10% Off Sale! Studio in Adams Morgan for $116,900!

2012-02-04T06:46:00.000-08:00

Open Sunday 2/5 from 1-3pm!

In honor of Super Bowl Sunday we are pleased to announce our Super Sunday 10% Savings Sale on our beautiful updated studio in Adams Morgan. Usually this home is priced at $129,900, but for this weekend only the seller has lowered the price to just $116,910!

The home boasts a stunning marble bath, updated granite kitchen, hardwood floors, 9' ceilings and bright southern exposure. The building has extra storage and bicycle storage. Plus, you can walk to Adams Morgan, groceries, restaurants and Rock Creek Park.

Don't miss this opportunity to snap up a bargain! Here's a link to all the information about the home: http://www.bestaddress.com/property.php?id=113

Please contact Tony Borgia for a private showing:
202-365-8423 - Mobile
Tony@BestAddress.com - Email
@TonyBorgiaDC - Twitter
800-309-1980 - Office

Washington Post Misrepresents New Real Estate Contract

2011-12-19T14:55:00.000-08:00

Monday, December 19, 2011

I’m very pleased that the Washington Post has taken aninterest in the small details of the real estate market that can affect thesale of a home. I read Mr. Jacobs opinion piece with interest, but had someconcerns with the accuracy, completeness and slant taken in his writings. Hereis a portion of the concerns that I have with his article, taken paragraph byparagraph:

Paragraph 1:
“The Greater Capital Area Association of Realtors (GCAAR) has just issuedrevised residential real estate sales contract forms [Regional Sales Contractor “RSC”] that make sweeping changes to the way business has been conducted inthe region.”

1. There are no “sweeping changes to the waybusiness has been conducted” in our region. There are no state law changes,there are no changes to the way settlements take place, the way inspections arehandled, the multiple listing service, advertising, fiduciary relationshipsbetween agents and their clients, interest rates, disclosure requirements orany other fundamental aspects to the sale of real estate. Mr. Jacobs isreferring to changes in less than 50 paragraphs in a library of forms that arein excess of 100 pages long.

2. GCAAR does not have the ability to revise theRSC unilaterally, it is part of a group of associations that created andupdates the RSC as needed. GCAAR’s forms will only affect the manner in whichreal estate is conducted in Montgomery County Maryland and the District ofColumbia. While that is a portion of the business in the Washington real estatemarket it is hardly “the region.” The RSC will also be used by the NorthernVirginia Association of Realtors (NVAR). NVAR covers Arlington, Alexandria,Falls Church and Fairfax Counties. Combined with GCAAR these two associationsdo comprise a large portion of the Washington market, but does not includePrince Georges, Loudon, Howard, Prince William or Charles counties.

3. The RSC is created for Realtors use only. Whilemost people believe that Realtor and “real estate sales person” areinterchangeable, they are not. In order to be a Realtor you must be a member ofthe National Association of Realtors and only approximately 1/3 of thelicensees in the United States are Realtors. Thus, only 1/3 of licensees areeligible to use the RSC.

Paragraph 2:
“These forms, which become effective Jan. 1, affect real estate transactions inMaryland, the District and to a lesser extent, Northern Virginia. Everyoneplanning to be involved in the local real estate scene in the new year shouldread and understand these new forms thoroughly before proceeding.”

1. The changes do not affect real estatetransactions in the entire state of Maryland. In fact, these changes can onlyaffect changes in 1 out of 24 counties in the state. Further, the buyers in thesingle county have the option to use the “MAR Contract” instead of the Regionalso there is not necessarily any change for buyers from this contract in theMaryland. In direct contradiction to what is stated in the article, the form ismore widely used in Virginia than it will be in Maryland. In fact, the formwill be used in Arlington, Alexandria, Falls Church and Fairfax.

2. The local associations of Realtors have been offeringextensive classes on these forms as have the local settlement attorneys. Thebrokerages that do work in these jurisdictions have also had extensive trainingon these forms. So this concern has already been addressed.

