Question about FSBO transaction

[justalayman]

I agree. I make contracts all the time. I went into Trader Joe's this morning and bought a Tejava. I offered them a certain amount of money and they accepted it. It was a contract between the both of us. Sure, it was not in writing; but, it was a contract. I don't see any unauthorized practice of law here and don't find the referenced cases on point.

but did you offer Joe counsel on the legalities of entering into the contract and any sort of explanation as to their actions regarding the contract entered into?

 

[Ohiogal]

That's because you can't provide legal services to OTHERS. As an agent, you are right you need to be careful about stepping in the UPL.

THAT'S NOT what we are talking about here. Ohiogal mischaracturizes the transaction. This is not "preparing a contract for someone else." This is one of the parties bringing a contract to the table. It's called MAKING AN OFFER in real estate. He's one of the parties in the transaction, he's allowed to pro se write his own contract. All of OhioGal's alleged PREDEDENT involve those providing legal services to OTHERS. Not to someone providing legal service TO HIMSELF. A purchase contract is mutual between the seller and buyer.

In many states -- and I wasn't going through all of the 1000 cases in Kansas involving it -- you can't prepare a contract to purchase a property -- Ohio is one such state. I wanted to caution this individual about that because it could be considered UPL due to the fact that he is a preparing a contract for the OWNER to SELL the property to him and under WHAT TERMS that will happen. He needs to be cautious. And no, I haven't mischaracterized the transaction.

 

[Ohiogal]

but did you offer Joe counsel on the legalities of entering into the contract and any sort of explanation as to their actions regarding the contract entered into?

Which OP seems to have done by advising the seller on his duties under the contract:

Then this last Friday, I called him to say the appraisal came back good and our financing was 100% approved, so the deal is sealed - now we just wait for closing day. On that call he said that he'd talked to his son, and was asked if there were any closing costs he had to pay, to which he apparently said he didn't know. I said yes, I believe they will deduct those from the proceeds of the sale before funds are disbursed. His tone indicated that he was possibly confused by that idea. We moved on and he said he'd call me this week to let me know when he could move in to his apartment, and we'd schedule closing for right around that day.

I'm starting to get concerned about this closing cost thing. As the buyer, I obviously put my best interests first, but not at the expense of being straight forward, honest, respectful, accommodating, and transparent with the seller. My concern is that one of two things will happen - either the seller will freak out at closing when he is once again reminded of his share of closing costs, or, with his son possibly getting involved, if he is not satisfied that his dad is getting a good deal, he can argue coercion or something and get his dad out of the contract, since there were no witnesses to negotiation or contract signing. His son is a senior law enforcement officer, so he may have some persuasion with local judges, if it comes to that.

He has concerns. He should. If the seller (or even the seller's son on behalf of the seller) hires an attorney, he could have a very big problem. I pointed out one such issue.

 

[Ohiogal]

but did you offer Joe counsel on the legalities of entering into the contract and any sort of explanation as to their actions regarding the contract entered into?

He said he discussed the seller's liabilities under the contract with regard to closing costs.

 

[ksguy]

He said he discussed the seller's liabilities under the contract with regard to closing costs.

Wouldn't this be more akin to telling Joe that I'd only purchase his goods if he gave me a discount, stepping away from the counter to take a cell phone call, and upon my return to discussing the transaction, reminding him that I was only buying if he gave me the discount?

 

[tranquility]

He said he discussed the seller's liabilities under the contract with regard to closing costs.

After I paid for my Tejava, I told the cashier she had to give me the bottle now so I could leave. Good thing our contract was already "signed".

 

[tranquility]

Wouldn't this be more akin to telling Joe that I'd only purchase his goods if he gave me a discount, stepping away from the counter to take a cell phone call, and upon my return to discussing the transaction, reminding him that I was only buying if he gave me the discount?

The real question seems as though it will be if the other party had the capacity to make a contract. Did he understand the words in the contract? (Cognitive test) Was the other party able to act in a reasonable manner and you had knowledge of the deficiency? (Affective test)

Unless he makes some claim he believed you were reasonably representing his interests, I don't see the UPL here.

 

[tranquility]

but did you offer Joe counsel on the legalities of entering into the contract and any sort of explanation as to their actions regarding the contract entered into?

Say I did. Say I mentioned that if I gave him $.10 extra he would have to provide me with a paper bag. Would that be UPL?

 

[justalayman]

After I paid for my Tejava, I told the cashier she had to give me the bottle now so I could leave. Good thing our contract was already "signed".

