FINAL WALKTHROUGH: Never complete the final walkthrough on behalf of your buyer! Friend, family member, inspector, do not sign off on a final walkthrough. Same thing on the Home Inspection/BINSR.
I represent the seller, the buyers agent/broker waived commission and have a buyer broker arrangement with buyer for flat fee. Buyer’s agent will not do anything but write contract. Buyer wants me to do final walk through with him. Thoughts?
Hi xxxx,, “My thoughts are that this is not your client and the buyer's agent should do the walk through. The Buyer’s Agent is violating their fiduciary responsibility to their client. It does not matter what compensation is received, that does not affect representation. Even if they don’t have a signed Real Estate Agency Disclosure and Election form, they have implied consent if the Agent wrote the contract.”
Tell the other agent to continue representing their client and do the final walkthrough. You could also remind them that they will be violating both the Code of Ethics and ADRE rules and regulations and could face possible sanctions for failing to put their clients best interests ahead of their own. Thank you
FINAL WALKTHROUGH: I have a buyer who is purchasing a model home which will be leased back to the builder - David Weekley Homes for several months. We did our inspections. Agreed upon repairs will not take place until the end of the lease. Should I do a walk through before close of escrow, or before the end of the lease, both? The buyers will not be here at close of escrow.
Hi Mary. Definitely both, that would be one prior to ownership, the second prior to possession. We have a form for each on zipForms, the buyer pre-closing walkthrough and the move-in move-out condition checklist.
FINANCING CONTINGENCY CLAUSE, GET LEGAL ADVICE! See Seller Carryback
IMPORTANT: PLEASE ADVISE BUYER - IN WRITING - TO SEEK THE GUIDANCE OF AN ATTORNEY AND ACCOUNATANT BEFORE COMPLETING THIS TRANSACTION.
FIRPTA, IRS FIRPTA, IRS & Withholding Exceptions WHAT IS FIRPTA: https://federaltitle.com/blog/what-is-firpta
FIRPTA LANGUAGE (FIRPTA WILL APPLY UNLESS SELLER HAS AN EXEMPTION)
I've seen this a few times recently, and would say it's fine. She just needs to be clear on MLS. I would put this in private remarks: “Buyer absolutely must be an owner/occupant, Seller will not consider offers from investors. Buyer must agree to execute the FIRPTA Buyer Affidavit. Call Listing Agent for details.” I also think that she really needs to have something in the contract that protects her Seller from this issue as well. Having the language in MLS is great, but it doesn't give the Seller a leg to stand on if the Buyer changes their mind during the escrow (which is one of the scenarios I've discussed with an agent recently). I would counter any offer and say that the Buyer affirms that they are purchasing the property as an owner occupant, and that they agree to complete any necessary documentation for title stating that is the case. At least something to that effect so that if the Buyer does have thoughts about not agreeing to be an owner occupant, the Seller has an angle for a cure notice.
As far as paying a commission to an agent that has a full price offer for an investor, that won't be a problem. You're never obligated to pay a commission just because an agent brings a Buyer with a full price offer, so she doesn't need to worry about that. (And I think the language about Owner/Occupants only in the private remarks should squash any complaint from those agents since its put right there in front of them).
I also wouldn't worry about the fair housing issue since an owner can freely discriminate against investors :)
Investors are not a protected class. I believe she could state in the MLS that the property will only be sold to an owner who will occupy the property, due to FIRPTA regulations. Probably come up with some better language but something to that effect. Just my opinion....Jane.
Hi There HomeSmart Broker. I have a listing owned by a Canadian woman who may choose not to sell to an investor because of tax withholding which is a considerable amount to her. My question is twofold: 1. Can I put wording on the MLS plano stating “no investors”? If so, what would be the appropriate wording to use? 2. Could I be certain that I would not be liable to pay a co-broke commission in the event another agent presented a full price offer for an investor? Thanks, Ardith Haines
Adding to what Kyle stated...Seller could request the buyer sign the FIRPTA documents within 5 days (i.e.) of contract acceptance (or during inspection period). Get it done early in the transaction. Jane
FIRPTA, SIGN AFFIDVIT, OFFER OR COUNTER OFFER LANGUAGE
Buyer acknowledges and agrees that they will occupy the property as a full time owner/occupant.
