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Question about FSBO transaction

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ksguy

Junior Member
What is the name of your state (only U.S. law)? Kansas

I'm in the middle of a FSBO purchase with an elderly gentleman (80 y/o). There is quite a generational gap between the seller and me, so I've tried to be respectful of doing things "old school" - in person for everything. No email, phone calls only to set appointments, etc. When we negotiated the deal, we sat down at his dining room table, hashed out a deal, shook hands, and signed a commitment to buy form (not a formal contract) listing the details to be put into the contract. A week later I stopped by with a contract detailing the transaction - price, inspections, financing contingency, etc. Total of 17 pages. I got the form from a site that provides real estate contracts for my state (Kansas City Associate of Realtors). We reviewed and initialed every page together, and I told him he could take a few days if he wanted to review it all with an attorney prior to signing. The last page even said if either party did not understand something, to review it with an attorney. We both signed that evening - but there are no witnesses other than an elderly lady (his girlfriend?) who was in the next room watching T.V.

Part of the deal was that he pay our closing costs up to $4500 - it is spelled out on the "financial terms" page of the contract. This is where my concerns come in. Several times since then, I have started to get the impression that he's a smidge forgetful. Two times he's said things to me that I know he'd already mentioned (things he was planning to have repaired, introduced me to his girlfriend again), and then when we were negotiating some expenses for foundation repair, he had forgotten about agreeing to pay closing costs. We ended up coming to an agreement for the repairs, and signed an addendum that we wrote out on how that would go down.

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.

Is there something I can or should do at this point? Should I try to contact the son and just talk about how the deal went down, and my concerns about his dad possibly being forgetful, or just let it ride and see what happens at closing, since it is a signed and sealed contract?
 


FlyingRon

Senior Member
Have, whoever is handling your closing (escrow house, lawyer, whatever is customary) prepare a preliminary HUD-1 which should clue dad and son in on what to expect coming up. It's pretty common practice around here.

If there are remaining repairs/inspections that need to be done, send copies to both the dad (and if you have the contact) the son.
 

ksguy

Junior Member
Have, whoever is handling your closing (escrow house, lawyer, whatever is customary) prepare a preliminary HUD-1 which should clue dad and son in on what to expect coming up. It's pretty common practice around here.

If there are remaining repairs/inspections that need to be done, send copies to both the dad (and if you have the contact) the son.
Thanks. There are no further inspections or repairs prior to closing. We opted to have the foundation work done after closing to minimize disturbance to the home while the seller is still living there and before we move in.

Should I have any concerns about the son's involvement as long as I've been transparent?
 

Ohiogal

Queen Bee
What is the name of your state (only U.S. law)? Kansas

I'm in the middle of a FSBO purchase with an elderly gentleman (80 y/o). There is quite a generational gap between the seller and me, so I've tried to be respectful of doing things "old school" - in person for everything. No email, phone calls only to set appointments, etc. When we negotiated the deal, we sat down at his dining room table, hashed out a deal, shook hands, and signed a commitment to buy form (not a formal contract) listing the details to be put into the contract. A week later I stopped by with a contract detailing the transaction - price, inspections, financing contingency, etc. Total of 17 pages. I got the form from a site that provides real estate contracts for my state (Kansas City Associate of Realtors). We reviewed and initialed every page together, and I told him he could take a few days if he wanted to review it all with an attorney prior to signing. The last page even said if either party did not understand something, to review it with an attorney. We both signed that evening - but there are no witnesses other than an elderly lady (his girlfriend?) who was in the next room watching T.V.

Part of the deal was that he pay our closing costs up to $4500 - it is spelled out on the "financial terms" page of the contract. This is where my concerns come in. Several times since then, I have started to get the impression that he's a smidge forgetful. Two times he's said things to me that I know he'd already mentioned (things he was planning to have repaired, introduced me to his girlfriend again), and then when we were negotiating some expenses for foundation repair, he had forgotten about agreeing to pay closing costs. We ended up coming to an agreement for the repairs, and signed an addendum that we wrote out on how that would go down.

