Law Offices of
Frequently Asked Questions About Real Estate Law
What are my options on representation?
The different types of representation when you buy or sell real estate are:
- Broker (Managing)
- Broker (Associate)
Brokers can be:
- Seller’s representative
- Buyer’s representative
- Dual representative
- Exclusive Seller’s representative
- Exclusive Buyer’s representative
A managing broker is responsible for agents and broker associates operating under his or her license
While it is possible for an agent or broker to ‘double end’ a transaction by representing both buyer and seller, parties to the transaction may be better served by each having dedicated representation.
The reasoning for this is that a sales transaction usually is negotiated and each of the parties is interested in achieving the best price and terms possible. A real estate agent or broker, while legally obligated to be fair to all parties, nonetheless has a primary fiduciary duty to either the buyer or seller by contract. Human nature is to favor your employer over a negotiating adversary.
So it is generally best for the buyer and the seller to each have different representation. This can, however, still result in a perceived conflict when both the buyer’s agent and the seller’s agent are licensed under the same broker.
An ‘exclusive’ buyer or seller agent has no fiduciary obligation to the opposing party, however, they are obligated to act fairly and honestly. They have absolutely no obligation to reveal any of their client’s secret negotiating strategy to the opposition.
What's the difference between "Buyer's Broker" and "Exclusive Buyer's Broker"?
An ‘Exclusive Buyer’s Broker’ does not take listings and so does not ever represent the seller in a transaction. An EBB may or may not have a contract with a buyer setting terms of exclusive representation. The buyer is responsible for the EBB fee, however, it is customary for the seller’s broker to pay 1/2 of the seller’s broker fee to the buyer’s broker.
Just as a listing broker has an exclusive right to a selling commission during the term of his contract, so does a seller’s broker have an exclusive right to commission on the buyer’s purchase.
What Is a Quitclaim Deed?
A “Quitclaim Deed” declares that the Grantor conveys his interest in the property <<<if he/she indeed has any conveyable interest in it>>>. It is used when there may or may not be an interest in the property and it is desired to clear the title of that possibility.
What is the difference between a cooperative and a condominium?
Condominium ownership means you legally own a particular unit in a multiple unit structure of the building, and typically you share in ownership of “common” areas such as yards, gardens, swimming pools and clubhouse. You pay into an association that manages the common areas.
Your ownership in a “co-op” is stock in the corporation that owns the building, grounds, and apartments. You lease the apartment from the corporation.
How do I deal with a Buyer’s complaint that I misrepresented something?
A dissatisfied buyer may choose to sue you for ‘failure to disclose.’
Your liability in such a suit can be substantial. Avoiding this potential liability requires you (and your real estate broker if you have one) to be meticulous in fulfilling your obligations to disclose known defects or issues affecting the value or desirability of the property.
Selling the property ‘as is’ does not protect you from these obligations.
California requires you to provide your buyer with a Transfer Disclosure Statement (TDS). This should be one of the first documents you complete and provide the buyer. The buyer has the right to cancel the contract within three days of your delivering the TDS in person, or five days if it is delivered by mail.
You and your real estate agent must make a full disclosure in the TDS to protect you against later allegations of misrepresentation or fraud.
The list of issues to disclose on the TDS is long. You may feel some issues to be unimportant, but it is far better to be too thorough than to decide an issue is not relevant. If you are unsure consult your real estate broker or attorney.
Should your buyer sue and prove that you knowingly concealed a defect or information that negatively affects the property’s value, the impact can be very serious and result in Compensatory Damages, Punitive Damages, or even Rescission of the sales contract.
For more complete information about your own situation, give us a call.
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