty? Just the initial
$1,000 deposit. Sally hadn’t noticed that she’d
agreed to a standard clause in the contract
specifying that only the initial deposit would serve
as liquidated damages in case the buyer defaulted.
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We'll work hard to make sure the disclosures are
handled properly.
Example #1: Scott Seller didn’t give Bart Buyer the
Natural Hazard Disclosure Form until three days
before escrow was to close. Bart, meanwhile, had
found a cheaper house and wanted to get out of the
deal. When he got the Disclosure, he claimed that he
wouldn’t have bought Scott’s house if he had known
the house was near an earthquake fault. He was able
to walk away from the deal and take his deposit with
him.
Example #2: Buyer Betsy bought Sally Seller’s house
in 2005 for $500,000. In 2006 it was worth $400,000.
Betsy, looking for a way to get her money back,
discovered that a registered sex offender lived
three doors away, and that Sally had never filled
out a Sex Offender Data Report Disclosure Form.
Betsy successfully sued to rescind (undo) the
purchase.
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We'll help you negotiate your contract, prepare all
disclosures, coordinate inspections and appraisals,
and maintain a timetable to help ensure everything
gets done on time. We'll also work hard to
troubleshoot problems and make your deal happen.
Example: Seller Samantha wanted to sell her home in
June but she faced a prepayment penalty of $6,000 if
the loan was paid off before August. We would
have phoned Samantha’s lender to negotiate a smaller
prepayment penalty.
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