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.

Is there something I can or should do at this point? Should I try to contact the son and just talk about how the deal went down, and my concerns about his dad possibly being forgetful, or just let it ride and see what happens at closing, since it is a signed and sealed contract?
You just engaged in the unauthorized practice of law by preparing a contract for him to sell HIS property to you. You needed to hire an attorney to prepare this information. You have issues. If he wants to freak out, he can report you for practicing law without a license. Then how will you handle that?
 

Ohiogal

Queen Bee
Oh and to back up what I am saying:

In re Weaver, 281 P.3d 502 (Kan. 2012)
Supreme Court of Kansas
July 13, 2012
281 P.3d 502


State ex rel. Stovall v. ******ez, 996 P.2d 371, 27 Kan.App.2d 9 (Kan.App. 2000)
Court of Appeals of Kansas
February 11, 2000
996 P.2d 371
27 Kan.App.2d 9
Our Supreme Court has the inherent power to define and regulate the practice of law. What constitutes the unauthorized practice of law must be determined on a [996 P.2d 375] case-by-case basis. State ex rel. Stephan v. Williams, 246 Kan. 681, 689, 793 P.2d 234 (1990). Our Supreme Court has repeatedly recognized the actions of counseling and advising clients on their legal rights and rendering services requiring knowledge of legal principles to be included within the definition of practicing law. See, e.g., Williams, 246 Kan. at 689, 793 P.2d 234.
Purporting to be an expert, defendant offered a service, the performance of which clearly required knowledge of legal principles. Defendant induced his clients to place their trust in his judgment and skill in framing their claims. Defendant's financial interest in settlement without litigation conflicted with the client's interest in getting a fair settlement. That relationship to the client distinguishes the service defendant offered from the work he did while employed by an insurance company. Defendant's business is distinguished from the service offered by, for instance, ombudsmen and union representatives by his profit motive and potential conflict of interest. The court does not concern itself with the results of the service. See State ex rel. Schneider v. Hill, 223 Kan. 425, 426, 573 P.2d 1078 (1978). Unquestionably, the trial court did not err in finding defendant's consulting services involved the practice of law.
In re Miller, 238 P.3d 227, 290 Kan. 1075 (Kan. 2010)
Supreme Court of Kansas
August 13, 2010
238 P.3d 227
290 Kan. 1075

As the term is generally understood, the practice of law is the doing or performing of services in a court of justice, in any matter depending therein, throughout its various stages, and in conformity to the adopted rules of procedure. But in a larger sense it includes legal advice and counsel, and the preparation of legal instruments and contracts by which legal rights are secured, although such matter may or may not be depending in a court." State, ex rel. [ Boynton ] v. Perkins, 138 Kan. 899, 907, 908, 28 P.2d 765 (1934).'
Christenson v. Akin, 326 P.2d 313, 183 Kan. 207 (Kan. 1958)
Supreme Court of Kansas
June 7, 1958
326 P.2d 313
183 Kan. 207

Matter of Wilkinson, 834 P.2d 1356, 251 Kan. 546 (Kan. 1992)
Supreme Court of Kansas
July 10, 1992
834 P.2d 1356
251 Kan. 546

The unauthorized practice of law allegation arises out of a contract for the sale of a business owned by David Hupp and sold to Earl Rice. Hupp and Rice had negotiated the sale, and Hupp had presented a written proposal to Rice. Rice told Hupp that he needed someone who was knowledgeable about documents and that he would have a friend, who used to be an attorney, look at the contract. Wilkinson is accused of representing Rice.

Watch yourself. Because if I were the seller or representing the seller, I would attempt to void the contract on the idea that you prepared it for the seller and you are not authorized to practice law.
 

justalayman

Senior Member
A week later I stopped by with a contract detailing the transaction - price, inspections, financing contingency, etc. Total of 17 pages. I got the form from a site that provides real estate contracts for my state (Kansas City Associate of Realtors).
did you have permission to use their contracts? I suspect not. Being a former Realtor, I do not recall the [state involved] association of Reators or the NAR giving permission to use their contracts. If you do not have their permission, beyond all the other issues you might have, copyright infringement is another.

