Barb Schlinker Radio Show
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In the last segment we talked about how it’s a seller’s market, which means, in many cases, the home sellers get to choose from multiple offers, but it is a legal transaction. There are some legal clauses in real estate contracts that can help you or hurt you in a real estate transaction, tell us about some of them. First of all, make sure you hire a real estate agent that knows the contracts. Many do not. Some shove a 20-page agreement in front of the buyers and sellers and tell them to sign it without explanation. It’s actually not required.
But I believe it’s malpractice to work that way.
Here are some Legal Landmines Home Buyers and Sellers Need to understand: Many agents will cut and paste legal language given to them by another agent or broker because they think it may ‘protect’ their clients. My favorites are, any other documentation and/or disclosures in the seller’s possession that could affect the future value of the property and/or the buyer`s ownership and/or use of the property. Any negative condition(s) in the neighborhood or of a neighbor may not be apparent to a Buyer but may affect the values of real estate. (part of a 15 line paragraph written in asking for all but their firstborn.) Most people in their right minds would not sign off on these clauses but I would not be surprised if some do. My other favorites are those statements that create confusion:
30.02 Parties further agree that if the property does not appraise for the agreed-upon sales price, the Buyers will pay up to $15,000 over the appraised value.
Then we have the ever-popular: Escalation Clauses
It’s already confusing enough with multiple competing escalations clauses:
Example: Price $500K
Offer: $500K BUT ….I’ll pay $1000 over the higher offer up to $507,000K
Offer: $500K BUT: I’ll pay $2000 over the highest offer up to $507,000K
Which is the highest offer?? Why didn’t they just make their BEST offer? I ask my buyers if I know I have competition: What is that number in which you are OK with someone else getting the house?
