Why you should get representation
from contract to close of escrow

 

         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:

  • Buyer’s agents sometimes set up the contracts so their buyers can easily wiggle out of them if better deals come along. We'll help you catch these tricks.
  • 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.

    • 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.

    • 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.

     

    We're an Equal Housing Opportunity Brokerage.
    Copyright © 2009.  Chalkboard Realty, CA DRE License No. 01811185.  All rights reserved.  All information provided is deemed reliable but is not guaranteed and should be independently verified.