Paragraph 3:
“For many years, these standardized forms were basically designed to protectreal estate agents and keep them out of trouble. Despite their historically self-servingnature, these forms tended to be quite fair and balanced to buyers and sellersalike. The current changes, however, seem to have tilted the playing field moretoward the seller.”

1. The purpose and design of these forms is tofacilitate real estate transactions. They are not designed to “protect realestate agents and keep them out of trouble.” That is unless, you believe thatobeying the law is only done to “protect agents and keep them out of trouble.” Maryland,Virginia and District of Columbia law require licensed real estate agents use forms created by attorneys which is precisely whythese forms were created. So, indeed, these forms are self-serving in that theyallow Realtors to comply with the law.

2. Ironically, the forms were modified in order tohelp buyers have a more balanced transaction. The previous versions of theforms provided that the seller would warrant all electrical, heating/cooling,plumbing, appliance and smoke detector systems in a home. Because only thosesystems were warranted sellers felt that they were not obligated to fix anyissues that were not in this group. This led to situations where a buyer wouldask for a light to be fixed in an oven and the seller was obligated to fix it, butthe crack in the foundation of a house was not being addressed. In order to doaway with any preconceptions about what should or should not be fixed the formswere changed to allow the buyer and seller to negotiate ALL aspects of the homeinspection without making one item more important than another. The new formallows all inspections and repairs to be made, just the same as they were inthe previous version of the form.

3. The Realtor associations represent both buyersand sellers and attempt to create contracts that are balanced because agents can represent either side of a transaction. There is noincentive for the associations to create unbalanced forms because they wouldonly be hurting themselves.

Paragraph 4:
“Starting in January, all properties being sold using the new forms are beingsold as is. What this means is that unless buyers insert inspection contingencyclauses or seller’s property condition representations into their contracts,the buyers will have no protection if the home is later discovered to haveunacceptable or even defective, unsafe or unsanitary structural damage orcomponents.”

1. The current contract does not provide protectionfor a home purchaser for all defective, unsafe, unsanitary conditions orstructural damage. That does not changewith the new contract. It does not matter what contract is used to purchasereal estate, if there is no home inspection there will be no way to determinewhat the condition of the home is. This holds true with the current contract,the proposed contract or a contract written by an attorney.

Paragraph 5:
“Sellers will not be liable for conveying defective or even non-workingplumbing, heating, ventilation, air conditioning and other systems. Theseller’s sole responsibility is to deliver the property “free and clear oftrash and debris, broom clean and in substantially the same physical conditionas determined” on contract date, date of home inspection or other agreed-upondate. Gone are the days when buyers could rely on the seller’s express writtenwarranty that all systems are in good working order and repair. The seller isnot required to make even lender-required repairs in the event that the buyer’slender requires that repairs be made as a condition of the loan.”

1. The buyers never could rely on the seller’sexpress written warranty that all systems are in good working order and repair.The current contract did not provide that and the new one does not either.There were some systems that were warranted to be “normal working order” in theprevious contract but that loose definition was the source of great ambiguityand dispute and served neither buyers nor sellers interests.

2. Stating “The Seller is not required to make evenlender-required repairs” is false and misleading. The seller is, in fact, stillrequired to make lender-required repairs if there is a financing contingency.The change is that the reference to that requirement has been moved to adifferent page.

Paragraph 6:
“There is, however, some good news for home buyers in that agents also haverevised their six-page addendum of clauses to include two mutually exclusiveforms of home inspection clauses. The first paragraph, called Home InspectionContingency, provides the buyer with a right to conduct a home inspection andpresent the seller with a list of items that the buyer wants the seller toreplace or repair.”

1. Mr. Jacobs says: “agents also have revised,”which is absolutely inaccurate. The agents do not write or revise the contract.Attorneys revise the language on the contract.

2. The two inspection contingencies have alwaysbeen in the six-page addendum of clauses. This is not a change.

3. This particular addendum of clauses is only usedin Montgomery County, Maryland and the District of Columbia. The addenda usedfor all other jurisdictions are different. So, changes here only affect a smallportion of the transactions in the region, which again belies the argument thatthere are sweeping changes to the region.