Part of the deal was that he pay our closing costs up to $4500 - it is spelled out on the "financial terms" page of the contract. This is where my concerns come in. Several times since then, I have started to get the impression that he's a smidge forgetful. Two times he's said things to me that I know he'd already mentioned (things he was planning to have repaired, introduced me to his girlfriend again), and then when we were negotiating some expenses for foundation repair, he had forgotten about agreeing to pay closing costs. We ended up coming to an agreement for the repairs, and signed an addendum that we wrote out on how that would go down.
who wrote the addendum?


Is there something I can or should do at this point? Should I try to contact the son and just talk about how the deal went down, and my concerns about his dad possibly being forgetful, or just let it ride and see what happens at closing, since it is a signed and sealed contract?
I would worry more about dad's competency to enter into a contract. Forgetting is one thing but the way you talk, he may never have understood the contract to begin.
 
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FlyingRon

Senior Member
Umm...I don't think it's unauthorized practice of law. He's one of the parties to the contract. He's allowed to write his own contract. I've brought contracts to just about EVERY property I've bought over the years. I never used a lawyer to create them (though typically, they were just fill in the blanks standard forms). All of your cases were places where defendants provided legal services to others. Here he's doing it pro se.

The copyright right is a real (though independent) issue.
 

ksguy

Junior Member
Oh and to back up what I am saying:

In re Weaver, 281 P.3d 502 (Kan. 2012)
Supreme Court of Kansas
July 13, 2012
281 P.3d 502


State ex rel. Stovall v. ******ez, 996 P.2d 371, 27 Kan.App.2d 9 (Kan.App. 2000)
Court of Appeals of Kansas
February 11, 2000
996 P.2d 371
27 Kan.App.2d 9


In re Miller, 238 P.3d 227, 290 Kan. 1075 (Kan. 2010)
Supreme Court of Kansas
August 13, 2010
238 P.3d 227
290 Kan. 1075



Christenson v. Akin, 326 P.2d 313, 183 Kan. 207 (Kan. 1958)
Supreme Court of Kansas
June 7, 1958
326 P.2d 313
183 Kan. 207

Matter of Wilkinson, 834 P.2d 1356, 251 Kan. 546 (Kan. 1992)
Supreme Court of Kansas
July 10, 1992
834 P.2d 1356
251 Kan. 546




Watch yourself. Because if I were the seller or representing the seller, I would attempt to void the contract on the idea that you prepared it for the seller and you are not authorized to practice law.

Wow, this comes across as quite aggressive and presumptuous to a guy coming in here with an honest question.

I appreciate the information you gave, but at no time did I claim to be a lawyer or an expert in legal matters when presenting myself to the seller. How does my situation vary from any agent-involved real estate transaction? In any such situation, the buyer's agent prepares the contract for sale to the seller, with the terms that the buyer would like to purchase under - same as I did. Buyer's agents don't represent themselves to be attorneys. Additionally, with hundreds, if not thousands, of FSBO transactions occurring in Kansas every year, would you assert that in every situation, a buyer who presented a contract offer to a seller is "practicing law" if the contract wasn't prepared by an attorney?

But in a larger sense it includes legal advice and counsel, and the preparation of legal instruments and contracts by which legal rights are secured
Given the "AND" in there, since I did not offer legal advice or counsel, I'd argue that doesn't apply to this situation.
 

justalayman

Senior Member
Umm...I don't think it's unauthorized practice of law. He's one of the parties to the contract. He's allowed to write his own contract. I've brought contracts to just about EVERY property I've bought over the years. I never used a lawyer to create them (though typically, they were just fill in the blanks standard forms). All of your cases were places where defendants provided legal services to others. Here he's doing it pro se.

