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Listing A Property For Sale

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Not an agent, well, this at least helps you see what is required from a legal perspective.

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Listing A Property For Sale

  1. 1. LISTING A PROPERTY For agents and their admin’s, as well as the do it yourselfer’s Darryll Whaley
  2. 2. Overview <ul><li>The enclosed explanation is used to describe a a listing transaction. </li></ul><ul><li>This four step process is designed to give you a system to follow as documents come in for various client files. </li></ul><ul><li>The entire escrow process as it relates to those who will be handling the documents for a real estate transaction, is laid out herein and should be seen as a most nearly complete guide to handling a listing escrow. </li></ul>
  3. 3. Listing Procedure #1 <ul><li>The following Documents are deemed necessary in order to legally have a listing agreement with a client who wants to sell their house: These forms are also located on the following page. </li></ul><ul><li>1. Residential Listing Agreement </li></ul><ul><li>Explains relevant items to the agreement such as the property address, the length of agreement between the Broker and client for listing the property, purchase price, commission. </li></ul><ul><li>2 . Disclosure regarding Agency Relationships </li></ul><ul><li>Agency must be secured between the sellers and the listing agent so that the relationship has been made legal. Allows other realtors to see that there is a relationship there and allows for other realtors to have a point of contact for information. </li></ul><ul><li>3 . Sellers Advisory </li></ul><ul><li>When a seller lists their house, they must be aware of the many possible problems that can arise in the process of selling as house, such as electrical problems that went undetected, nuisance repair items, plumbing leaks and many other things. It is the agents responsibility to let the seller know that they should prepare the home in the best manner possible in order to secure the best buyer, and that means having the home inspected by a pest expert or even a licensed house inspector. Knowing that credits towards the buyers can arise from improperly taken care of items, the sellers have the opportunity to eliminate some if not most of that prior to listing the house. </li></ul>
  4. 4. Listing Procedure #1 cont. <ul><li>Once these forms have been signed by the seller and the agent, the relationship and understanding has been officially formed. </li></ul><ul><li>Prior to turning these papers in to office administration, the agent will be filling out supporting documents found in the copier room that will allow the property to be placed on the MLS, signs placed in the front yard, and access given to consumers who search from the internet. These forms are filled out by the agent or escrow coordinator and turned in with a copy of the forms from above. Copies of the forms listed below do not need to be made. They are simply for office administration. </li></ul><ul><li>1. MLS Camera Sheet (Gives thorough explanation of property) </li></ul><ul><li>2. Sign Order Form </li></ul><ul><li>3. New Listing Checklist </li></ul><ul><li>4. New Listing sheet (Used if not to be placed on MLS) </li></ul>
  5. 5. Listing Procedure #1 cont. <ul><li>Once these forms above have been filled out, they are to be turned in with a copy of the forms signed by the sellers to administration staff. </li></ul><ul><li>Keep originals signed by sellers and agent and make a copy for each: </li></ul><ul><li>1. Copies to the sellers </li></ul><ul><li>2. Originals to the agents file </li></ul><ul><li>You can use a 6 CLASP ENVELOPE FOR LISTINGS. Using your own Transaction Worksheet, place it in the front clasp of the binder and fill in what you can, such as the list price, clients information, etc. You will be filling this in more completely once you get an accepted offer and need to make a copy for other parties. lets talk about that more below . </li></ul>
  6. 6. Listing Procedure #2 <ul><li>Now that you have the listing agreement and the property is active for other real estate agents viewing on the MLS, you are going to want to get a PEST INSPECTION performed. This is a mandatory item deemed necessary in making sure the property is fit for transfer and if in need of repairs, done prior to the close of escrow. </li></ul><ul><li>There is no Pest Inspection in this binder, but this is the point at which one is ordered up, after the listing agreement is secured, but prior to receiving an offer from a buyers agent. It is good to have one on hand when a buyers agent requests one. </li></ul><ul><li>Additionally, the following forms must now be filled out by the sellers so that when a qualified buyer does make an offer on the property, they can be delivered for their signatures. These forms can also be found on the following page. </li></ul>
  7. 7. Listing Procedure #2 cont. <ul><li>1. Real Estate Transfer Disclosure Statement </li></ul><ul><li>This disclosure asks various questions about items that come with the property as well as potential known items that relate to the property that might distract from the desirability of the property that the buyer might want to be aware of. The best rule of thumb is to ALWAYS disclose. </li></ul><ul><li>2. Supplement to the Real Estate Transfer Disclosure Statement </li></ul><ul><li>This Disclosure backs up the TDS and asks more in-depth questions that relate to the desirability of the property </li></ul><ul><li>3. Lead Based Paint Hazards Disclosure </li></ul><ul><li>This Disclosure asks the sellers if they are aware of any lead based paint on the premises </li></ul><ul><li>4. Smoke Detector Statement of Compliance </li></ul><ul><li>Properly functioning smoke detectors must be in all bedrooms and in the master hallway. The sellers must sign off on their functioning properly </li></ul>
