| When Larry and
Beth decided that the time had come to sell their home, they
asked themselves: "Why do we need a real estate agent? After
all, an agent will charge thousands of dollars to sell even an
average home, and that commission comes right off the top!
Heck, with the Internet and all, we can do practically
everything that an agent would do, so why should we pay out
all that money?" Many home sellers have similar thoughts, and
because so much money is at stake, these questions deserve
some serious thought.
Any real estate agent can give you an impressive list of
reasons why it makes sense to hire a professional to help you
sell your home, and from a marketing perspective, there are
indeed many benefits in doing so.
An experienced agent can
utilize any number of marketing opportunities and strategies
that the typical "For Sale by Owner" (FSBO) does not even know
about. For example, only a professional agent can take
advantage of the Multiple Listing Service, organized tours,
etc. However, there is another reason to seek professional
help in selling your home; an important reason that you may
not have thought about.
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 in the
sellers. Of all the things you want and expect from selling
your home, a lawsuit is probably not one of them. |
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| Unfortunately,
residential transactions have seen an alarming increase in the
number of claims and lawsuits. Of these claims, the majority
are filed against sellers, by their buyers. Home sellers who
think they can "go it alone" might want to seriously ponder
the observations of a lawyer who has defended many sellers and
real estate agents against claims made by "the Buyers from
Hell."
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. Also,
bear in mind that a simple missing word, or a mistake in
grammar can create a dispute which, in turn, can give rise to
a lawsuit. Aside from the problem of drafting the contract
language itself, sellers can face other dangers as well. For
example, did you know:
•
that buyers who look for "FSBOs" usually offer 6-10% below
the price of comparable properties because they know you are
not paying a commission?
•
that there are substantial risks involved when a seller
agrees to "carry back" a note from the buyer; risks that can
cost you thousands of dollars?
•
that your good credit rating can be ruined by your buyer's
default, many months, or even years, after that buyer
"assumes" your loan?
•
that a clever buyer can stay in possession of your property
for many months after he defaults on the contract, and in
effect "live for free" at your expense?
•
that most buyer complaints
involve alleged damages of less than $10,000, yet you could
be forced to spend thousands in attorney's fees to defend
such a claim?
•
that alleged failure to
disclose such things as previous repairs, insects, exact lot
lines, and the presence of certain types of mold/fungus in
the property are the source of many lawsuits against
sellers?
In short, a lawsuit can ruin
your whole day! Even if you know that the buyer's claims are
completely bogus, it can take many months and many thousands
of dollars to prove that you are "innocent." What's worse, you
have no "malpractice" insurance to pay these bills; you will
have to write all the checks yourself. And, of course, you
could lose ... and losing a case like this can be disastrous.
You and the buyer have a contractual relationship, and sellers
who lose such suits can find themselves having to pay not only
the amount of damages awarded to the buyer, as well as their
own attorney, but they may also be ordered to pay the fees of
the attorney who sued them! |
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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
clients' interests.
Now, there are
any number of reasons why your buyers may decide
to take action against you (sometimes, they just
don't feel like making the payments any more).
However, most of these complaints allege problems
with the condition of the property, and/or
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
including effective "AS IS" and other clauses in
the contract language, and by providing for such
things as a professional home inspection, and a
home warranty.
When a problem
arises in the transaction, an experienced agent
can move swiftly to "nip it in the bud." Their
thorough understanding of the myriad facets of
modern transactions can help them to identify the
real problem, and to either solve it themselves,
or by calling upon resources that the typical
seller simply does not have access to.
There is no
escaping it: the best way to deal with a complaint
is to prevent it in the first place. The organized
real estate community has spent a lot of time
thinking about how to reduce the likelihood of
claims, and has responded to this threat in a
number of ways. For example, the standard contract
forms that most agents use are chock full of
language which can help protect you, and reduce
your exposure to claims and litigation.
Of course, I
don't mean to scare you with all this! But hey, it
is a jungle out there. Indeed, I've only touched
on a few of the pitfalls of selling your home on
your own. Take it from someone who knows: selling
your home without professional help is very risky
business indeed. Yes, it costs money to employ a
real estate agent, but if you find the right one,
you will likely be able to sell your property
faster, while at the same time reducing the
chances that your buyer will come back to haunt
you.
About the
Author
Phoenix, Arizona, attorney Robert N. Bass is a
nationally known authority on broker liability
defense and risk reduction for real estate brokers
and salespeople. He concentrates his practice in
defending errors and omissions claims and license
complaints against licensees. He can be reached at
Robert@BassLawFirm.com. |
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