Buyer agrees to execute the attached FIRPTA Buyer Affidavit simultaneously along with this Counter-Offer. OR
Buyer agrees to execute and deliver to title the FIRPTA Buyer Affidavit within 3 days of contract acceptance or this contract shall be immediately cancelled with a full refund of earnest money to the buyer. (Attachment-FIRPTA Addendum).
We are selling our home in Scottsdale, AZ. We are not American citizens. We have consulted with a tax professional and are clearly aware of the FIRPTA guidelines and requirements. We are able and willing to sell our house. Knowing our FIRPTA options, we have chosen to sell our home for $300,000 or less, below current market value. All other terms and conditions of our listing agreement shall remain in effect.
Have I covered my bases with this statement? Donna, that would be fine. I talked with another one of our brokers Kyle, and he thought it would also be a good idea to state in an email to your clients that we also strongly recommend that their attorney review this as well to ensure there are no other liabilities we may not be aware of (ie, selling the home for less than fair market value). Probably a very good idea. Jeff.
FIRPTA: We have a listing that will be subject to FIRPTA. We've received an offer for $312,000, with the buyer also wanting to purchase some of the furniture on a separate bill of sale for $2500. Would it be possible to counter the purchase price to be $300,000 to avoid FIRPTA and raise the price of the furniture to 14,500? Would this be too risky- with the buyer potentially backing out of the furniture deal? Just wanted to see if you had any thoughts before presenting the offer to the sellers,
Hi Sherry, other than the general mechanics of FIRPTA, I would not be comfortable giving advice regarding "manipulating" the numbers to make a transaction FIRPTA vs NON-FIRPTA (for example, selling the property below fair market value). My recommendation to you is to recommend to them to seek legal, tax and/or any other professional advice regarding that.
FIRST AM COST SHEET http://www.firstam.com/assets/title/az/documents/state/buyer-seller-realtor-information/closing-costs.pdf
FIRST AM NET SHEET https://netsheet.firstam.com/Calculator/Estimate
FIRST AMERICAN TITLE CLOSING COST CALCULATOR http://facc.firstam.com/
FIXTURES VS PERSONAL PROPERTY: http://content.moneyinstructor.com/1976/personalproperty.html
FIXTURE: What is a fixture? 1) Method of Attachment 2) Agreement of the Parties 3) Intent of the Parties 4) Adaptability
Was it custom made for this property?
FLIPPER, RENOVATION, ER LANGUAGE WHEN LISTING AGENT: “Seller states that permits were/were not required for renovation work. If requested by Buyer, Seller agrees to provide Buyer with copies of all permits for all renovation work completed during Sellers ownership of property. Seller states that costs of renovation were greater than/less than $1000.00.”
FLIPPER, WHEN REPRESENT BUYER: “Seller agrees to provide Buyer copies of all permit(s) for renovation work completed during sellers ownership of property. All permits to be provided during the inspection period along with a list of participating Contractors/Vendors.”
FLIPPER LANGUAGE WHEN REPRESENT BUYER: “Contractors lien protection shall be included in the title commitment and policy with any and all premiums paid by seller.” THIS DOES NOT EXIST-SEE TITLE INSURANCE
FORECLOSURE STRIPPING: Foreclosure Stripping is the process in which the owners of a foreclosed property will remove fixtures and fittings from the property in an attempt to salvage some of their investment. Malicious foreclosure stripping is done by home owners who render damage throughout the property to significantly decrease its value and cause resale to be almost impossible. Foreclosure stripping has been a growing trend in recent years  and has reached an all-time high in 2009 because of the economic downturn.
FORCED DECISION “Buyer and Seller agree to extend buyers (Inspection Period, COE, Appraisal Period, etc) to xx/xx/xxxx.”
“If seller does not agree to extend buyers xxxx period, this Addendum shall serve as notice to seller that buyer is exercising their right to cancel this purchase contract dated xx/xx/xxxx, and request the immediate return of buyers Earnest Money, effective xx/xx/xxxx, and within buyers x days to give notice of property rejection and cancellation of this purchase contract.”
“Buyer and Seller agree to extend buyers Inspection Period to xx/xx/xxxx.”
“If seller does not agree to extend buyers Inspection Period, this Addendum shall serve as notice to seller that buyer is exercising their right to cancel this purchase contract dated xx/xx/xxxx, and request the immediate return of buyers Earnest Money, effective xx/xx/xxxx at 11:45pm and within buyers 10 day Inspection Period and delivers notice of property rejection and cancellation of this purchase contract.”
