Monthly Archives: February 2016

Blog Series: Do I Really Need a Real Estate Attorney?

 

All too often we are asked “I have a realtor, why do I need an attorney too?”[1]

According to realtor.com, the answer is “yes” if any of the following questions apply to your transaction:

Buyers

  • Are you an out of town buyer?
  • Are you buying a property that is a short sale or bank owned?
  • Are you buying a property that is part of an estate sale?
  • Are you buying a commercial property?
  • Are you buying a property that could potentially have some structural issues?
  • Are you buying a property in a problematic area such as a flood zone or areas with adverse conditions (tornado prone, radon, toxicity levels, etc.)?

Sellers

  • Are you selling a property that is in some state of distress?
  • Are you the heir or executor of a property whose owner is now deceased?
  • Are you selling a house with a non-cooperative partner?
  • Do you have that gut feeling that something could possibly go wrong based on knowledge you have about the property?
  • Do you have judgments or liens in your background?[2]

Even if none of the above applies, there are many other reasons why an experienced real estate attorney will prove to be a valuable asset to your buying or selling experience.

  1. Your real estate attorney only represents your rights and interests. A realtor may not step in to settle a dispute for fear of upsetting a party and losing the transaction.
  2. Your real estate attorney is trained to spot issues and solve problems that may not be readily apparent to others involved.
  3. Your real estate attorney is able to modify the “standard” contracts often used in residential transactions to avoid issues, problems, and disputes. Similarly, they can use your knowledge of the property to make the contracts most favorable to you.
  4. Your real estate attorney will walk you through your options throughout the transaction, including, for instance, if an issue arises upon inspection, or in the title work. They will be able to let you know whether you can walk away from the deal, and what will happen to the earnest money.
  5. Your real estate attorney will review and clearly explain to you the complex documents you will receive, including loan documents, title work, encumbrances, and closing documents.
  6. Your real estate attorney will attend the closing to ensure that no last minute issues arise, and that it progresses smoothly.
  7. And finally, your real estate attorney will give you the peace of mind of knowing you are in good hands!

As you can see, even if your transaction is “simple,” an attorney can provide you with valuable assistance and peace of mind so all you have to worry about is moving in!

Disclaimer:  Please note that reading and/or commenting on this blog post does not create an attorney-client relationship with Eustice, Laffey, Sebranek & Auby, S.C. absent an express agreement between the firm and the client.  Contacting Eustice, Laffey, Sebranek & Auby, S.C. or any of its attorneys or employees via this website or via email does not create an attorney-client relationship.

We would be pleased to communicate with you by email. However, please note that if you communicate with us-through this website, via email, or otherwise-in connection with a matter for which we do not already represent you, your communication may not be treated as privileged or confidential and may be disclosed to other persons.

 


 

[1] To be clear, we love our realtor friends and colleagues, and nothing in this post is meant to minimize the hard work they put in on a transaction.

[2] http://www.realtor.com/news/ask-a-realtor/do-i-really-need-a-real-estate-attorney/

Blog Series: Listing Contracts

While there are alternative sales methods, the first step for many sellers is to find and sign a listing contract with a realtor; most often the standard WB-1 “Residential Listing Contract – Exclusive Right to Sell” approved by the Wisconsin Department of Regulation and Licensing.[1]

As the name implies, by signing the listing contract you are promising that your realtor is the only one who will be able to list your home for sale during the period of the contract (hence the importance of finding the right realtor for you).  You are also promising that, if the realtor is able to procure a ready, willing, and able buyer, that you will work in good faith to close on the sale.  In return, the realtor promises to market the property and use his/her resources to bring you a ready, willing, and able buyer.

In exchange for their services, the realtor will earn a commission consisting of a percentage of the purchase price (typically 6.0%).  Notably, they may be required to share this commission with another realtor, especially a realtor who represents a ready, willing, and able buyer.

