This is a grey area because each state can be very different in regards to the agreement of sale. Even though I can do mortgages in any state, I only focus on a few myself. This is where the realtor and lender need to be on the same page. This is where the client needs a good realtor that understands the ins and outs of a purchase contract. There is nothing worse then when I have to advise the client of what they can and can’t do, because the realtor didn’t advise them correctly. And don’t get me wrong, I just give them feedback based on my experience, but tell them that they need to seek a good realtor and sometimes a good real estate lawyer. And I am not implying that anyone in here doesn’t know what he or she is talking about.
A good example is that once contracts have been sign in the state of New Jersey, you have 3 days for an attorney review period. You could go all the way to the West coast in California and this would be totally different. In California, the client has 17 days of which they could decide if they want to cancel the contract. In Maryland, you have a recordation tax and the state stamp tax. Both of which are up to the seller to decide who pays for this. Many of these examples take place because these clients are buying and or selling between friends, family, or even their current landlord. And there could be legal issues at hand.
The two main things that I wanted to get out of this blog is not only to educate the client, but also to educate both the loan officer and the realtor. I have done a few purchase transactions lately in both states that didn’t have a realtor involved. And in both cases, I told them that they should seek a realtor or an attorney, just to be on the safe side. So many people want to cut corners and expenses, not realizing that this could be a bigger expense than they expected. You ask what expense could you possibly incur? How about risking your deposit?
I would also like to get an idea from each one of you, as a realtor in your respected states, what the state requirements are when the contract / agreement of sale becomes a legal binding contract. At which point there is no way out of this agreement unless your financial institution denies you.
Best advice, if doing this on your own; seek a realtor or a lawyer. There are several realtors that will do this for a small fee, just to make sure that everything is in order.
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