But did you phrase that such that it was an interpretation of the contract in such a manner that you were providng counsel or did you simply telll them if you give me the bottle I will leave.

unrelated demand does not make it an addendum

 

[justalayman]

Say I did. Say I mentioned that if I gave him $.10 extra he would have to provide me with a paper bag. Would that be UPL?

No that is an offer to purchase a paper bag and actually has nothing to do with the original contract

 

[tranquility]

No that is an offer to purchase a paper bag and actually has nothing to do with the original contract

Actually, by law, he has to offer the bag. We can't have single use plastic bags so the store must provide paper (Or, "recyclable") for a fee of $.10 to be in compliance with the local ordinance.

 

[tranquility]

But did you phrase that such that it was an interpretation of the contract in such a manner that you were providng counsel or did you simply telll them if you give me the bottle I will leave.

unrelated demand does not make it an addendum

I recognize the article ( http://c.ymcdn.com/sites/www.jocobar.org/resource/resmgr/imported/52685-jocobar_march_april_news.pdf ) does not mention UPL here, the fact is is from a Bar journal would seem to indicate that if there was a legal problem with it, they might have mentioned it. Go to page 12 (The title of the article is "A Lawyer and Real Estate Agent Walk into the Bar...Current Topics in Real Estate") and read the subheading "More About Real Estate Practice in the Kansas City Area", to see the heartwarming story of a home buyer's father (who is an attorney) having form contract clauses explained to him by the real estate agent. After checking out the explanations with his real estate attorney friend, everything was found to be OK. That was for a third party who was doing the explaining.

 

[ksguy]

I forgot to address this point:

If you did not specify what are considered closing costs, it could be an issue. If you did specify what was considered closing costs, then stick with showing him the contract should he question the agreement.

The language for closing costs was pre-filled in to the contract. I did not elaborate on the language - "Additional SELLER paid costs. In addition to any other costs SELLER agreed to pay herein, SELLER agrees to pay other allowable closing costs permitted by Lender(s) and/or prepaid items for BUYER, not to exceed:"

Sounds like addressing/elaborating on this is as simple as doing what the first reply mentioned - getting a prelim HUD-1 and handing that over so he fully understands what is included, then keeping my mouth shut. I'm getting the distinct impression that any "What does this mean..." type questions from the seller should definitely be fielded by anybody but me.

 

[justalayman]

Actually, by law, he has to offer the bag. We can't have single use plastic bags so the store must provide paper (Or, "recyclable") for a fee of $.10 to be in compliance with the local ordinance.

Oh, facts not presented in the initial argument. Sneaky sneaky sneaky.






but you recognize the article? Are you suggesting the OP's story is contrived, an altered rendition of that article? Are you a ghost writer by chance?

but it doesn't menion UPL?

from the specific portion of that publication you speak of concerning the real estate deal.

In Kansas, the administrative regulations are broader and while
there is no specific counterpart to the Missouri regulation, real
estate agents do not draft contract forms from scratch, as such
conduct would clearly constitute the unauthorized practice of
law (See Kansas Bar Association Unauthorized Practice of Law
Committee Definition Report, Sections A. and B(7), Amended
and Adopted May 11, 2004)

 

[justalayman]

I forgot to address this point:



The language for closing costs was pre-filled in to the contract. I did not elaborate on the language - "Additional SELLER paid costs. In addition to any other costs SELLER agreed to pay herein, SELLER agrees to pay other allowable closing costs permitted by Lender(s) and/or prepaid items for BUYER, not to exceed:"

Sounds like addressing/elaborating on this is as simple as doing what the first reply mentioned - getting a prelim HUD-1 and handing that over so he fully understands what is included, then keeping my mouth shut. I'm getting the distinct impression that any "What does this mean..." type questions from the seller should definitely be fielded by anybody but me.

ambiguous


does that mean the seller is liable for the cost of survey? Buyers title insurance? points on your loan? Initial escrow payment for taxes and insurance?

One thing I had a hard time telling both buyers and sellers when they asked who pays what. The answer is simple; whomever agrees to pay it.

very few costs are required to be paid by either party. There are a few regarding federally subsidized loans but outside of that, just about everything is negotiable.

the problem; you do not get to go back now and specific diddly squat. Your contract is your contract and especially since you wrote it, ambiguities are held against the writer.

a HUD 1 is based on your contract. If the contract is not clear, the HUD 1 is not going to be able to be completed.