Ask Realty Times - October 29, 2004
by Peter G. Miller
Question: What happens if I do not escrow taxes and the seller has agreed to pay all closing costs? Answer: When the seller agreed to pay all closing costs it was understood that there would be certain expenses to complete the sale, a list that might include title insurance, transfer taxes, loan discount fees (points), etc. The seller has an obligation to bring property tax payments current through the date of closing. Money for property taxes and insurance coverage after closing is a responsibility of the buyer. I do not see future property taxes and insurance as a "closing cost" in the sense of being a seller obligation, otherwise a buyer might elect to stash away property taxes for the next 90 years at closing and say the seller is responsible. To clarify matters, everyone would have been well-served had the seller agreed to a specific closing obligation (say the first $5,000 in closing costs or whatever number was negotiated) rather than "all costs," an expression that may be debatable. Question: I just passed my real estate licensing test and I'm scheduled to start training at a real estate office. I will be working full time. I'm feeling overwhelmed because I do not have a lot of extra money (paycheck to paycheck), and I know I have to advertise and pay other costs. How much should I set aside before I enter the field on a full-time basis? Answer: How much cash you'll need for the next six months or a year depends on such issues as the local economy, your preferences, your current consumer debts, etc. Given your situation, you may want to adopt a different approach -- start by working for a top producing agent and learn the game from someone who knows how to play -- and can start you immediately with a salary or a commission and a salary. Question: We live in Hawaii but have a 30-acre family estate in Missouri. We have had an offer of $1.3 million but feel it's too low. How do we determine the right price and terms? Answer: You have a substantial asset that is difficult if not impossible to be sold from a distance. The best approach is to hire a local Missouri real estate broker with experience in the immediate area and with similar types of property. Given your location in Hawaii, why not look for Missouri homes online, contact the brokers representing those properties and discuss your needs directly? As a place to start, a number of Missouri licensees can be found on the Realty Times' Market Conditions service. Be sure to ask about experience, education and references. Question: I'm currently renting a condo and I'm having difficulties obtaining a mailbox key. The people who lived in the condo before me never returned their mailbox keys. I went to the Postal Service and they do not service my apartment complex. The Postal Service said I need to contact the condo association. I have been trying to work with our landlord regarding this, and nothing seems to get done. The landlord keeps saying she is trying to get the keys back from the previous tenant, but I am getting very frustrated because I have not been able to receive mail. What can I do? Answer: It's the owner's responsibility to provide a key. That the former tenants have it or don't have it is not your problem. Contact the local post office and have them hold your mail so it can be picked up from there. Ask that they remove any mail now in your mailbox so it too can be picked up. Question: I just recently purchased a condo. I have water leaking in the bathtub and tiles in the bathroom are broken. For two months I have not been able to have a shower. The condo association is telling me that I am responsible for this. I believe that the previous owners should be responsible for this. It didn't just happen overnight, it had to be like that all long. What can I do? Answer: The general rule for condos is this: If it's in your unit, it's your problem. Did you not notice the broken tiles when the property was inspected? Was the property sold in "as is" condition? Is there a unit below you? If yes, did the neighbors notice any leaks before you purchased? Did the owners provide a seller disclosure statement? Did it say anything about the leak or tiles? Your first step should be to call a plumber to prevent further damage and to make the shower usable. If the neighbors say the leak is an old story and such information was not provided to you, then you may have a claim against the former owners that can be considered in a small claims court. Past plumbing bills might also help. Question: I was in the process of purchasing a home, but the papers were never signed by both owners. I had instructed my agent not to open escrow until both sellers signed. I paid for a home inspection that brought to light structural and fire hazard problems, plus the fact that there were many more animals living in the house than we were first led to believe. I canceled the agreement two weeks after making the offer. Unbeknownst to me my agent put the money in escrow without the signature. The seller is now trying to keep my $40,000 that was put in escrow. What can I do? Answer: The first question that arises is whether your offer was accepted. The second question is whether your representative followed your instructions. The third issue is whether there was any agreement to cancel. The fourth is whether there is any state rule to protect consumers requiring the broker to deposit your money in an escrow account after so many days. Unless there was language in the offer to the contrary, the general rule is that offers can be withdrawn at any time prior to acceptance. Once an offer is accepted, it then can then become a "contract" if various requirements are met. However, if the offer has not been accepted then there is no nothing on which to place a deposit. Plainly you have both a large amount of money at stake as well as a series of questions to answer. For assistance, work with a real estate attorney in your community -- and ask if the state has a real estate "guarantee" fund to protect the public in the event of successful claims against brokers. Question: We purchased a house under our names (my husband and I); however, our brother-in-law and his wife helped us with the closing costs. They insisted that we share the property because they shared with the closing costs. We thought that was how it was supposed to be done, so they lived with us for three years and also helped with the monthly payments. They helped some with little repairs. Soon after three years, they decided to move out and buy their own home. In the 14 years thereafter, they never helped with the mortgage or home repairs. Now, they are forcing us to sell or refinance the house and filed for partition and half and half split with the equity. Is this fair? (We granted half the property to them.) Answer: How are they forcing you to do anything? Have they filled suit? If yes, you need a lawyer. If no, what does the existing paperwork say? Don't do anything, say anything, or sign anything until you get professional assistance from an attorney. It's not possible to know what claims might or might not exist, or what -- if anything -- is reasonable compensation for the relatives without looking at the actual papers. For instance, did they pay a market-rate rental or did they rent at a discount? Question: If a buyer has a real estate agent but they (the buyers) show up at a seller's door to ask if they can see the home because they're only in town for a few more hours and their agent was not available, should the seller let the potential buyer in? Also, now that the seller has shown the home to the potential buyer without any agents present, does the seller have the power to renegotiate the commission that will be paid to their own listing agent because they have done the work of a broker by showing the home? Answer: To start, you do not know that the people who showed up at the door are buyers. In the cell phone era, their broker could surely contact your broker with background information regarding the ability of your visitors to purchase the home, their real estate preferences, etc. As to renegotiating commissions, if your broker has an "exclusive right to sell" listing agreement -- the most common format -- then he would be entitled to a commission whether you sold with him or without him during the listing period. The broker's sign, advertisement or participation in a local MLS service notified the buyers that the property was available for sale. The broker priced the property. By setting in motion a chain of events that result in a transaction, the broker may well have a good claim to a commission -- even if the broker did not show the property. Moreover, the broker's right to a commission from someone "introduced" to the property may extend past the listing term if it includes a "protection period." If you do not like your broker then when the listing agreement ends you have every right to act as a self-seller or to find another broker. Until then, make use of the broker you have retained -- and review your listing agreement with care.
This column is designed to provide accurate and authoritative information in regard to the subject matter covered. It is made available with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, or other professional services. If legal services or other expert assistance is required, the services of a competent professional person should be sought. | 
