MANAGING THE SETTLMENT IS THE FINAL AND VERY IMPORTANT STEP IN SELLING A FSBO, Chapter 8.
* * * * HARD CORE REAL ESTATE TALK * * * *
LENN IS PAID FOR WHAT SHE KNOWS, NOT FOR WHAT SHE DOES!
Reference is made to the recent posts of Gary Bolen and comments thereto by Bob Stewart about agents getting the message out describing [justifying] the services provided to home buyers.
Specifically, Bob Stewart suggested that we write about the duties outlined in my post of November 11, 2006:
1. Make the appointment
2. Show the home
3. Provide the required disclosures
4. Write the contract and escrow
5. Manage financing for the buyer
6. Manage inspections
7. Manage the title work
8. Schedule the settlement and manage settlement services
Today's chapter describes the Buyer's Agent's duties in connection with the final walk-through and attending the settlement meeting when selling FSBO listings.
THE PRE-SETTLEMENT WALK-THROUGH. Most Contracts of Sale will provide a time frame for the Buyer and their agent to visit the property and walk-through to make sure that the property meets the "Property Condition" paragraph in the Contract of Sale. It's a good idea to bring a list of items to check. This is an important meeting because it's the Buyers final opportunity to test the appliances and systems where possible and observe that the Seller has completed any items agreed to be repaired or replaced if agreed to in the Contract of Sale.
Once the Buyer has tested the systems and appliances, walked the property generally to make sure that the property is being conveyed in "substantially the same condition as when first visited, the Buyer needs to sign a Walk-Through Inspection Sheet. This document is important for the Buyer's Agent's file and verifies that the appliances and heating, cooling systems, where tested are in working order. If the Buyer is receiving a Home Warranty (recommended), this document will verify that the property conveyed with the systems in working order.
If any of the systems are not in operating condition at the walk-through, this notation will be made on the Walk-Through Inspection sheet. The Buyer's Agent will notice the title company that there is a walk-through item that must be either paid at settlement by the Seller to the Buyer an amount of money to cover repair or replacement. It's important that the title company be noticed quickly because the value of the repair or replacement will have to be credited to the Buyer by the Seller on the HUD-1 or money escrowed to cover repair or replacement. The title company will prepare the documents.
Selling FSBO homes means that the Seller is not represented and the Buyer's Agent does not advise the Seller in any matter. If there is a walk-through matter, the title company will advise the Seller of the credit to the Buyer for the item not in operating condition as a requirement of settlement. FSBO Sellers often do not understand that settlement is at risk if they do not agree to the credit or escrow for payment. However, unless the Buyer agrees to negotiate an acceptable amount or agrees to accept the item "as is", settlement should not take place. Most Sellers understand this matter, but the risk of a walk-through problem is most likely to occur with FSBO Sellers rather than with represented Sellers.
The New Deed. The title company will prepare the new Deed in conformance with the agreement of the parties to the Contract of Sale and in compliance with local and state laws. Most states require that deeds be prepared by licensed attorneys.
Closing Meeting. Depending on local custom, the title company or attorney will conduct a scheduled meeting for the Buyer to sign the Buyer's documents and pay the money required based on their agreement and loan. The seller will attend either at the same meeting or a separate meeting to sign the deed which transfers the title to the new owner.
The Buyers Agent will prepare the Home Warranty, if any, and make sure that the title company file includes a copy of the application and payment.
Title Company Duties After Settlement. The title company will record the new deed in the local land records office. They will also make the required pay-off, if any, for the Seller to the Seller's mortgage company.
Notary Closing Agents. If your buyer has determined that they wish to have settlement conducted by a Notary, the Buyer's Agent will, by necessity, have to be in communication with the lender and the closing entity in far greater detail than with a conventional title company. The Buyer's Agent will provide the location for closing and give a very careful review of the documents before and after settlement. The Notary closing agent will not be able to answer any questions or explain any documents as would a conventional title attorney or title company officer. The saving involved in using a Notary for settlement, are a few hundred dollars.
There's a lot to do and the Buyer's Agent, as the only agent involved in the transaction will make sure that everything is completed timely and that all contingencies are removed as required by the Contract of Sale.
We will deal with the seller honestly and truthfully.
We will advocate for our buyer/client.
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