Buyer and Seller Pitfalls and Potholes

When many homeowners decide that the time has come to sell or buy their home, they may ask themselves:

"Why do we need a real estate agent?”

Most experienced real estate agents have a few war stories.  Some war stories come directly from unrepresented sellers who have had transactions fall apart or situations to arise that were costly and stressful. In today's world, the sale of real property is not just a marketing exercise; there are many legal issues involved, which can create liability for sellers. Of all the things you want and expect from selling or purchasing your home, a lawsuit is probably not one of them!

Only a professional agent can take advantage of the Multiple Listing Service, organized tours, secure lock box access, etc. However, there is another reason to seek professional help in selling your home; an important reason that you may not have thought about. The legal one..oh yea.. that one!  There are many pitfalls in contracts whether inadvertent or intentional that can place you in court instead of at the closing table.

Unfortunately, residential transactions have seen an alarming increase in the number of claims and lawsuits. Of these claims, the majority are filed against the sellers by buyers! There are actually some sellers who think they can sell because they have sold a home before, or simply because they have watched how it is done on HGTV!

Besides giving you market reports that help you price your home competitively, there is much more to the services of your Realtor . Realtors charge a commission to bring expertise to your transaction. What may seem like a high cost, is actually a fee for an invaluable professional service and network of experienced professionals that will most likely net you more money by faster more efficient sales and reduce your risks of being attacked financially by uneducated or difficult buyers, sometimes even AFTER a sale.

In most states, the process by which title to real property is transferred is rather complicated, and the typical home seller is not familiar with the many legal issues that can and do arise, even in a fairly simple transaction. Important decisions must be made concerning contract terms, escrow matters, transfer of title, apportionment of costs and any number of other matters. A simple mis-phrased word can lead to mis-interpretation leading to a lawsuit. Aside from the liability of drafting the contract language itself, sellers can face other dangers as well. For example:

• Dangers of buyer default in seller financing, assumable mortgages or “wraparound” mortgages  resulting in wrecked seller credit.
• Eviction issues of buyers in default.
• The cost of litigation which most times far exceeds a binder deposit (if a seller was prepared enough to have even secured one – and held it in a legal escrow agency).
• Disclosure lawsuits from issues arising before current seller ownership!
• Gouging from repair contractors who see vulnerable sellers desperate to sell.

Even if you know a buyer's claims are completely bogus, it can take many months and many thousands of dollars to prove. And, of course, you could lose ... and losing a case like this can be disastrous. You and the buyer have a contractual relationship, and in many states, sellers who lose such suits could find themselves having to pay not only the amount of the damages awarded to the buyer, as well as their own attorney's fees, but they may also be ordered to pay the fees of the attorney who sued them!

Experienced, professional real estate agents understand these kinds of risks, and they can help you to minimize them in a variety of ways. They devote many hours to training and educational programs which emphasize risk reduction, and protecting their client's interests.

There is also the buyer’s lawsuits, growing exponentially every day as economic pressures cause people to show their teeth more often.  There are any number of reasons why your buyer may decide to take action against you.  Most complaints arise from problems relating to the condition of the property, and/or alleged representations made to them about the property or the transaction. An experienced agent knows how to reduce the risk of these types of complaints, by helping you prepare and properly disclose items required by law and by including clauses in the contract language, for such things as financing, contingencies, insurance,  professional home inspections, and a home warranties.

When a problem arises in the transaction, an experienced agent can move swiftly to "nip it in the bud". Their thorough understanding of modern transactions can help them to identify the real problem, and then to either solve it themselves, or seek help calling upon resources that the typical seller may not have access to and to calm the exposed nerves of both parties.

Realtors know that the best way to deal with a complaint is to prevent it in the first place. Realtors have spent a lot of time thinking about how to reduce the likelihood of claims, and have responded to this threat in a number of ways. For example, the standard contract forms that agents in many states use, are written by attorneys, full of language which can help protect you, and reduce your exposure to claims and litigation with little risks in interpretation.

It happens! Looking for alternate paths just as you do potholes in a road will help you prepare for less than desireable outcomes. Realtors drive these roads daily with buyers and sellers and it’s time the folks rely on their professionalism.

Consult a REALTOR®. Hire a Professional.

Debbie Kirkland, Realtor

www.HomeSalesofTallahassee.com  .. 850-212-0440 ..