Tenants in common or Joint Tenants?
If I sell 50% of my interest in a piece of property to you then it is likely we are tenants in common, because joint tenants must take title in the same deed at the same time, and we didn't do that. Ownership in severalty is title held by one person, and community property is title shared by a married couple. Tenants by the entirety does not apply in Washington.
What's an offer to purchase real property?
An offer to purchase real property must contain at least the signature of the offeror, the closing date and the price for the property.
Escrow
Lenders may wait until the buyer's deed of trust or mortgage has been recorded before depositing funds.
Escrow instructions
Escrow agents rely on a separate contract called escrow instructions. Escrow instructions may sometimes be incorporated into a purchase agreement, but not a listing agreement.
How earnest money funds will be disbursed, may also be set forth in a rescission agreement.
Appraisal Report
A borrow must receive a copy of an appraisal report within three days before closing.
Quit Claim Deed
Document that clears small mistakes in the chain of title like a simple misspelling.
Abstract of Judgment
A person who wins a lawsuit will file an abstract of judgment in the county where the losing party owns property. An abstract of judgment creates a judgment lien against a property owned by a person who loses a lawsuit.
Bump Clause
A bump clause lets a seller keep a property on the market while awaiting fulfillment of a condition such as a sale of the buyer's property contingency. A bump clause also requires the buyers to waive the sale of home contingency or terminate the contract.
Rental Agreement
If the buyer wants to move into the home before the closing the parties should execute a rental agreement.
Rescission Agreement
Allows both parties to walk away from the transaction.
Dis-favorable Disclosure Statement
A buyer can rescind within three days of receiving the disclosure statement without a detailed explanation and for whatever reason he wants.
Liquidated damages
Cannot exceed 5% of the purchase price in Washington.
Quiet Title Action
A seller likely will file a quiet title action if a cloud is found on the title during closing.
Maintenance agreement for a property easement
Typically terminates when the property changes hands. The new parties will need to negotiate a new agreement.
Buyer default
If the buyer defaults then the earnest money will typically be forfeited to the seller as liquidated damages (up to 5% of purchase price). If the buyer defaults and the buyer refuses to sign and authorization to distribute the earnest money funds then the brokerage will likely send the funds to an escrow agent.
Latent defects that are material facts
Must be disclosed.
Stigmatized property rule
Stigmatized property is property that buyers or tenants may shun for reasons that are unrelated to its physical condition or features.
Caveat Emptor
The general rule in property buying and selling is caveat emptor – let the buyer beware. Also, a seller cannot be held responsible for failing to do something. Based on these traditional legal rules, sellers do not have to tell buyers whether the property is stigmatized.
The main exception to this rule, however, is where the seller makes a “misrepresentation,” or lies, about an aspect of the house. A seller has a duty to reply truthfully about important facts, and in a manner not aimed toward misleading the buyer. Even silence or evasive answers can constitute a misrepresentation if an average buyer would have been misled.
Meth Labs
If a seller's agent knows a residential property was the site of an illiberal crystal meth lab, they should disclose that information because it affects the condition of the property. Thus, the meth lab stigmatized property rule applies only when the negative incident doesn't affect the physical condition of the property.
Property Management Agreement
Agreement between property manager and Owner with the property description. Generally, includes compensation as percentage of the rents collected. The manager's authority to collect rents and security deposits must be explicitly mentioned in the management agreement. It must also include the amount of the manager's compensation and the frequency of of management reports.
Security Deposits
Must be kept in trust accounts held separate from business operating accounts.
Offers well over listing price
May fall through if the appraisal comes back lower than the offer because the buyer's financing may have been based on the offered price. You should also consider the contingencies with attached to an offer well above listing price. A quick acceptance may scare off a buyer thinking that they put to much money on the table.
Standard Real Estate Forms
Often give buys lots of ways to back out of the agreement.