Business

<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Sunday, July 20, 2008 Get legal help for private contract By Steve Tytler Question: We are interested in purchasing a home privately, that is, without the seller using a real estate broker. We would need to agree on a price and will ask for a structural inspection. What suggestions do you have for oversight of this transaction to protect both the seller and us? We need to sell our home as part of this agreement. Both homes are "free and clear." Are there individuals who will, for a fee, direct us through the needed paperwork and legal steps? L.A., Bothell Answer: Yes, there are professional individuals who will handle the paperwork and legal steps in a real estate transaction -- lawyers. That may seem obvious, but you'd be surprised how many home buyers and sellers fail to seek legal advice in real estate deals involving hundreds of thousands of dollars. When buyers are struggling to scrape together the cash to cover the down payment and closing costs for the purchase of a home, they hate to spend an extra couple of hundred dollars on attorney fees. But in my opinion, that is money well spent -- especially when you don't have a real estate agent to represent your interests. Even when the buyer and seller are represented by agents in a transaction, it's wise to have the purchase and sale contract reviewed by an attorney to make sure you have not inadvertently overlooked a clause that adversely affects your rights. An attorney may also suggest additional language that strengthens your rights in a contract. For example, a few years ago one of my mortgage clients was unable to meet the Dec. 31 closing deadline specified in their purchase and sale agreement because snowstorms prevented them from getting to the escrow office. At that point, the seller could have canceled the deal and accepted a more attractive back-up offer that was waiting in the wings. But fortunately my client had added a clause to the contract when it was originally drafted that gave them an automatic seven-day extension if they were unable to meet the scheduled closing date. That one little sentence literally saved the deal. If the buyers had not had professional representation when the agreement was drafted, they would not have had the foresight to add that clause to the contract -- and they may have lost their dream home. Even though I have suggested using a lawyer in all real estate transactions for many years, I realize that this does not happen very often in the real world. But at least the buyers and sellers who are working with real estate agents are using standardized forms prepared by attorneys for the multiple listing association that are designed to protect all parties in the transaction and minimize legal disputes. As a licensed real estate broker, I have occasionally helped my mortgage clients by drawing up a purchase and sale contract for them at a nominal fee when they were buying a home from a For Sale By Owner seller. In those cases, I was simply acting as a facilitator and not representing either party. The advantage is that I am using all the latest multiple listing association forms which are constantly reviewed and updated by several lawyers, so the buyer and seller each have some level of legal protection. You may be able to find a local real estate agent who is willing to do this for you, but don't pay thousands of dollars for this service. For example, I typically charge $1,000 to write up a purchase and sale agreement between a home seller and buyer after they have verbally agreed on the terms, and that fee is usually split 50/50 between the buyer and seller. However, I still think that you are better off hiring a real estate attorney because for roughly the same amount of money you would be able to get some legal advice to protect your interests rather than just hiring somebody to fill out the forms for you. Regardless of who draws up the paperwork, be sure to use an independent escrow company to close the transaction. A home buyer should never give money directly to the seller. All money and paperwork should go through the escrow company, which acts a neutral third party to ensure that the buyer and seller each get whatever they are entitled to in the purchase and sale contract. And the home seller should purchase an "owner's" title insurance policy for the buyer to guarantee that they are transferring clear title to the property. Mail your real estate questions to Steve Tytler, The Herald, P.O. Box, Everett, WA 98206, or e-mail him at economy@heraldnet.com.

1. Life on the strike line 2. Arlington boatbuilder shutting down; hundreds to lose jobs 3. Dwayne Lane can build in Arlington, court says 4. Boeing, Machinists likely to resume talks this weekend 5. Woman who helped bust Everett cyberpimp will serve a week in jail 6. Crash shuts highway in Lake Stevens, sends 1 to hospital 7. U.S. 2 striping will add a lane 8. Man arrested after Everett gun confrontation 9. Snow So Soon? 10. Robinson looks to be productive for Seattle 2 - Top 10 Stories Most Talked about 3 - Top 10 Stories Most Emailed

• Shorecrest upsets Meadowdale behind fine defensive effort • 'Free' solution to costly problem? • King's beats Archbishop Murphy, takes over lead in Cascade Conference • One sweet training program • Who says white men can't rap? • Anonymous parent salvages snacks at school • Court move's plans raise questions • Jackson prevails in overtime thriller • Meadowdale's Moore-Taylor runs wild • Paine Field airline service strongly supported by 71 percent of web surv ... • Verizon launches FiOS TV in Washington State • Leisure Time Events - September 2008 • September 2008 • State needs to establish north county campus to meet growing technology ... • Future software programs may be based online • Visit two unusual Paine Field aviation museums for historic and futurist ... • Mothers launch Kids ‘N’ Clay pottery studio to provide children with cre ...