servicesBIOrecommendationsdisclaimerscontacthome

Tips and Thoughts from

WARHURST LAW OFFICE


200 Main St., Ste. 21 | Redwood City, CA 94063 | Off: (650) 288-3390 | Fax: (650) 568-0800

Recommended Local Businesses

Tips for a Successful Home Sale or Purchase Is There a Safe Way to Use Business Forms Found on the Web?
  
Tips for a Successful Home Sale or Purchase

These tips arise from decades of experience with litigation flowing from my representation of buyers, sellers, and brokers in home sales. For most home buyers and sellers, the transaction will concern their largest asset. All properties are unique, so all deals are unique. Careful, practical attention to legal details will limit disputes and make conflicts less expensive to resolve.

  1. Choose the agent carefully. Spend a LOT of time evaluating your agent/broker before listing or hiring. Interview for (1) how willing the agent is to follow your directions, (2) the agent’s problem-solving skills for the inevitable transaction complications, and (3) what services the broker includes in the broker’s compensation. Many listing brokers will provide specific marketing, clean up, and repair expenses as part of their listing fee. Also, make sure you have a viable, comfortable connection with at least one broker who owns the firm or manages the branch office. That broker should be a tremendous resource to you as well as your primary agent. That broker is getting part of the commission and will not be afraid to earn it.
  2. Agent dynamics.  Agents want to close deals. Realize that very well-meaning agents, especially buyer’s agents, may still encourage a sale on questionable terms, because they only get paid when a sale happens. If you are a buyer, give your agent very precise instructions of what you want. A good agent will be happy to focus on your exact requirements. Saves time for everyone. Remember, however, that the agent or broker must follow your directions as to sale price and terms. If you feel your primary agent is not completely cooperative, do contact the owner-broker for help.
  3. Learn what your broker can do for you.  If you are selling, be willing to accept your agent’s advice on what to do and what not to do to prepare a house for sale. The agent/broker knows more than you do about which repairs and clean up will pay for themselves in a higher market price. It can be difficult to be objective about your home and treat the sale as a business transaction for profit. Be as responsive to your agent as possible. 
  4. Forms.  Use the CAR offer and sale forms, not the SF Realtors forms. The CAR forms are very good, but they are still written by brokers in part for the benefit of brokers. Whether buyer or seller, you do not have to accept any language printed on the form, and you can add other provisions you want. You can cross out provisions that unreasonably protect brokers, but the CAR forms do not have a lot of these.
  5. Brokers.  Do hire a broker. A good broker’s expertise is worth the money, even for someone like me who closes complex real estate transactions on attorney-drafted contracts.
  6. Terms.  On the CAR form, the pre-dispute mediation provision aids neither buyer nor seller. You should strike it. If you are a seller, you want the arbitration provision, because it greatly favors the seller. Buyers should refuse the arbitration provision in all cases.
  7. “As-is” provisions.  Often it is acceptable to buy “as-is,” because California law will not enforce a comprehensive “as-is” provision. ALL sales of anything in California include the seller’s obligation to make full disclosure of all known factors material to the decision of a potential buyer.
  8. Avoid dual agents.  A single agent representing both buyer and seller typically means that neither side receives complete, unbiased representation. If you are a listing party, you should prohibit your agent from representing the buyer unless you approve on a case-by-case basis, and make sure that the listing agreement so states, clearly.
  9. Spousal agreements.  If you and your spouse decide to hold real property as anything other than as “community property,” be sure to have an attorney prepare a marital agreement in proper form. Oral agreements are not enforceable; even written agreements require careful drafting. Make sure the writing is signed before anyone can forget exactly what was agreed.

10. Disclosures.  The legal standard for required disclosure is very broad. Any “material” omission can lead to litigation even in an “as-is” sale. If you are a seller, be sure to get your facts right on your disclosures. Don’t rely on memory. Provide copies of the inspection reports created when you bought the house, and of the inspections made by anyone at any previous time you thought about selling or investigated your property. Take your time and do a very thorough job. A legally proper disclosure should include from 50 to 1,000 pages, depending on how long you have owned the property and its history. If you just have 20 pages, you are not done. 

If you are the buyer, read between the lines and ask questions. If the sellers disclose they filled in the swimming pool with all proper permits, ask why they filled in the pool. Leaking pools are one of the most common causes of soils failure. (In fact, ask if any neighbor uphill has filled in a pool.) If the sellers disclose their driveway is on a recorded easement over a neighbor’s land, ask if there is a written maintenance agreement and ask how maintenance is handled. For every report of “remodeling,” ask if any repairs were undertaken during the remodeling. Ask how often the sewer line is cleaned. Make written notes of everything the seller or the seller’s agent tells you about the house that is not also on a written disclosure statement. Write down who made the statement and date your notes. Keep your notes.

11. Investigations. Be cautious in using home inspectors from the home inspector industry, unless you have a great rapport with your broker-owner and are satisfied of his/her honest view of a particular inspector. Try to use an actual contractor or other tradesperson. Home inspectors want to disclose everything, which is good, but they often minimize the significance of their findings. If a home inspector sours a deal, the broker may try a different inspector next time. At a minimum, if a home inspector recommends calling a soils engineer or any other expert for a further look -- call a soils engineer or expert for a further look.

12. Title companies and Escrow. In Northern California, the title company is also the escrow agent. This creates a tricky conflict of interest, because you need title insurance and you need your transaction to be handled correctly. Be as careful selecting the escrow agent as your broker. By custom, the buyer will pick the title company, but a seller should ask the buyer to designate an escrow agent, too, and check out that agent. The escrow agent will process the transaction for both buyer and seller, so sellers can object to the escrow agent proposed by the buyer.