FUDUCIARY RESPONSIBILITY: REAL ESTATE AGENTS ARE HELD TO THE HIGHEST STANDARD
FURNITURE, PAYMENT DUE:
“Certified Funds in the amount of $x payable to Seller due at title company on or before COE.”
FURNITURE INCLUDED “Purchase includes all furniture as seen on xxxxx with no warranties, conveyed on a separate bill of sale at no monetary value. Seller and buyer to agree on bill of sale during inspection period or seller to provide bill of sale during inspection period or bill of sale to be agreed upon during inspection period.”
FURNITURE INCLUDED: “All furniture included as seen on xx/xx/xxxx. Furniture to convey on separate bill of sale AS-IS with no warranties at no monetary value. Bill of sale to be agreed upon and finalized during the inspection period.”
FURNITURE, REMOVE FROM CONTRACT OR COUNTER OFFER
“Line x of purchase contract (and/or Line(s) xx of counter offer are hereby removed/deleted. All furniture/personal items to convey by separate bill of sale (or separate written agreement).”
HAFA Affidavit form required by the U.S. Treasury (See “Arms Length Transaction”) Agent is not allowed to receive compensation if he/she is also the Buyer.
5/28/2013: Part of the Federal Government's Making Home Affordable (MHA) program, the Home Affordable Foreclosure Alternatives (HAFA) program was developed to give homeowners a way to settle their mortgage debt without going through a foreclosure. The buyer and seller of a HAFA Short Sale will now be required to fully execute the HAFA Affidavit prior to and as a condition of closing.
The HAFA Affidavit form certifies:
· an arms-length transaction; this is the sale of a property in which the buyer and the seller have no existing relationship (they're not family members, friends, business associates, etc.), and are acting in their own self-interest and are under no undue influence or pressure from other parties.
· that no money is being given or received that is not reflected on the HUD-1 Settlement Statement.
The HAFA Affidavit will also include an agreement that there are no other agreements, understandings, contracts or offers related to the current or subsequent sale of the property.
HARD MONEY LOAN: I would write on page 8, something like: 1) This is a hard money loan. Section 2 Financing contingencies shall apply. OR 2) This is a hard money loan to be treated as an "All Cash" Sale. Section 2 Financing contingencies shall not apply.
HARD MONEY LENDERS (HMLs) are typically private individuals or small groups that lend money (Hard money) based on the property you are buying, and not on your credit score. Usually these loans cost (percentage-wise) much more then an average mortgage, often times up to twice what a regular mortgage does, plus high origination fees.
HAULED WATER: No Domestic water well addendum required. Hard to get financing, specialty lender, is hauled water common to the area?
HELOC FINANCING: CASH, SOURCE OF FUNDS IS REFI/HELOC: Page one of PC: $xx price, $xx earnest money, $xx cash on or before COE (see additional terms and conditions).
On page 8 write something like: Source of Funds: This purchase agreement is contingent upon the successful refinance/HELOC for the buyers property located at 123 Main St, Tempe, AZ. Refinance/HELOC shall be completed and funds made available to buyer (or funds deposited with escrow) no later than 3 days prior to close of escrow. Financing Contingencies in this purchase contract, section 2, line #’s xx-xx, shall not apply. Buyers preliminary refinancing/HELOC Lender approval letter is attached.”
HIGHEST AND BEST OFFER (Send via email, could also ask for response on counter offer form).
“Good morning. The owner has received multiple offers for the property located at 123 Main Street, Tempe, Az. He/She would like to extend an option to all parties to improve their original offer to a new highest and best net offer to the seller before x:00pm, MST, xx/xx/xxxx. If interested, please submit an addendum to your offer including any new price and/or terms with a seller acceptance time of x:00pm MST that same day.”
I have 2 offers on my listing and the Sellers want to send a multiple offer to each of them. I haven't done a multiple offer so do I just write "Please send your highest and best offer " on the Multiple offer form itself, or is there a counter-offer that is supposed to go with the multiple counter offer? Please advise.
If you're just asking for the highest and best from these Buyers, you would simply email both agents. You'd say something like
"Thank you for your offer. I wanted to let you know that we've received multiple offers for this property and my Seller is requesting an addendum with your Buyers highest and best offer by no later than xpm on xx/xx/xxx. If we do not receive an addendum from you prior to that time, your offer will be considered as it is currently.”