  8. 8. Listing Procedure #2 cont. <ul><li>5. Water Heater Statement of Compliance </li></ul><ul><li>All Water Heaters must be double strapped for earthquake durability, must be 18 inches off the ground, and must be outfitted with a pressure relief valve in the event of overheating. The sellers must sign off on this being correct. </li></ul><ul><li>6. Natural Hazards Booklet </li></ul><ul><li>This booklet is standard and talks about natural hazards that occur in our area. Within the booklet, there is a questionnaire that asks the seller some questions as to their knowledge of any natural hazards that might have occurred in their area. Sellers are required to fill this out and answer honestly and sign that they have been handed the booklet. </li></ul><ul><li>7. Other Mandated Docs… RETDS, Supplemental Statutory, Statewide Buyer and Seller Questionnaire, </li></ul><ul><li>8. Is it a short sale? Make sure you collaborate with the bank on their mandatory documents </li></ul>
  9. 9. Listing Procedure #2 cont. <ul><li>If doing a condominium, please add the following form: </li></ul><ul><li>PUD - Planned Unit Development Disclosure </li></ul><ul><li>These forms now having the sellers signatures and the agents signatures where requested, should be paper clipped together, along with the pest inspection if it has come in, and held on to in the 6 CLASP BROWN ENVELOPE FOR LISTINGS binder for when they are needed. </li></ul><ul><li>The description above, is how every listing is handled from an agency standpoint. Up to this point, we are not in receipt of any other documents other than what we have had the seller sign, and the PEST INSPECTION we have requested. </li></ul>
  10. 10. Listing Procedure #3 <ul><li>When we receive an offer from another agent representing a buyer, we will most commonly receive the following documents: And if we don’t we must see to it that they occur prior to the close of escrow. These forms can also be found on the following page. </li></ul><ul><li>1. California Residential Purchase Agreement and Joint Escrow Instructions </li></ul><ul><li>8 page document outlining the terms in which the buying party wishes to purchase the said property. </li></ul><ul><li>2. Buyers Inspection Advisory </li></ul><ul><li>Just as the sellers were advised to inspect the property prior to closing escrow, the buyers have been instructed by their agent as well. </li></ul><ul><li>3. Disclosure Regarding Real Estate Agency Relationships - buyers agency with agent </li></ul><ul><li>The buyers agent must disclose to the listing agent that he has proper representation, so he will be sending over an agency disclosure which proves this. </li></ul>
  11. 11. Listing Procedure #3 cont. <ul><li>4. Disclosure Regarding Real Estate Agency Relationships - to Sellers from buyers agent </li></ul><ul><li>This form is needed when a buyers agent is making an offer for his clients. The buyers agent must prove he is not a party with the sellers and therefore has the sellers sign one of these disclosure with his name on it as well. (You will always see three of these agency disclosures in any transaction) </li></ul><ul><li>5. Pre-qualification Letter </li></ul><ul><li>A Letter from a Lender having pre-qualified their client for the funds needed to purchase the property. </li></ul><ul><li>6. Copy of a personal check to be deposited with the Title Company within three days after acceptance of offer. </li></ul><ul><li>These being received, having already being signed by the buyer and now being signed by the seller, makes not a binding agreement, but an agreement to move forward through an escrow process, normally a thirty day process, to which both parties perform duties in order to show their interest in the property. </li></ul>
  12. 12. Listing Procedure #3 cont. <ul><li>As an escrow coordinator, it is important at this point to realize a few things so you are not confused: </li></ul><ul><li>1. A Copy of these forms (1-4 above) or the originals if hand delivered to the office by the other party, must be sent back to the buyers agent after a copy has been made or the triplicates have been removed for copying. Also included must be the disclosures and the pest inspection that we paper clipped together. They will be reviewing these disclosures and report over the next few weeks during the inspection phase of the escrow. </li></ul><ul><li>2. A copy of everything must be placed in the 6 CLASP BROWN ENVELOPE FOR LISTINGS. </li></ul><ul><li>3. A copy must be given to office administration staff for their records. </li></ul><ul><li>4. A copy must be given to your sellers. Often, your sellers will let you collect these in a manila envelope that you can hold on to and give only when it becomes pertinent. </li></ul>
