Question: I own a business and currently have it on the market. My broker had an offer on the place which I agreed to. The expiration date on the buy and sell agreement came and went and I learned it was my broker that was the buyer. He formed his own LLC corporation and put it down as the buyer. He never placed the money into the escrow account. My property was tied up for months. I call his office and visited his office and he is never available. What can I do?
Answer: If what you say is true, if what you say can be verified, you should immediately contact real estate regulators. Be sure to hold onto all written offers and other documents. Regulator contact information can be found at ARELLO.com .
In most jurisdictions, if not all, a broker has an obligation to disclose any personal interest in the purchase or sale of a property. This disclosure requirement routinely extends beyond the broker directly.
As an example, Maryland real estate regulators say that a "licensee may not acquire an interest in, or purchase, personally, for any member of the licensee's immediate family, for the licensee's firm, for any member of the firm, or for any entity in which the licensee has any ownership interest, property listed with the licensee or the licensee's firm without making the licensee's true position known to the listing owner. In selling or leasing property in which the licensee, the licensee's firm, or any member of the licensee's immediate family or the licensee's firm has an ownership interest, the licensee shall reveal that interest in writing to all parties to the transaction."
In the case of a home that a broker has listed and then wants to buy, the broker may have inside information obtained in his role as a listing agent that would not be available to an arms-length buyer.
Moreover, the broker helped set the price and terms of the sale. The potential for conflict is enormous.
As to deposits and such, the purpose of a deposit with a buyer offer is to protect seller interests. Most jurisdictions have strict rules regarding escrow funds.
Lastly, when a broker lists your property he is your agent. If he is also buying the property he plainly has an adversarial position.
Brokers should be allowed to buy properties, including in certain circumstances properties they originally listed. However, in such instances it is necessary to assure that a seller has separate and independent representation as well as full and proper disclosures.
Question: How do I find what area in my city is the most attractive to home buyers?
Answer: You might check two numbers with local brokers : First, how long do homes remain on the market in various neighborhoods. Second, what percentage of asking prices are actually received by sellers.
Question: I have a problem with a title company that I used to close a house. After three written letters to the company they're unwilling to resolve an issue that they should correct.
Answer: Did you send your letters by certified mail with a return receipt? That may help.
There are two steps you can take. First, you can have an attorney review the matter and then send a "demand" letter if appropriate. Second, you can file a complaint with your state insurance commissioner.
Question: I placed my home on the market about 60 days ago at $539,000 with a broker. At the time I spoke with a reputable appraiser who indicated that this was appropriate. We dropped our price twice and it's now at $515,000. We have only had a few walk-throughs in the last 60 days. Good feedback on look and price -- just not the right house for each.
My broker has indicated that this price range in this area is a very tough one right now. How do I know if this is true or not?
Answer: If the broker was wrong the house would have sold.
Your situation reflects a reality in many markets: Homes are taking longer to sell and as they remain on the market longer, prices are moderating. In the context of your sale, the asking price has fallen less than 4 percent and that's hardly unreasonable.
Your feedback has been good, so what you really need is more traffic. Speak with your broker about the next steps which need to be taken that would be most effective in your marketplace.
Question: What should I do if a seller refuses to move out? Escrow closed in April. We let her stay in the home as part as escrow agreement for 30 days after escrow closed. We extended that till the end of May. She still will not leave. What is our next step?
Answer: It's your property. Charge rent on a daily basis -- and have the rent increase 10 percent each day. Then take the seller to small claims court to collect. However, if you're in a community with rent control charging "rent" may set off certain requirements that you want to avoid. Speak with a local attorney for details.
Question: I'm planning to build four duplex units. As interest rates are rising, I'm trying to get an accurate picture of the local rental market and what a realistic rent expectation should be. This is needed as I want to compare the information to my financial costs, construction, taxes, insurance, fees etc.
How do I conduct an analysis?
Answer: You're best investment option is not building four duplex units anytime soon. You lack the most basic information needed for investment decisions. If you were to start such construction at this time the probability of success would be just about zero. Put another way, you would be chum for marketplace sharks.
If real estate investing is of interest, then you need to learn the game. The easiest way to start is to get a real estate sales license so you can get the basics. Local real estate brokers can tell you more.
Question: My vacation home is part of a large number of homes 'For Sale' in my community. It's a buyer's market. I'm hoping to take advantage of the summer market to make a sale. My home is listed with a broker, but is there is anything that I can do on my own to display my property on as many other venues as possible, for instance the Internet?
Answer: When you retained a broker to sell your home that individual must have presented a marketing plan which would be appropriate for your community and your specific property. In this era, brokers routinely post homes online with MLS systems, their web sites, their broker's website, perhaps their franchise and in other ways. Also, when homes are advertised in local newspapers and real estate guides, such ads also appear online.
Most probably the best thing you can do is to review the marketing plan with your broker to assure that all promised promotions are underway and to keep the house clean and neat in case would-be buyers drop by with little notice.
Question: We recently signed a contract to purchase an existing home for $236,000. The appraisal came in at $226,000. We have already paid the $100 offer fee, the $300 appraisal fee, the $75 pest inspection fee, the $200 home inspection fee. If we now back out of the contract because of the low appraisal what are our liabilities? Will the seller have the right to sue or demand damages?
Answer: You need to read your sale agreement. Does it require that the appraisal must equal or exceed the sale price? If yes, what you have is a contingent agreement -- and the appraisal was not satisfactory.
If you did not have an appraisal contingency does the agreement say that you will obtain a certain level of financing and only put so much down? If the property does not appraise for the sale value then you may not be able to get the financing required by the agreement. In effect, the financing requirement may offer another contingency.
All of this is conjecture, however, You need to have an attorney look at the sale agreement to determine exactly what it says -- and does not say.
Question: I bought an expensive house ($1.3 million) with the typical disclosure statement from the owner (all items checked "no"). I also had a home inspection. After closing and moving into the house, we discovered it had significant rot on dormers and chimneys and that the asphalt shingle roof was at the end of it's life expectancy after only 14 years old. A missing chimney cap was replaced but there was no mention of rot on the chimney facing. The owner was older and probably was never on the roof. The inspector was older and didn't go on the roof, but looked at it with binoculars! The estimate on repairs including new shingles is over $25,000. Any suggestions?
Answer: Seller disclosure forms are useless because owners in good faith often do not know the answers to various questions. The use of a home inspector was a good idea. The age of either the seller or the inspector is irrelevant, the important measure is capacity.
The question to be asked is whether the inspector's use of binoculars is a standard and reasonable practice in your jurisdiction. Was it the inspector who recommended replacement of the chimney cap?
How was the rest of the damage detected? Did the inspector recommend a physical inspection by a roofer?
Before going further, it seems unusual that a 14-year-old roof would need replacement. At the very least, have another roofer take a look and give you an estimate. You may get a different result -- and you may discover that your inspector was right.
Question: My loan was sold but I was never notified. Nothing. What can I do?
Answer: The fact that your loan was sold is not an issue -- lenders have a right to sell loans. However, they also have an obligation to make sure that you know where to send your payments and that accounts are properly kept. As well, the loan terms cannot be changed by the new lender.
Under RESPA -- the Real Estate Settlement and Procedures Act -- if you send a full and timely payment to the old lender then the new lender cannot charge a late fee or other penalty for 60 days. Since there are penalties for lenders who violate RESPA standards, most lenders will do what they can to assure that you're able to make payments to the proper address.
If you have questions or concerns, contact the new lender by certified mail with a return receipt requested. If that does not work, contact the consumer affairs office of your state attorney general.
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