The only time you would do a Multiple Counter Offer is if you're asking the Buyer to change specific terms. In this case, with a highest and best request, you're simply asking them to update their offer.
HIGHEST AND BEST SAMPLE (CAN BE USED WITH MULTIPLE COUNTER OFFER TOO)
HOLDBACK AT ESCROW: “Seller and Buyer Agree to Close Escrow with incomplete repairs. Seller & Buyer further Acknowledge and Agree that a “Holdback Account” will be established and $x will be withheld from Seller’s proceeds by Title Coompany. Funds will be made payable to xyz company (or vendor or seller or and/or nominee named before COE) for the following repairs as agreed in the BINSR. LIST: xx, xx, xx, xx. Repairs to be completed no later than xx/xx/xxxx. If repairs are not completed by agreed upon date, the balance of any funds remaining unused in the “Holdback Account” to be immediately released to buyer.”
HOLD HARMLESS (EXAMPLE): "Should Buyer/Seller waive the SPDS (or xxxx), Buyer does so against the advice of HomeSmart. Buyer agrees to defend, indemnify and hold harmless HomeSmart, it’s Designated Broker and Agent of Record against any and all claims that may be made regarding the property (or xxxx) and its condition." BUYER/SELLER IS HEREBY ADVISED TO SEEK LEGAL, TAX AND ANY OTHER PROFESSIONAL ADVICE DESIRED BY CLIENT.”
HOLD HARMLESS, INDEMNIFICATION: "Buyer agrees to close escrow and accepts the property in it's present physical condition without the Southwest Gas utilities installed. Seller & Buyer acknowledge and agree that Buyer will assume all responsibility for having said gas utilities and all related equipment installed after close of escrow, and Buyer agrees to indemnify and hold harmless Seller and both brokerages of record regarding gas utilities."
HOA VIOLATION DURING ESCROW: See changes during escrow, get updated SPDS, send CURE notice if necessary, Addendum, Holdback, etc.
HOA ADDENDUM NOT AVAILABLE PRIOR TO SUBMITTING OFFER LANGUAGE "This contract is contingent upon the Seller completing and delivering page 1 of the HOA Addendum to the Buyer, and the parties agreeing to the subsequent terms completed on page 3 of the HOA Addendum within 5 days of contract acceptance. In the event the terms of the HOA Addendum are not agreed to within 5 days of contract acceptance, the Buyer may cancel this contract during the inspection period with a refund of the earnest money."
HOA CANCELLATION (ALSO SEE CANCEL, HOA): The buyer has given instructions to cancel the transaction due to their disapproval of the HOA Disclosures. Page two of the HOA Addendum, specifically lines #42-43 state that the buyer is allowed five days after receipt to disapprove. There is no need for a "mutual cancellation" since the contract gives the buyer the unilateral right to cancel for multiple/various reasons, which could include cloud on title, SPDS, Insurance Claims History, BINSR, HOA Disclosures, etc, etc. The buyer has given their lawful instructions to cancel, the title company should follow those instructions. The earnest money should also then be released back to the buyer for these same reasons.
HOA CANCELLATION: Loan Denial due to litigation. Use unfulfilled loan contingency notice.
HOME WARRANTY TRANSFER: “Seller to transfer current Home Warranty at no cost to buyer. Current Home Warranty is issued to ____. Expiration date is xx/xx/xxxx. Buyer to contact x at 123-4567 or xx.com for more information.”
HOMESMART FEES: Hello Jerry, I was informed that you will not be taking commission for the file above and will be paying the HomeSmart fees on your own. In order to pay the fees of $300 to HomeSmart you will need to write a check to the title company so they can pay us. Title Co Commission Instructions should read $300 to HomeSmart to cover your transaction fee’s, please have them correct to show $300 to HomeSmart.
Please let us know if you have any further questions. Thank you, Jessica
HOMESMART FILE, BOTH AGENTS HOMESMART, ONE AGENT LATE WITH PAPERWORK:
Both agents are HomeSmart, Listing file is complete, buyers agent is delinquent with paperwork on the sale file. Please release Listing Agent's commission check to listing agent Valerie Cox. I have copied her on this email.
HUD FINANCING: http://thearizonahomebuyer.com/what-every-hud-homebuyer-should-know/