  13. 13. Listing Procedure #4 <ul><li>At this point in the transaction, the buyers agent is ordering up the HOME INSPECTION which is not our concern. It is just noted here for fyi purposes and is normally delivered via the mail so the listing party can review and sign off on receipt of it. It is provided on the following page for example only and is not a part of the example transaction used in this binder. </li></ul><ul><li>It is also now the sellers agents responsibility to order up a NATURAL HAZARDS REPORT. It is provided on the following page for example only and is not a part of the example transaction used in this binder. </li></ul><ul><li>This report allows the sellers to be as up front and honest in conveying all pertinent information about the property. It is developed by professional engineers for the purposes of providing information to all interested parties. </li></ul>
  14. 14. Listing Procedure #4 cont. <ul><li>Both of these items will be ordered up during or about the first week of the escrow. On the seventeenth day of the escrow, the first of two contingencies needs to be removed (Inspection Contingency) . All physical inspections will need to have been performed, including the pest inspection and the home inspection. All disclosures need to have been read, and the natural hazards report has to be reviewed by both parties and all must be signed off. </li></ul><ul><li>During the escrow process, a PRELIMINARY TITLE REPORT will be sent to the listing parties office for review. This report is furnished in part through public records from the City of Martinez as it relates to the property and the plot is lies on. Quite often, this is nothing more than boilerplate information, but is deemed necessary in the disclosing of all information </li></ul><ul><li>Once these items have been performed and the reports are in hand, , you should expect the following back in to your possession, with signatures by all parties on all forms, and initials on front covers of the reports: </li></ul>
  15. 15. Listing Procedure #4 cont. <ul><li>1. Real Estate Transfer Disclosure Statement </li></ul><ul><li>2. Supplement to the Real Estate Transfer Disclosure Statement </li></ul><ul><li>3. Lead Based Paint Hazards Disclosure </li></ul><ul><li>4. Smoke Detector Statement of Compliance </li></ul><ul><li>5. Water Heater Statement of Compliance </li></ul><ul><li>6. Natural Hazards Booklet </li></ul><ul><li>7. Pest Inspection Report with initials of receipt by buyers party </li></ul><ul><li>8. Home Inspection Report with initials of receipt of buyers party </li></ul><ul><li>9. Natural Hazards Report with signatures on several pages where requested by both parties </li></ul><ul><li>10. Preliminary Title Report with initials of receipt of buyers party </li></ul><ul><li>11. Other State Mandated Forms as they become available. Be sure to check! </li></ul>
  16. 16. Listing Procedure #4 cont. <ul><li>If doing a condominium or Property that has an HOA, please add the following form: </li></ul><ul><li>12. PUD - Planned Unit Development Disclosure </li></ul><ul><li>At this point in the escrow process, you need to stop and make copies of the forms above for the following parties: </li></ul><ul><li>1. Originals to go in 6 CLASP BROWN ENVELOPE FOR LISTINGS </li></ul><ul><li>2. A copy to the office administration team </li></ul><ul><li>3. A copy to the sellers </li></ul><ul><li>We might want to assume, but not always, that because the forms above were sent back to us, the buyers agent won’t need a copy, but this is a perfect scenario. there will be times where you will need to pursue getting one of these forms signed off on by having to track down the other agent. </li></ul>
  17. 17. Listing Procedure #4 cont. <ul><li>Now that we have all of the reports, disclosures, purchase agreement and supporting documents signed by both parties, copies handed in to office administration, copies back to the buyers agent, and a copy in a manila envelope for our sellers, we will need to make sure that the buyers are going to give final sign off on the purchase of the house we have listed. </li></ul><ul><li>The form on the following page is an addendum, and addendums can allow for information to be added to a purchase contract conveying additional terms, items to be included or excluded, or it can be a simple sentence stating that the buyers hereby remove all contingencies standing in their way of this purchase and are now 100% sure they want this piece of property. It will most commonly look like my example. </li></ul><ul><li>The first contingency, as spoke briefly to above, is the Physical Inspection Contingency which states that the buyers accept what might need correcting, or what has been reported on, as it relates to the inspections that were performed and the disclosures that were received. </li></ul>
  18. 18. Listing Procedure #4 cont. <ul><li>The second contingency is the Loan and Appraisal Contingency which states that the loan has been approved and the property has appraised at the price agreed to between both parties. </li></ul><ul><li>At the end of the escrow process, whether it is 30 days or more, the title company will have the buyers and sellers in to sign the closing documents and will send a copy of the closing report to the agents office. When this has been received, the file is considered closed and all documents that are in the 6 CLASP BROWN ENVELOPE FOR LISTINGS are to be placed into a larger white envelope provided by the agent and placed in the file cabinet for future reference. </li></ul><ul><li>Congratulations, now you should be more familiar with escrow coordination from a realtors perspective. </li></ul>

Not an agent, well, this at least helps you see what is required from a legal perspective.


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