Rain City Guide

Should Loan Originators Retract Preapproval Letters?

Rhonda

Unless the pre-approval letter rose to the level of a contract, I don’t know how the mtg company would be liable for not granting the loan.

Russ

Are YOU a Contractor?

July 22, 2007 was the effective date.

I think the new law would apply only for work done on or after the effective date. My guess is that the Dept. of Labor and Industries will be relatively lenient in enforcement until they get rules in place. I’d have to think about whether the fact that the seller was not registered would be a disclosure item. I’ll reply back tomorrow….

-Russ

Buyer Agency and Fiduciary = Nonsense

Hence, breach of the fiduciary duty to the buyer unless the buyer, in advance, authorized such “elimination” of otherwise desirable properties.

-Russ

Buyer Agency and Fiduciary = Nonsense

Can anyone else (besides Ardell) provide some guidance on what this means in the context of the article?

“We call [inadequate splits] ‘getting eliminated at the office.”

Exactly what does this refer to?

-Russ

The Legislature Volleys Back....

Craig

I agree. I guess in tennis lingo, it was a weak volley where the savvy seller can still slam it in for the kill shot.

I believe the law is where it should be. Seller’s must disclose what they know and not lie nor conceal defects. Buyer’s must exercise due diligence and thoroughly investigate the property and its title. In the end, the market conditions will dictate what level of additional protections via warranties that the buyer can extract from the seller.

This will make the job of the agent to actually “negotiate” terms of the sale that much difficult.

Russ

Are you leaving too much on the table?

Typically, “funds available to the seller” does not mean that the seller actually has to have the funds in their account. Just that the funds have been authorized for release through escrow.

-Russ

While I was away.....

Ardell,

The reason that we have three branches of the government is to provide checks and balances. If you look at what our legislature has and continues to do with regard to consumer rights, you will see a strong move to protect the consumer. Did you know that there is now a “Vacant Land” version of Form 17 that will likely pass in this session? The courts, being the other body that “makes” law, sees this and I think wants to temper the “enthusiasm” for consumer protection so that buyers and sellers are operating on a level playing field.

So if we look at the current landscape of buyer/seller relations with respect to the purchase and sale of residential real estate, we have an obligation on most seller’s to disclose what they know and to not lie about it. We have the corresponding obligation of buyers to not be “little lambs” in the process and to perform their own due diligence to determine if what the seller says is true. At the end, the courts have now said that (absent unequal bargaining power), the courts will look at the contract to determine who gets what if there is a post-closing dispute involving economic damages. Seems fair to me.

p.s. Like Holly says, “Of Counsel” means that I am not an associate nor am I an owner. It is a common place for senior attorneys who make a lateral move to a firm and allows both the firm and the lawyer to get to know each other before they wed.

-Russ

Leave it to Marlow...

Galen

23%???

Let’s just say that most agents would readily admit that the “average” house that is priced 23% above its eventual sales price is WAY overpriced, at least if you want to sell it within a reasonable time frame.

Russ

Get out your boxing gloves! Attorneys vs. Agents

Jillayne

Hourly rates for real estate lawyers are across the board. I think it probably ranges from high 100’s to low 300’s.

While I don’t do a lot of residential transactions these days, in the past I would usually quote the client 2-4 hours of time for document review, consultation and drafting an addendum which is many times recommended. I believe some attorneys (Craig I think) will do this work on a flat fee. He can chime in if he wishes.

Does that help?

Russ

Get out your boxing gloves! Attorneys vs. Agents

Marlow

First, I’m OK with your goal. It does work in many cases.

Here’s the rub. That damn disclaimer. Agents prepare the PSA (filling in blanks and maybe writing stuff) and they insert the “company addendum” with many self-serving clauses like the one above. That clause essentially means that the agent who has written up the deal has (1) not told their seller or buyer client what in the heck all of the mumbo jumbo means and (2) even if they have told them, the client is not supposed to “rely” on it (meaning, don’t trust what the agent says cuz they are not a lawyer). Hmmmm.

You absolutely, positively cannot discuss a PSA without discussing the consequences of the words. And you cannot, in my opinion, properly represent a client in a RE transaction if you don’t explain what the heck they are signing. My issue is not that agents want to be the “lawyers” in the transaction. As I have said many times, that fits how we do business out here. My issue is really that the agents (and their companies) want their cake and frosting too. They want to BE the lawyers but they don’t want the responsibility of BEING the lawyer (hence the disclaimer). I find this wrong.

-Russ

Where's the line between "agent" and "lawyer"?

Ardell,

You said “So you think maybe the court would find it unacceptable. In fact you’d bet on it. But you are not saying it is illegal. So we agree. At present it is not illegal and there is no law that makes it so, at present.”

Did you read comment 16 above? If you read it, how in the world could you come to this conclusion?

-Russ

Where's the line between "agent" and "lawyer"?

Ardell,

You are so selective about what you want to quote and what you want to ignore. It is NOT all or nothing.

You quoted: “However, the Court decided that, in the interests of an efficient real estate market, an agent should be allowed to engage in the limited practice of law.”

True, BUT ONLY when the agent is filling in the blanks on a pre-printed lawyer approved form

AND ONLY when the agent is acting as an agent in the transaction

AND ONLY in the usual course of the agent’s business

AND ONLY when the agent is not getting paid for the service of completing the form

AND ONLY when the transaction is “simple”

Hence the word “limited”. There are actually limits that apply. Ones defined by the court, not you Ardell or Craig or me.

Go back and re-read my Oil and Water post. PLEASE. Since you probably won’t do that, here is what I said.

“Although Craig may differ on this point, I am NOT of the opinion (at least here in WA state) that all residential deals should go to attorney for review. The standard forms are great for the ‘run of the mill’ deals and most (good) agents are plenty skilled at filling out the forms. Where I have to scratch my head is with the deals that are a bit out of the ordinary. Where the blank addendum becomes a significant part of the deal.”

I believe that the MLS forms are sufficient to address the “simple” deals that the court talks about in Heritage House. I also believe that the use of Form 34 when used for some simple additions or deletions to the standard form also falls in the context of a “simple” transaction. I also believe that the more words contained on Form 34, the greater the liklihood that the transaction is moving away from “simple” and more toward “complex” and therefore outside of the agent’s LIMITED authority to practice law.

Self-serving? Hardly.

You still did not answer the question I posed in my earlier comment. Would love to know your answer not based on a world that Ardell would like to see but rather the world we know to be under Heritage House.

-Russ