The standard listing contract states that the commission is earned if, during the term of the contract,

  1. Seller sells or accepts an offer for the sale of all or part of the property;
  2. Seller grants a buyer an option to purchase all or part of the property;
  3. Seller agrees to exchange property with a buyer;
  4. A transaction occurs which causes a change in ownership of the property; or
  5. The realtor procures a ready, willing, and able buyer who offers to purchase the property at the listing price and terms set forth in the listing contract and standard WB-11 Residential Offer to Purchase.

As you can see, under the standard contract the realtor may sometimes earn their commission even if the transaction does not close.  A ready, willing, and able buyer is defined as one who “has the ability to complete the buyer’s obligations under the written offer” delivered to you or your realtor.  If your realtor’s efforts result in the delivery of the offer, he/she will be due a commission.  The only buyers that do not result in the payment of a commission must be identified to the realtor in writing upon execution of the listing contract.

Even if no offer occurs during the term, in some circumstances you may be required to pay your realtor a commission down the road.  All potential buyers who (1) deliver an offer, (2) negotiate directly with you; or (3) attend a showing or discuss potential terms with your realtor during the term of the listing contract are “protected buyers.”  If, during a period (usually one year) after termination of the listing contract you make a deal with a protected buyer, your realtor will be due a commission.  This clause protects realtors against clients “running out the clock” on their listing contracts in hopes of not paying a commission.

If along the way you decide not to sell your property or that your realtor is not the right fit, you and your realtor may agree to terminate the listing contract.  Upon termination you will want to make sure to receive a list of any protected buyers so that you are not surprised by your realtor at closing looking for their commission.

Disclaimer:  Please note that reading and/or commenting on this blog post does not create an attorney-client relationship with Eustice, Laffey, Sebranek & Auby, S.C. absent an express agreement between the firm and the client.  Contacting Eustice, Laffey, Sebranek & Auby, S.C. or any of its attorneys or employees via this website or via email does not create an attorney-client relationship.

We would be pleased to communicate with you by email. However, please note that if you communicate with us-through this website, via email, or otherwise-in connection with a matter for which we do not already represent you, your communication may not be treated as privileged or confidential and may be disclosed to other persons.


 

[1] There are too many important considerations in selecting a realtor to mention in this post; however, the three most important (to this author) are: motivation, personality, and experience.

Blog Series: Buying or Selling a Home

Spring is in the air (well, sort of).  Traditionally, the coming of spring brings to Wisconsin a number of things: the ability to occasionally go outside without looking like the kid from A Christmas Story, renewed hope (err…optimism for the future) in our Milwaukee Brewers, and the start of the real estate season.  Spring and summer months are traditionally the busiest times of year for residential home transactions – and the times when our firm is contacted most frequently by prospective buyers, sellers, or their agents.

Whether you are a first time homebuyer, or a seasoned veteran, the process of buying and selling a home – replete with deadlines, stacks of paperwork, and legal and technical jargon – may be intimidating.  Fear not!  We are here to help.  Over the next few weeks, this Blog will discuss the home buying or selling process, including the following concepts:

  • Listing Agreements,
  • Why and When to Hire an Attorney,
  • The Offer to Purchase,
  • Contingencies,
  • Legal Title and Title Insurance, and
  • The Closing.

Along the way, we hope to not only inform you, our readers, of the basics, but also to discuss some common misconceptions and pitfalls, answer your questions, and show you ways that we can help.

We hope you will join us for this discussion.  If along the way you decide you would like to meet with one of our real estate attorneys, please contact us at (608) 837-7386.

Disclaimer:  Please note that reading and/or commenting on this blog post does not create an attorney-client relationship with Eustice, Laffey, Sebranek & Auby, S.C. absent an express agreement between the firm and the client.  Contacting Eustice, Laffey, Sebranek & Auby, S.C. or any of its attorneys or employees via this website or via email does not create an attorney-client relationship.