For Sale by Owner News and Articles
Complex Contracts Mandate Legal Assistance
By Broderick Perkins
Listing agents often have years of experience drafting and examining sales contracts, wading through all of their legal intricacies.
Sellers who go it alone are lucky if they studied business torts in high school.
When you find a buyer and need to draft a sales contract find a good real estate attorney.
Contracts involve legal issues, and real estate agents, title companies and others who are not licensed to practice law shouldn't be fiddling with your agreement anyway.
"FSBOs must take some of the commission money they're 'saving' and spring for a real estate attorney to guide them through the contract process. The attorney will provide a legally binding contract, and help buyer and seller fill it out properly," said Ray Brown, San Francisco broker and author of "House Selling for Dummies," (IDG Books, $16.99).
Depending on where you live and the title and escrow procedure for your community, you may need a title attorney who can likely assist you.
Otherwise, ask family, friends, co-workers and others you trust for a referral to a licensed real estate attorney they've recently used and found satisfactory. Interview several to determine their expertise in real estate contracts in your area before you settle on one.
Initially, he or she will tell you what contract to use.
Stationery store and legal self-help rip-out forms might not be in your best interest, especially if you live in a heavily regulated market.
"The best deal is to get it through your local real estate board or association. Due to new laws, they will change from time to time and from state to state. They are held to the same legal standards the real estate agents follow," said Sacramento-based attorney, Michel James Bryant, who also authored "The Legal Edge for Homeowners, Buyers, & Renters," (Renaissance Books, $15.95).
In California, for instance, at least two disclosure forms are necessary, one to cover dozens of disclosure issues including the condition of the property and another for a half dozen natural hazards. All states are required by federal law to add to the contract disclosure forms covering lead-based paint.
"Just because you are going solo doesn't mean the law will give you a break if you don't disclose something you should," said Bryant, also host of "The Legal Edge" syndicated television news feature broadcast on news programs in 40 states.
Along with disclosures the attorney can counsel you on contingencies, financing, who will handle necessary repairs, who will pay for other costs, how to handle disputes, what fixtures and other items are included in the home sale, escrow, "as-is" clauses and myriad other points.
"Escape clauses to make sure you give yourself enough out so if things don't go your way, you won't have an open ended problem," Bryant said.
Buyers on their own have contractual issues too and would be remiss not to also hire an attorney if only to review the contract to make sure it is legal, binding and fair.
"How to hold title to the property. That's a buyer's issue. If you are a buyer and the seller has an agent you don't really have anyone to represent you," Bryant said.
Broderick Perkins, has been a consumer journalist for 20 years. Experienced in print, electronic, and consulting journalism, he is chief executive editor of San Jose, CA-based, DeadlineNews.Com, an editorial content and consulting firm.