13. Insist that the escrow officer does the officer’s job. Always insist on sufficient time to review documents before signing. Do not accept advice on the documents, such as on the language of the deed, from the escrow agent. Talk to your broker (if the broker will talk to you, but most will not for liability reasons) or talk to an attorney. Almost never will the escrow agent know enough about your personal situation to advise you accurately on how you should hold the title. 

14. Follow up thoroughly after escrow closes. Make sure you promptly receive copies of all documents from the escrow officer and check them for proper recording. Verify that the escrow agent has properly dispensed all funds and recorded/mailed all documents. Either buyer or seller may be making payments to third parties (brokers, lienholders, creditors) through escrow. Make sure that the payments you directed are received. Make sure that all Iienholders formally release all liens. (Escrow agents are insulated by law from liability for failing to ensure that lien releases are recorded, so that critical job falls on you.) If you have an estate-planning revocable trust, you will probably need to move the deed into the trust; if the deed is to one spouse because the other has lousy credit and the house is purchased with community property, get the transfer deed recorded. 

Recommended Local Businesses

Is There a Safe Way to Use Business Forms Found on the Web? Tips for a Successful Home Sale or Purchase
  
Is There a Safe Way to Use Business Forms Found on the Web?

Sometimes clients bring me a form from the web or an on-line legal service, hoping the form will be “good enough” to protect their assets or document their deal. Unfortunately, my experience is that many times, the proposed form will instead cause legal harm by creating new liabilities unappreciated by the client. Just as unfortunate, in nearly all cases, the form fails to provide the legal protections, deal certainty, enforcement provisions, or statutory compliance that the client desires. 

What is so different from my use of forms and adapting them to a business’ legal needs compared with the results when even experienced business people grab forms from the internet or a question-and-answer legal service?

In my opinion, success with business writings requires a thorough understanding of contract law combined with practical experience interpreting and enforcing business writings.

First, the common -- but false -- belief that a “standard form” exists leads some businesses to adopt a form based on the title and general context alone. Business contracts are not fungible commodities reusable from one situation to another.

Second, in my experience, most business people do not understand how particular contract terms benefit one party, disadvantage the other, or may create undesired tax liabilities.

Third, careful identification of business goals and needs is essential to successful development of effective business forms. All business writings must contain language that promotes and reinforces the needs of that specific business.

Fourth, unless a business has suffered from a previous bad contract, folks do not understand what types of contract terms are practical to implement and what terms make enforcement so burdensome that the contract is, effectively, illusory.

The take away:  The precise words of a business contract must match that business’ objectives. Casual use of a form without legal insight can create a tax headache, expose the business to unnecessary liabilities, cause the loss of trade secrets, waive enforcement opportunities, and create an expensive legal challenge where a proper writing could have simplified resolution.

An attorney preparing standard business forms, employment policies, or transaction documents, should review with the client: 

Quality business agreements and forms provide essential protections from liability and expense that cannot be obtained any other way. Remember, in business law, an ounce of legal protection is worth 16 tons of cure.

Warhurst Law Office recommends these local businesses:

Recommended Local Businesses
Click the logos below to go to the business' website:Menlo Chevron

Menlo Chevron on the corner of El Camino Real and Oak Grove Avenue in Menlo Park delivers quality gasoline, vehicle repairs, and tires. Stop inside for the f'real milk shakes!

Pamela McGee, Mortgage Services

Pam McGee has over 20 years of experience helping families find the right loan for them in the San Francisco Bay Area.

MassMutual Pacific

Robert Tracy, Investment Adviser Representative, Foster City.

Greg Agosti, Intero Real Estate

Greg Agosti, Intero Real Estate, represents buyers, sellers, and lessors of commercial and residential properties. A master negotiator with extensive resources and experience, Greg can make any real estate project a success.

Teo Hernandez, Comerica Bank

A personal banker in the San Carlos branch, with more than 15 years experience, Teo Hernandez provides engaged, individualized service to her customers.

Robert Stafford, Stafford Realty

Robert Stafford expertly manages the complexity of the real estate entitlement process.

Bynn Esmond Designs

Bynn Esmond brings passion and technical skils to interior and exterior design projects ranging from single-room redesigns to kitchen and bath remodels to whole house interior and exterior construction projects.

Bay Area Law Enforcement Assistance Fund

Bay Area Law Enforcement Assistance Fund is a non-profit providing support to law enforcement families who have experienced a member killed in the line of duty or sustained serious injury.

Pete Hixson, Valley Computer Care

Pete Hixson delivers experienced, proactive attention to all IT needs.

Dr. Mark Daly, Belmont Advanced Chiropractic

Dr. Mark Daly, Belmont Advanced Chiropractic, has been supporting healthy living for over 20 years.

David Sawyer, State Farm

David Sawyer, State Farm insurance agent -- your risk manager with personalized attention.

Dr. Stephen Yang, Yang Orthodontics

Orthodontist Stephen Yang, DMD, MS, Redwood City, helps you get the beautiful smile you deserve.

Nori Jabba, Jabba Development Strategies, LLC

Nori Jabba, Jabba Development Strategies, LLC, provides development consulting services for smart growth.

Brian Hanson, BMH Electric

Brian Hanson, BMH Electric LLC repairs or remodels commercial and residential buildings with efficient and quality service.

Ann Palermo, Old Republic Title

Ann Palermo, San Carlos branch, understands the value of response time, quality communication, and accuracy.

Go To Chocolate

Michael Hohenthal handcrafts unique, highest quality chocolates. Exquisite taste defined.

Johnson Lyman Wealth Advisers

Rob Lyman in Los Altos specializes in helping business owners plan for the successful transition out of their business.

Schoenstein Physical Therapy

George Schoenstein and his team offer years of clinical experience to address the medical conditions sent to them by doctors.