If you are thinking about buying a home in the Tacoma area that is listed as for sale by owner (FSBO), there are some important legal issues of which you should be aware. There is no inherent reason not to consider an FSBO property. However, before you sign a contract and make an earnest money deposit, you need to make sure you know what to expect, what challenges you may encounter, and how you can protect yourself as the process moves forward.
1. The Seller Is Not Relying on Professional Advice
In a traditional real estate sale in which the seller is represented by a real estate agent, you can rely – to an extent – on the fact that the seller is receiving professional advice. Of course, the seller’s agent has the seller’s interests in mind; but, he or she has certain professional and ethical obligations, and he or she should be well-versed in what is necessary to successfully sell a piece of property in Tacoma.
When a property is for sale by the owner, this is not the case. As a result, this makes it all the more important for you to rely on your own professional advocates and advisors. You will want to work with an experienced buyer’s agent – perhaps one who has specific experience handling FSBO sales – and you will need to work with an attorney to make sure your interests are fully protected.
2. Avoiding Unethical Behavior, Scams, and Protecting Your Earnest Money Deposit
If you research the legal issues associated with FSBO sales online, you will find no shortage of horror stories of prospective buyers making earnest money deposits, only to never hear from the “seller” again. While these types of circumstances are relatively rare, they do happen, and this is a risk against which prospective buyers can – and should – protect themselves.
When dealing with FSBO sellers, it is also important to be aware of the risk that they might not necessarily play by the rules. Whereas a seller who is represented by a real estate agent is far more likely to comply with your contract’s terms and contingencies, an unrepresented seller may simply not have an appreciation of what the terms of your contract mean. While you may technically be able to sue, whether you have the time, money, and patience to deal with suing a seller (who may also choose to represent himself or herself in court) is another matter entirely.
3. Ensuring That Your Contract Contains All Necessary Terms, Conditions, and Contingencies
If you decide to make an offer, your real estate agent should submit a standard Washington purchase and sales agreement with your requested terms, conditions, and contingencies. Again, whereas a represented seller would generally work through the contract with his or her real estate agent to negotiate the deal, working with an unrepresented seller can present various different types of challenges. The seller may not be willing to negotiate in good faith (and may not realize that his or her demands are unreasonable), and you will need to be very careful to make sure that you do not agree to a contract that does not provide you with all of the necessary protections.
4. Ensuring That the Buyer Makes Complete and Accurate Disclosures
When selling a home in Tacoma, Washington law requires the seller to provide a written disclosure statement that contains information about any known issues with the property. The only exception to this requirement is if the buyer affirmatively waives his or her right to receive the disclosure (which is generally inadvisable). Under Section 64-06-020 of the Revised Code of Washington (RCW), the seller’s disclosure statement must contain specific language, and it must cover a laundry list of issues that have the potential to negatively impact the value or desirability of the property.
Here, too, the risk to the buyer comes from the seller not having a full appreciation of his or her legal obligations or the ramifications of failing to make a complete and accurate disclosure. If you buy the property and then subsequently discover that the seller failed to disclose a defect, you may have grounds to file a lawsuit, but your chances of recovering damages will depend on whether and to what extent the seller has the financial wherewithal to pay.
How can you avoid this risk? Conducting a title search and purchasing title insurance can help guard against risks related to the seller’s ownership of the property. And working with your real estate agent, an experienced inspector, and a knowledgeable attorney can help you uncover any issues while ensuring that the seller is being as up-front as possible. If you are not able to build sufficient confidence that the property is in good condition, then you may need to make the decision to exercise a contingency and move on.
5. Getting to the Closing Table
Finally, when it comes to getting to the closing table with your contract intact, there is a lot of work that needs to be done. If your seller is not represented, then it will be entirely up to you and your representatives to make sure the closing takes place as scheduled. This is not necessarily a bad thing – to an extent, having more control over the process is better – but it does mean that the seller will be less engaged in, and perhaps less committed to, the process. It also means that the seller will be more likely to make missteps that could delay the process and, perhaps, jeopardize your closing.
Ultimately, as a buyer, you need to make informed decisions based on complete and reliable information, and you need to make sure you are confident moving forward to closing. If you have questions and would like to speak with a skilled local attorney, we encourage you to contact us for a confidential consultation.
Speak with a Highly-Skilled Lawyer about Buying a Property For Sale By Owner
To speak with a lawyer at Bolan Law Group., about buying a property for sale by owner in Tacoma, please call us directly or contact us online. We will arrange for you to speak with an attorney in confidence as soon as possible.