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Get the Facts  Weekly Membership Newsletter
January 31, 2017  -  Stay Connected!
 
    

 
QUESTION: If the buyers want to back out of a transaction due to the inspection and we use the 35R stating they are backing out and earnest money is to be refunded to the buyer, why are some title/escrow companies not accepting this? They say this is not a legal way for buyers to get their money back and they advise us that we have to do a Form 50 or 51? Isn’t our Form 35R, stating that the transaction is terminated and buyer gets their money back, enough?



ANSWER:  Form 35R is enough to control the relationship between buyer and seller. Based on the facts presented, the PSA is terminated and buyer is entitled to the EM. However, escrow's requirement is entirely reasonable. Escrow is NOT a party to the PSA.
 
Buyer and seller are the only parties to the purchase agreement. Escrow is not a party to the purchase agreement. The parties agree, between themselves, that if the buyer properly terminates pursuant to the inspection contingency, seller will release the EM to buyer. Escrow is holding the EM for the benefit of both buyer and seller and as a fiduciary to both. If escrow releases the EM to either party without the consent of the other, escrow risks a complaint from the other party that escrow violated its fiduciary duties by wrongfully releasing the EM.
 
Escrow has no way of knowing whether seller agrees that buyer's termination was proper and timely under the inspection contingency unless escrow receives seller's written instruction to release the EM. In a transaction that is obviously not going to close, escrow stands to gain no compensation. In exchange for zero compensation, escrow cannot afford to take any risk that either party will claim ownership of the EM after escrow released the funds to a different party. For that reason, escrow reasonably requires both parties to consent to the release of EM before escrow will release EM. Printable Version

The Legal Hotline Lawyer does not represent Washington REALTORS or its members. To browse through our database of past Q & A's, visit www.warealtor.org. Attorney Annie Fitzsimmons writes the Legal Hotline Question and Answer of the Week. Please submit questions to legalhotline@warealtor.org or call (800) 562-6027. Please have your NRDS number ready when you call or e-mail the Hotline with your question.

 

Thank you, Corporate Sponsors!

   

 

 
 
News Release: Realtors support bi-partisan bill to improve housing affordability, address homelessness
OLYMPIA, Wash. – The Washington REALTORS® Association is a strong proponent of SB 5254, a measure introduced in this year’s state legislative session to address homelessness and the lack of affordable housing due to low housing inventory and a steep increase in homes prices. [Read more...]
 

 
 
NAR's Letter to Dr. Ben Carson
The National Association of REALTORS® (NAR) understands President Trump and the new Administration have suspended and are currently reviewing recent regulatory actions taken by the Obama Administration, including the Federal Housing Administration’s (FHA) 25 basis point reduction of the FHA Annual Mortgage Insurance Premium rates for mortgages with a closing/disbursement date on or after January 27, 2017. NAR appreciates this opportunity to express our support for reinstating the premium reduction. [Read the full letter...]
 

 
 
Want to join the CFPB’s advisory board and councils?
Now accepting applications
The Consumer Financial Protection Bureau started accepting applications to join three of its four independent advisory groups, which give formal input on everything from consumer engagement, to policy development to research. In the fall of 2017, seven seats on the Consumer Advisory Board, two seats on the Community Bank Advisory Council and six seats on the Credit Union Advisory Council will become available. The Academic Research Council is the only group not accepting applications. [Read more...]
 

 
 
5 Signs Your Website Is Out of Date
(Source: REALTORMag) Internet users don't tend to have a lot of patience. For example, 79 percent of users will search for another site to complete a task if your website is not optimized, according to an ExperienceDynamics' study. A broken link or even the slightest delay could be enough to get them to move on. [Read more...]
 

 
 
You Can't Improve What You Don't Measure Real estate is a business of people. But how you find these people, how you stay connected, how long it takes you to convert and close a client, and all your expenses associated with running your business can be measured by numbers. Numbers make it easy for you to measure how you are doing in your business and can help you determine how, or if, your business is growing. RE Magazine contributor Denise Lones has some excellent advice on where to start... [Read the article here...]
 

Primary Mortgage Rates Survey
(updated every Thursday)


 
 
UPCOMING CLASSES
 
Put a S.O.C. in it: Standard of Care of a Lawyer
Wednesday, February 8, 2017 (8:30 AM to 4:30 PM) 7.5 CE Hours
Tacoma Pierce County Association of REALTORS, Tacoma, Washington

Why Do We Do This and Not That?
Tuesday, February 21, 2017 (12:45 PM to 4:45 PM) 4.0 CE Hours
Towne Place Suites Vancouver, Vancouver

New Forms, Hot Topics, and Other Industry Fun
Thursday, February 23, 2017 (8:30 AM to 12:00 PM) 3.5 CE Hours
Tri-City Association of Realtors, Kennewick

New Forms, Hot Topics, and Other Industry Fun
Thursday, February 23, 2017 (1:00 PM to 4:30 PM) 3.5 CE Hours
Walla Walla Police Department, Walla Walla
 
New Forms, Hot Topics, and Other Industry Fun
Friday, February 24, 2017 (8:30 AM to 12:00 PM) 3.5 CE Hours
Hell's Canyon Resort, Clarkston

New Forms, Hot Topics, and Other Industry Fun
Friday, February 24, 2017 (1:30 PM to 5:00 PM) 3.5 CE Hours
Quality Inn, Pullman

2017 RE Business Symposium
Thursday, April 27, 2017 (8:30 AM to 4:00 PM)
Hilton Seattle Airport & Conference Center, Seattle

Disclosure Requirements in Real Estate Transactions - 7.5
Thursday, September 14, 2017 (8:30 AM to 5:00 PM) 7.5 CE Hours
Tri-City Association of Realtors, Kennewick

 

 
 
QUESTION from 1/28/2016 - I'm representing a seller with multiple offers. Many of the offers had a pre-inspection and completed a form 35P prior to making an offer. The offer to Purchase has no 35 included. Should I insist on a 35 with the waiver of inspection checked or is the 35P in the file sufficient?

  
ANSWER - To the extent that listing broker directs the contents of offers before the offers are presented, it would be a good practice for listing brokers to encourage buyer offers to include a Form 35 with "waiver of inspection" checked. If seller counters an offer that does not include the Form 35 waiver of inspection, seller may want to include that form as part of seller's counter. If seller is inclined to accept an offer, without countering, and the offer does not include the Form 35 waiver of inspection, then broker should discuss this issue with seller and allow seller to determine whether it is important to seller to counter the offer with inclusion of that form. Looking at the same question from the buyer broker's perspective, a Form 35 with the "Waiver of Inspection" box checked should be included in every offer where a buyer is waiving an inspection contingency. This practice insures buyer's awareness of the opportunity to include a request for an inspection contingency in buyer's offer and it protects buyer broker from post-closing claims that buyer was never made aware of the opportunity to request an inspection contingency.
 
(You will need your NRDS# & password to access the Legal Hotline)
 
The Legal Hotline Lawyer does not represent Washington REALTORS or its members. To browse through our database of past Q & A's, visit www.warealtor.org. Attorney Annie Fitzsimmons writes the Legal Hotline Question and Answer of the Week. Please submit questions to legalhotline@warealtor.org or call (800) 562-6027. Please have your NRDS number ready when you call or e-mail the Hotline with your question.