“Don’t Shoot Me, I’m Just the Real Estate Agent!”
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This book describes 100 actual examples of real estate transactions which contain “red flags”, or indicators that there may be potential problems. |
ABOUT THE AUTHOR
Real estate advisor to attorneys when a transaction becomes an incoming lawsuit
Testified as a designated Expert Witness at trials in five Bay Area counties
Risk Management and Legal Update speaker and course developer
Approved Instructor in statewide continuing education courses
I have been and continue to be an advisor to many real estate attorneys when their clients want clarity on a transaction that has gone wrong. If the real estate dispute results in litigation or arbitration against the real estate Agent, their attorneys may call me. The parties want someone knowledgeable and experienced to testify whether the real estate Agent did their job correctly or not.
Probably 90% of these disputes do not actually go to trial, but are mediated or settled between the parties and never become part of case law. I have turned this information into risk management and lawsuit prevention courses for real estate Agents. That’s how this book came into being.
California may be the litigation vanguard for the rest of the country. Many real estate practices and regulations start in California, especially as they relate to disclosures of the condition and history of the property. If you are reading this book outside of California, the issues and corresponding recommendations could be parallel, barring local customs and practices.
Regardless of the state or country where the property is located, Sellers, Buyers and Agents will want to have all information in order to make an informed decision as to whether to proceed with the transaction.
TABLE OF CONTENTS
SECTION I: LISTING AND MARKETING PROPERTY
If the Home was Previously on the Market but Didn’t Sell
1. What Reports or Inspections Were Done During the Prior Marketing Period?
2. Was there a Previous Offer?
3. Does the Seller have any Buyer Exclusions?
Determining the Seller’s Position
4. Who is on the Ownership Title?
5. Can the Seller Afford to Sell?
6. Did the Seller Take out an Equity Line of Credit?
7. Is the Seller a U.S. Taxpayer?
If the Transaction Will be a Short Sale
8. Do You Have the Seller’s Approval to Contact the Lender?
9. Should a Short Sale Listing Addendum be Used?
Seller’s Title and Escrow Issues
10. Is there a Nasty Divorce?
11. Can Escrow Divide the Funds?
12. Has One Spouse Remarried?
13. Does the Seller Owe Back Taxes?
14. What About Easements?
Disclosures from the Seller
15. What’s the Big Deal with all These Disclosures?
16. Does the Seller Balk at the Real Estate Transfer Disclosure Statement?
17. If the Seller Never Lived in the Home, What Good is the RETDS?
18. What If the Seller Checks “Yes” to Problems, but Doesn’t Explain Them?
19. What if the Seller Wants the Agent to Minimize Flaws?
20. Is the Seller Asking You to Fill Out the Seller’s Statement?
21. Was there a Death on the Property?
If the Property is Rural
22. Is Something Smelly?
23. What’s the Water Source?
24. Is it on a Septic System?
25. Are There Storage Tanks?
26. Can You Hear Me?
27. What About Boundaries and Land Use?
Area Specific Disclosures
28. Are There Local or Regional Disclosures?
29. Is there a Home Owner’s Association?
30. Can the Seller Provide HOA Documents?
When the Seller Did Construction Work on the House
31. What Was Done?
32. Were there Water Intrusion Issues?
33. Did the Seller Recently Buy this Property?
34. Should the Agent Order Inspection Reports for the Seller?
Marketing the Property
35. Is your License Number on Your Marketing Material?
36. Can the Flyer Cause Problems?
37. Won’t the Disclaimers Protect Against Claims?
38. What About Seller Confidences?
39. Open Houses – Can You Hire a Surrogate?
40. Is the Seller a Real Estate Licensee?
41. Does the Seller Want You to Illegally Discriminate?
Is your Listing Tenant Occupied?
