Three Legal Tips for a Fast-Paced Real Estate Market Curtis Bullock

Three Legal Tips for a Fast-Paced Real Estate Market

By Curtis Bullock

1. Don’t DIY Your Home Sale

I’ve seen this so many times and yet again this morning I read another case about a person who attempted to sell her home without the assistance of an experienced professional. The person was convinced they would save money doing it on their own. It ended up causing heartache, time, money and it could have easily been avoided. There was a lot more to it, but here is a brief summary of what happened. The home for sale by owner had solar panels installed on the roof. The solar panels were leased and required monthly payments to be made to the solar panel company. When a buyer became interested in the home, the seller was not familiar with the various legal aspects of the real estate purchase contract and how to coordinate the sale of the property with the assumption of the solar panel lease. Certain documents in the purchase contract were not included and ended up creating confusion for the buyer on what was expected regarding the solar panel lease and whether he was responsible to take over those payments. In the end, a dispute arose, litigation was threatened, and a settlement of several thousand dollars was offered. Eventually the transaction failed to close. I continue to see this sort of thing happen again and again. While the real estate market may be hot, there is a mountain of technical and legal information to be aware of when selling or purchasing a home. The best solution is to

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hire an experienced Realtor® who understands more than 85 different Utah contracts, forms, notices, disclosure laws and documents, agency agreements and how to get your transaction to the finish line. It will be well worth it.

2. A quick review of the “Time Clause” Addendum that was recently revised

Here are a few important technical legal points to be aware of with the recently revised Time Clause Addendum. 1) When using this addendum, the Seller has the right to continue to market the property, but may only accept a back-up offer. Use the Back-Up Addendum if this happens. 2) If a back-up offer is received and accepted by Seller, Seller may decide to notify the Buyer. Notifiying the Buyer will trigger the Time Clause and start the clock running on section 1B. 3) If Buyer receives notice of an accepted BackUp contract, the Buyer must decide whether to remove the conditions marked in section 1B of the Time Clause Addendum, within the agreed upon time frame given in 1B. If Buyer decides to remove the conditions, Buyer should use the new Buyer Notice to Seller of Removal of Conditions form and provide it to the seller. 4) Any additional earnest money required in 1C of the Time Clause Addendum would then need to be deposited within four days of removing the conditions in writing if Buyer decides to proceed with the transaction. 5) If Buyer does not agree in writing to remove the conditions after receiving notice from the Seller of the accepted back-up offer, the REPC is automatically cancelled. If this doesn’t make any sense to you, contact your Realtor® who is an expert on contract negotiations to help you through the process of buying and selling property.

3. A possible legal solution for sellers who would like to sell, but do not know where they are going to move

With the unprecedented low housing inventory, we are seeing sellers who either 1) get themselves into a purchase contract that they want to later get out of, or 2) are reluctant to put their home on the market for sale in the first place. The seller’s fear is that with the low inventory of homes on the market, they won’t be able to find their next home and have somewhere to relocate to after they sell. One contractual option for the seller to consider is to include a contingency that allows them to find a home and go under contract by a certain date. If that doesn’t happen, the seller would reserve the right in the contract to cancel the REPC without penalty, and the earnest money would go back to the buyer. Both parties are protected by using this approach. The Subject to Seller Acquiring New Residence Addendum incorporates this concept and may be helpful to your clients. This is a standard Utah Association of Realtors® form that has been recently updated so give it a read and use it when it makes sense to your clients and their situation.

Curtis A. Bullock is an attorney and CEO of the Salt Lake Board of Realtors® .