Q. Is there a standard real estate contract?
A. There is a contract (approved by the Florida Association of Realtors and The Florida Bar) known as the FAR-BAR contract. There is also a contract approved by the Florida Association of Realtors only which is known as the FAR contract. In addition many real estate companies have their own pre-printed forms. In many instances that contract has not been approved by any attorney and is written to benefit the Buyer and/or the Real Estate Agent. The real estate agent who locates the Buyer (not usually the Listing Agent) will put the initial offer on his company's pre-printed form which will not be the same as the pre-printed form used by the Listing Agent.
Our firm recommends the FAR-BAR contract which we can prepare for you in one conference and at a fixed small fee.
Q. What closing costs should the Seller pay?
A. Unless your Buyer is financing his purchase through either a VA or FHA mortgage, the law does not require that you pay any particular costs and, as a result, costs are negotiable between you and the Buyer. The following are costs that are customarily paid by the Seller of a residential homesite in Pinellas County, Florida.
a. Documentary Stamps
b. Owner's Title Insurance
c. Termite Inspection
d. Real Estate Commission
e. Seller's Attorney Fees
Q. Whom does the Real Estate Agent represent?
A. In Florida, this depends on what kind of arrangement was entered into at the time of the listing and what kind of relation the agent who brought the Buyer to the property entered into when he met the Buyer. In Florida there can be a Buyer's Agent, a Seller's Agent or a dual agency. The kind of agency arrangement determines who (the Buyer or the Seller or both) the Agent represents. Therefore, when dealing through a real estate agent always establish at your first meeting what kind of agency is being created. Problems can arise if this is not clearly established at your first meeting, especially if you list your house with a large broker and another agent in that broker's office is the agent who brings forth the ultimate Buyer. In that case there can be difficulties since the second agent will have established a natural camaraderie between himself and the Buyer and that can be counterproductive to your ultimate interests.
Q. What warranties must a Seller give a Buyer in the sale of real estate?
A. A recent decision by the Florida Supreme Court requires that a Seller must disclose to a Buyer any latent (not easily discoverable or readily apparent) defect in the property which affects its fair market value. In addition, many pre-printed contracts include in their terms a representation that "the appliances, air conditioning, plumbing, etc., shall be in good working order at the time of closing". While most Buyers want this type of representation from the Seller, it should be limited by an additional clause which does not appear in most pre-printed contracts, i.e., "Seller's liability under this clause shall not exceed $_______. If the cost of curing any defect exceeds $______ then either party may elect to pay such excess. If neither party elects to pay such excess then this Agreement shall terminate."
Q. How much real estate commission should I pay when selling my house?
A. The customary residential real estate sales fee in Pinellas County, Florida, is 7-1/2% of the sales price. (Some firms have reduced this to as low as 6%). This fee, when paid, is normally split between the Listing Agent and the Selling Agent (the agent who locates the Buyer). Many times, by limiting what is expected of the Listing Agent, you can reduce the amount of commission that will be paid to the Listing Agent. For example, if you advise the Listing Agent that you merely want the agent to list the property in the Multiple Listing Service of the local Board of Realtors and to answer availability questions with little or no advertising and no open houses, that agent may be willing to reduce his share of the commission from 3-3/4% to 2%.
Q. Who is liable for any termite damage?
A. Because of our climate, almost all sales of homes will include a provision for a termite inspection. The FAR-BAR contract provides for the cost of the inspection to be paid by the Buyer. The Seller is usually required to pay any expense of treatment or damage, but the contract should provide a limit on how much a Seller is required to pay in the event infestation or damage is found in the building.
Q. Should I help the Buyer purchase my house by carrying a mortgage?
A. Whether you are going to carry a mortgage on the sale of your property will depend on your own financial situation. If you do carry a mortgage, you must include in the contract the provisions you want in the mortgage. Some of the provisions which should be included are the interest rate (which should be variable if the term of the mortgage is greater than three years); the term of the mortgage; late fees for any late payments; grace periods; whether the mortgage is assumable in the event the property is sold; and whether there is any penalty for prepayment.
Q. Do I need an attorney in the sale of my house or real property and, if so, when should I get him involved?
A. For most individuals, the sale of their home or other real property is one of the biggest financial events of their lives and involves substantial legal issues which can only be adequately handled by a licensed attorney specializing in Real Property Law. As a result, it is extremely important to have an attorney review any contract before you sign it. While a real estate agent may be valuable in assisting with the marketing of your property, it is important to have an attorney whose sole interest in the drafting of a contract is your protection. Your real estate attorney can also handle the closing of the sale of your home by issuing title insurance at basically the same rates that you would incur with a title company.
At Mark R. Lewis, P.A., we concentrate a large part of our practice in the area of real estate law and have done so for over 30 years. We can prepare the contract, handle the closing and protect your interests.
Q. Do I need a real estate agent to sell my house?
A. No. If you decide to sell the house yourself, our office can write the contract and handle the closing, including writing the title insurance and the other little things that go with selling your house. But even if you do have a real estate agent, our office can write the contract or review it after it is presented by the Buyer or real estate agent, write the title insurance and close the transaction.
No comments:
Post a Comment