Paragraph 7:
“The buyer can also request dollar credit in lieu of repair or replacement ofthe unsatisfactory inspection item. After receiving a copy of the homeinspection report and the buyer’s list of requested repairs, replacements ordollar credits, the seller can opt to make repairs, replacements or providecredits. The seller can decline to make any repairs or concessions, but mustnotify the buyer of such a decision within three days of receiving the buyer’sinspection report and notice. Failure to provide the three-day notice may deemthe seller to have agreed to the buyer’s requests.”

1. This is a fairly accurate representation of onlyone part of the paragraph Mr. Jacobs is explaining. However, it fails to pointout that if the buyer fails to ask for any repairs the contingencyautomatically expires. And that if the seller does respond to the buyersrequests within the three-day period and then the buyer fails to respond thebuyer is deemed to have accepted what the seller has agreed to do. Thus, bothparties must be responsive, neither side can be complacent.

Paragraphs 8-9:
“The other inspection contingency in the second paragraph of the addendum ofclauses is called General Inspection Contingency (No Right to Negotiate). Asthe name implies, this inspection does not give the buyer any right to ask theseller to make any repairs or concessions. The inspections provided for by thisclause are for informational purposes only. If the inspection is unsatisfactoryto the buyer in his sole and absolute discretion, his only right at that pointis to notify the seller that the contract is void and to receive his depositback.

Under either inspection clause, itis critical that the buyer send his notice to the seller before the stipulatedinspection deadline. Failure to meet this deadline will result in thecontingency terminating and the contract remaining in full force.”

1. On these two paragraphs Mr. Jacobs is accuratelydescribing the addendum. But it should be noted that the buyer has a choice ofcontingencies to use. Their agent will help the buyer decide whether the “NoRight to Negotiate” is the right choice or not.

Paragraph 9:
“Other notable changes to the real estate sales contract include the financingand appraisal contingencies being removed from the body of the contract intotheir own separate addenda. Thus, if a buyer wants the benefits of thesecontingencies, he must make sure that he asks for them. There is no longer alist of possible addenda and contingencies as there was in prior versions ofthese contracts.”

1. The buyer had to ask for the contingencies toget their benefits on the old contract and will have to on the new contract aswell.

2. There are check boxes for the appropriate financingoptions in the body of the contract. They are, in fact, on the very first pageof the contract to bring more attention to them for the buyer’s benefit.

Paragraph 10:
“That mini-checklist was useful in informing buyers and sellers that variouscontingencies were available. Now the burden is on the party preparing thecontract to advise everyone that additional pre-printed clauses may beavailable to protect their interests or that clauses can be drafted fromscratch to customize the deal to meet their needs.”

1. I agree with Mr. Jacobs that the mini-checklistwas useful in the old version of the Regional Sales Contract. However, it also causedconfusion. Since only some of the contingencies would be appropriate in aparticular transaction buyers would ask for things such as a “Lead-Based PaintTest” for a home constructed only a year ago, when there was no lead-paintlegally allowed to be used in the United States after 1978. This, in fact,would have been a detriment to the buyer, not a benefit.

Paragraphs 11 and 12:
“The revised sales contract incorporates specific jurisdictional addenda forD.C., Maryland or Virginia. These jurisdictional addenda, which conform to thenew 2012 regional sales contract, address how local items are to be handled,such as grantor’s, transfer, recordation taxes and fees. It is imperative forhome buyers and sellers opting for the new forms to use only the most recenteditions for their specific jurisdiction. Parties should use the jurisdictionaladdenda for location of the property, regardless of where they reside.

Finally, these new forms are not mandatory and, in fact, aredrafted, copyrighted and designed for GCAAR member use only. While it isperfectly legal and often desirable to amend these forms using separateaddendum, all jurisdictions have laws prohibiting the unauthorized practice oflaw and thus non-lawyers must be cautious when drafting legal contracts forothers.”