The copyright right is a real (though independent) issue.
just a comment on the UPL:

as a Realtor, the reason we had pre-written contracts was so it avoided the issue of UPL. I do not know how Kansas has decided it, if ever brought to the courts but in my state the use of a pre-printed form contract was not UPL


UNLESS we advised the principal concerning issues of the law. It was a fine line at times.
 

FlyingRon

Senior Member
just a comment on the UPL:

as a Realtor, the reason we had pre-written contracts was so it avoided the issue of UPL. I do not know how Kansas has decided it, if ever brought to the courts but in my state the use of a pre-printed form contract was not UPL


UNLESS we advised the principal concerning issues of the law. It was a fine line at times.
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.
 

ksguy

Junior Member
did you have permission to use their contracts? I suspect not. Being a former Realtor, I do not recall the [state involved] association of Reators or the NAR giving permission to use their contracts. If you do not have their permission, beyond all the other issues you might have, copyright infringement is another.

who wrote the addendum?

I would worry more about dad's competency to enter into a contract. Forgetting is one thing but the way you talk, he may never have understood the contract to begin.
Thanks justalayman. I'll leave use of the contract out of my discussion as a separate issue. All I'll mention there is that I stripped out anything that involved broker/buyer and broker/seller relationships and fees, but left any mention of attorney review in there.

As for the addendum, I hand-wrote a "resolution of unacceptable conditions" addendum at his dining room table with him. We discussed and agreed to terms before I wrote anything, and he read through it again prior to signing and dating, and I left him a copy of the inspection report and estimate from the foundation contractor.

As for the competency to enter into a contract, I appreciate where you are coming from, but he generally seems to be a pretty sharp guy. When we were reviewing my offer, his primary interest was the financial arrangements. He was an accountant before he retired in the 80's, and re-did my math on a separate sheet of paper to make sure I did it right. :) I'm beginning to wonder if he's just not confusing what I'm referring to as closing costs. Also, I suppose it is also possible he was showing the house to other parties before all of my contingencies had been met, and just forgot who he had talked to about what.
 

justalayman

Senior Member
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.
the UPL would be if the OP advised the seller regarding the legal issues. In that case, OP would be providing legal services to others; the seller.
 

justalayman

Senior Member
ksguy;3297676]Thanks justalayman. I'll leave use of the contract out of my discussion as a separate issue. All I'll mention there is that I stripped out anything that involved broker/buyer and broker/seller relationships and fees, but left any mention of attorney review in there.
irrelevant. I doubt anything will come of this but I suggest you hope it doesn't. The Realtors are known to aggressively protect their rights and they paid a lawyer good money to write those contracts for them.


As for the addendum, I hand-wrote a "resolution of unacceptable conditions" addendum at his dining room table with him. We discussed and agreed to terms before I wrote anything, and he read through it again prior to signing and dating, and I left him a copy of the inspection report and estimate from the foundation contractor.
so that is writing a contract. While respecting Ron's points, it can stray into UPL if one is not aware of how it happens and takes efforts to avoid it.

and to support that, that is why most Realtor groups use fill in the blanks contracts.

I'm beginning to wonder if he's just not confusing what I'm referring to as closing costs. Also, I suppose it is also possible he was showing the house to other parties before all of my contingencies had been met, and just forgot who he had talked to about what.
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.
 

FlyingRon

Senior Member
the UPL would be if the OP advised the seller regarding the legal issues. In that case, OP would be providing legal services to others; the seller.
As long as he didn't offer anything outside of the contract being negotiated, the answer is still NO.
 

tranquility

Senior Member
Umm...I don't think it's unauthorized practice of law. He's one of the parties to the contract. He's allowed to write his own contract. I've brought contracts to just about EVERY property I've bought over the years. I never used a lawyer to create them (though typically, they were just fill in the blanks standard forms). All of your cases were places where defendants provided legal services to others. Here he's doing it pro se.

The copyright right is a real (though independent) issue.
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.
 

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