Monday, July 18, 2011

Q: We were right in the middle of the process of buying a house and the sellers took an offer from somebody else.

They claimed that because there wasn’t a legal description attached to our offer the sale wasn’t any good. Have you ever heard of that? The address was listed on the purchase and sales agreement and I don’t know why that isn’t enough.

A: A full legal description must accompany all offers according to state law. This has been repeatedly upheld by our courts. It’s not a binding agreement without the legal description. It also must be the full legal description, not some abbreviation, and should preferably be from a title company.

Many Realtors have been getting by for years with just an abbreviated legal description or none at all. As long as both the buyer and seller are motivated to close it doesn’t become an issue. However, if either party wants out of the contract they can use the excuse that there was not a full legal description attached to the contract and signed or initialed by the parties.

I would guess that your sellers got a better offer and were looking for a way out of your transaction. There are almost always loopholes that can be used to walk away from a contract. These days there are so many issues that must be addressed in an offer. The average purchase and sales contract with addenda is at least 12 to 18 pages long.

It’s always a good idea to carefully read every word in those documents and get a clear answer to any questions you may have. Consulting an attorney is a good idea if you are not sure you understand everything. You might consider having an attorney look over the customary forms used by the Multiple Listing Service before you make an offer just to be sure you understand them. Most experienced, knowledgeable real estate brokers are, of course, very familiar with these forms and can give you some guidance as well

Wednesday, July 06, 2011

Q: My wife and I really liked that property you showed us last week but I think the price is too high.

I looked it up on Zillow and they say that it’s worth a lot less. We might still want to make an offer but it would be for about 20% less than the asking price. I was surprised that you didn’t suggest a lower offer. You have on other property we’ve looked at in the past, so why not this one?

A: First I should tell you that it sold last weekend, probably for full asking price. I understand there were multiple offers. Determining value, especially in our small localized market, is very challenging. What I can tell you is that the house you looked at, like some of the others that are selling quickly, was well priced for our local market.

I should also caution you against using Zillow, or any other similar online site. These sites operate on computer generated information that is often wrong, and they attempt to give values for markets all over the country with no knowledge or understanding of the issues in each local area.

Currently, Zillow is showing homes for sale on Vashon that have sold and closed. They even have some homes that were taken off the market weeks or months ago still showing up on their site. They simply can’t be relied on to give accurate information, especially on market value. There are homes for sale that they don’t list on their site and incorrect information about many properties. People should really only use the websites of local Realtors in each market area.

Buyers are wise to research everything they can about housing, local schools, issues in the community and anything else that helps them make an informed decision. But please, don’t rely on these online companies to be accurate.

Using a Realtor with experience and knowledge in their local market, one that’s properly representing you, is a far better way to determine when a property is over priced or when it’s a good deal. Better luck next time.