1. Mr. Jacobs is quite right that the appropriateand current forms should be used when creating a contract. He is also correctthat caution should be used when drafting legal documents. However, I takeissue with Mr. Jacob’s assertion that onlynon-lawyers should be cautious. I would hope that Mr. Jacobs implication thatlawyers need not take caution when drafting legal documents was simply anincautious statement.

2. He is correct that the forms are copyrighted, asis his article in the Washington Post and any other non-governmentallygenerated legal document. However, the RSC copyright is not held by GCAAR alone,nor is the RSC copyrighted materials for GCAAR members only, it is availablefor use by other Realtor association’s members as well.

3. He is correct that these forms are not mandatory.The law does not require buyers and sellers to hire an attorney (or an agent)to handle the negotiations or even the writing of a contract to buy or sellreal estate. However, it would be inadvisable for an individual to act withoutthe advice of a licensed agent (or attorney) to help with the process.

Paragraph 13:
“If you are contemplating a real estate transaction in the coming year, you arebest served by having it drafted or at least reviewed by a competent local realestate attorney who is up to date on the latest contract language.”

1. Mr. Jacobs is exactly correct that it isimportant to have the contract you use drafted by a competent local real estateattorney. Fortunately, the RSC is just such a document having been created by agroup of attorneys in Maryland, Washington, DC and Virginia.

2. The associations also felt strongly that theirclients would be best served by specifically informing them that they can havetheir offer and contracts reviewed by an attorney. In fact, the RSC has a boldfaced reference in the contract that says: “If legal advice is desired byeither party, such party is advised to seek legal counsel”

3. I believe that Mr. Jacobs is also correct thatif an attorney were to be hired to review the contract that he or she be competentand up to date on the latest contract language. I would recommend an attorneywho has no misperceptions of the RSC and a complete and accurate understandingof the differences between the current contract and the new contract that willbe released in January.

Botched Home Inspection Responses

2011-12-01T14:45:00.001-08:00

DON'T BOTCH THE HOME INSPECTION RESPONSE

NOTICE AND DELIVERY PROVISIONS VARY IN MD, DC, and VA

We recently had an issue involving a property located in Montgomery County. The parties were in the process of negotiating the Home Inspection Contingency. The agent representing the buyer sent a repair list in writing (as an attachment signed by the buyer) via email to the agent representing the seller. The listing agent responded by forwarding to the buyer's agent an email communication between himself and his seller client agreeing to provide a credit toward repairs for the buyer.

Was this response proper under the Contract?

In order to answer this question we need to read the appropriate addenda in the contract. They are very different in MD, DC and VA. In all three jurisdictions, Notice must be in writing. In MD and DC, Delivery of Notice can be sent to either the Seller/Buyer or the agent representing them. In VA, Delivery of Notice is to the Seller/Buyer at their property address, fax or email, with "Courtesy" (not required) copy being sent to the agents. In MD, DC and VA, Notice may be delivered via email but in MD and DC there is also an additional requirement the email must include an "attachment with an actual copy of the executed instruments being transmitted."

In our case this difference is very important. By only providing the email communication without the repair list as an attachment, the listing agent did not deliver proper notice. Pursuant to the Home Inspection Contingency in the Addendum of Clauses, "Failure of either party to respond within 3 days after Delivery of Notice from the other party will result in acceptance by both parties of the terms of the most recent Notice." By not responding properly pursuant to the jurisdictional addendum, the listing agent put his client in a bad position; a position which could result in the Seller's obligation to complete all of the repairs on the Buyer's list. Ouch!

Your partners at KVS are always available to answer your contract questions, so don't hesitate to ask us if you are in doubt. Whether current or new forms we are here to put you and your clients in a good position and keep you out of a bad one.

This article was created by Kantoroom, Vitale + Stanton, LLC and was republished with their permission. http://www.kvslawgroup.com/

1922 12th Street, NW #2 - Video Tour from Best Address Real Estate, LLC.mov

2011-11-17T17:58:00.000-08:00

Welcome to the Best Address Blog

2011-10-19T10:50:00.001-07:00

Soon, we'll be posting several times a week with information for both the public and for brokers about real estate information.