42. What Rights does the Tenant Have?
43. Why Should the Tenant Cooperate?
44. Do You Want to Use a Key Box in a Tenant-Occupied Property?
45. Will the Tenant Verify the Lease Situation?
Prepare the Seller for Offers
46. Is a Bidding Scenario Possible?
47. Can You Buy Your Own Listing?
SECTION II: WORKING WITH BUYERS
48. What if the Prospect Balks at an Agency Disclosure?
49. Has the Prospect Signed other Agency Disclosure Forms?
50. Does a Buyer-Broker Agreement Exist?
51. Does the Buyer Believe the Agent is “Theirs”?
52. Don’t You Need Paperwork to Create Agency?
53. If They Don’t Pay Me a Commission, How Can I be Their Agent?
Showing Properties
54. Is the Agent Unfamiliar with this Area?
55. Is the Agent Unfamiliar with this Type of Property?
56. Do the Buyers Want you to Discriminate when Selecting their Home?
57. What if the Buyer Wants Specifics about Crime?
58. Buyer Asks “What Price Should I Offer?”
59. The Buyer Questions “Did I See Every Property?”
60. “Do You Think the Value Will Go Up?”
Writing an Offer
61. Do the Buyers Seem Overwhelmed?
62. Will the Buyers be Making an All Cash Offer?
63. Does the Buyer want to Purchase Property You Own?
64. What If the Buyer Wants to Make an Offer on Your Own Listing?
65. Is The Buyer a Real Estate licensee?
66. Does the Buyer Plan to Fix-Up the Property and Resell?
67. Is this a New Home Under Construction?
68. Is This a New Home in a Subdivision?
69. The Home is New, so Why Bother with an Inspection?
70. What’s an “As Is” Offer?
Disclosures for Buyers
71. The Buyers Already Know of the Defects, so Why Worry?
72. Is The Buyer Being Rushed to Complete the Sale?
73. If the Seller Won’t Allow Inspections?
74. Are there Special Disclosures for Common Interest Property?
When the Buyer wants to Purchase a Home that’s a Short Sale
75. Is a Short Sale a Problem for Buyers?
76. Why Use a Short Sale Addendum?
When the Listing is in Foreclosure
77. What Constitutes the Foreclosure Process?
78. Is the Buyer an Investor? There May be Special Requirements.
Red Flags when Drafting the Offer
79. Did the Agents Draw up a Waiver?
80. What’s the Difference Between a Contingency and a Covenant?
81. Should you Advise Litigation or Arbitration?
82. Should the Buyer Select Liquidated Damages or Not?
83. Is the Buyer Increasing the Initial Deposit?
84. What about Paperwork - Can the Agent Deliver, Receipt, or Accept?
85. “Can’t You Just Sign it for Me?”
86. So Many Counter Offers – What Did We End up With Anyway?
87. When Does the Buyer Get Back the Deposit?
SECTION III: MOVING THE SALE THROUGH TO CLOSING
The Escrow Process
88. One Party Wants to Delay Opening Escrow
89. Did the Buyer’s Deposit Check Bounce?
90. Doesn’t Canceling the Escrow Cancel the Purchase Agreement?
91. Which Agent is Ordering What Reports?
92. Why is Insurance Not so Easy Anymore?
93. Is there Income from Rental Property?
94. Is the Seller Crediting Funds to the Buyer?
95. Does the Buyer Have a Home to Sell?
Getting Signatures on Documents
96. Are the Parties Out of Town?
97. Is there a Power of Attorney?
98. Does the Offer Indicate an “Assignee”?
99. Can Documents be Notarized Out of State?
The Finish Line Details
100. Can the Buyer Write a Check to Transfer Title?
Postscript: Why are there so many lawsuits?
Index to Sidebars:
The Case of the Cranky Neighbors
Was There a Material Change with the Property?
When the Market is Changing Fast, What Price is Right?
Qualify Buyer Prospects so you Don’t Spin Your Wheels
Understanding the Agency Disclosure Form
This Transaction Exceeded Abilities from the Start
In a Slow Market, How Low Can You Go?
Did Anyone Read the Preliminary Title Report (PTR)?
Who is the Actually the Buyer?
UPDATING AND CONTACT INFORMATION
This book is updated as California laws and practices change through Cari Lynn Pace’s blog site www.LawsuitPreventionServices.blogspot.com.
To note changes in your area, please email Cari Lynn Pace at Cari.TopRealEstateRisk@gmail.com
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