Have you had a transaction not close after the contract was signed? Take a moment and write down the reason.
PART ONE Tips to hold it together in today’s market
Preparation for Listing a Property ALWAYS REMEMBER THIS: Pre-inspection Aluminum Wiring Polybutylene piping Basement leak Open permits No permits Finished Basement Knowledge Control Situation Quantifiable Disclose Be Realistic Close Disclose and/or Certificate of Awareness
Preparation for Listing a Property: ALWAYS REMEMBER THIS (CON’T) Title issues/title search? Short Sale Seller Disclosure Complete – Seller Good faith effort Less than candid disclosure results in liability
FINANCING: CREDIT Pre-approval should have confirmation of income, assets and credit. Some do just credit. No right answer. Depends on loan officer and company. Full blown commitment for 4-5 days 45 days for approval
FINANCING: APPRAISAL THREE IS KEY! 1)Anticipate 2)Participate 3)Educate
FINANCING: SETTLEMENT HELP AGAIN THREE IS KEY! Use it or lose it. Involve loan officer. Reduce price if not used….. BUT Delay Settlement?
FOLLOW THE CONTRACT: Home Inspection Issues Dates. Go to contract. Focus on lines: 20a – 20d. Home Inspection Contingency
FOLLOW THE CONTRACT: Further Evaluation Stucco evaluation time… not 3 days Roof I want a new one… Cost Buyer pays DUELING EXPERTS: Which one do you believe?
FOLLOW THE CONTRACT: Gray Areas NOTE: NO CONTRACT IS PERFECT! Replacement vs. repair (Septic, roof) Guarantee End of natural life SELLER DISCLOSURE FORM
FOLLOW THE CONTRACT: Repair not completed before settlement Paragraph 21 requires repairs to be 2 days before settlement and provide written proof Repair done by home owner/unlicensed contractor Problem discovered right before settlement
FOLLOW THE CONTRACT: Consequences What happens if the seller does not agree to fix, there is no negotiated agreement and buyer does not notify seller of acceptance? It is DEAD! Therefore, this has changed.
Use of extra language in contract based on Sellers Disclosure: Age of roof, systems, basement leak etc. Protect. Chandelier FOLLOW THE CONTRACT: Use of extra language in contract based on Sellers Disclosure
FOLLOW THE CONTRACT: Utilities Seller responsible to have them on for the inspections. Is that a problem?
FOLLOW THE CONTRACT: Termite Report Bugs in the shed Seller repairs the damage himself Seller refuses to treat. What happens? OPPOSITE
What Happens When it Falls Apart: QUESTION YOU MAY SAY TO YOURSELF: I DID EVERYTHING I COULD DO! I FOLLOWED ALL THESE TIPS, WHY DID IT NOT GO THROUGH?
What Happens When it Falls Apart: QUESTION (con’t) Seller refuses to perform and Buyer is not also in default, the Seller is in breach of the agreement. OR Paragraph 12 gives 30 days from notice to cure title issue. Buyer fails to deliver additional deposit; is not timely with mortgage application/false information/uncooperative; or breaches terms, the Buyer is in default. Second Deposit
What Happens When it Falls Apart: QUESTION (con’t) The non defaulting party has the option to cancel agreement and receive deposit money OR pursue LEGAL or EQUITABLE remedy. What happens to the money? Broker will not release. Consequences for the loser. Pay Cost and attorney fees of winner.
What Happens When it Falls Apart: Realtors Rights/Liabilities Contract Listing Agreement Re-List the Property? Get letter from attorney confirming buyer is not purchasing and seller will re-list to mitigate damages.
What Happens When it Falls Apart: QUESTION (con’t) Deposit? Held in escrow until mutual release is signed or Order. Inspection Reports? Loser pays as part of damages for breach of contract. Disclosure obligations. Seller must fix or disclose defects found in inspections.
ARBITRATION Not signed on most contracts Ignored or not explained adequately Perception not good for Seller.
ARBITRATION: Better Business Bureau Arbitration Process $10,000 limit Final, no appeal Fast result Heard by people with real estate experience. JP who knows?
ARBITRATION: Better Business Bureau Arbitration Process (con’t) Good for Buyer and Seller because it gets resolved quickly and cheaply We recommend it. If buyer selects arbitration and seller does not, contract is still valid but without arbitration clause. COURT ACTION: Time and Money but good for amounts over $10,000.
WE REALLY HOPE YOU ENJOYED THIS PRESENTATION! HAVE A GREAT DAY FROM THE LAW OFFICE OF WARD & TAYLOR!
CONTACT WARD & TAYLOR, LLC! Contact Information (Wilmington): (P) 302-225-3350 (F) 302-225-3392 Contact Information (Middletown): (P) 302-225-2060 (F) 302-449-2806 Contact Information (Dover): (P) 302-346-7000 (F) 302-346-7001 CONTACT WARD & TAYLOR, LLC! Contact Information (Wilmington): (P) 302-225-3350 (F) 302-225-3392 Contact Information (Middletown): (P) 302-225-2060 (F) 302-449-2806 Contact Information (Dover): (P) 302-346-7000 (F) 302-346-7001