Read Get the Facts including the Legal Hotline Q & A
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October 24, 2017 • Stay Connected!
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QUESTION:  The Escalation Addendum, Form 35E, says “Seller must include the entire offer from the buyer whose offer was used to escalate the purchase price. Seller's failure to include the complete escalating offer will defeat seller's escalation of the purchase price.” How long does the seller have to deliver the complete offer? If it is not delivered with the mutually accepted P&S then is it too late? Is the buyer’s broker obligated to request the competing offer? At what point is the escalation ineffective and the buyer recognizes a lower purchase price?



ANSWER:  In a perfect world, the competing offer is included with seller's acceptance of the buyer's offer/escalation addendum. That eliminates this question. Assuming, however, that did not happen, then the transaction and this discussion enter a "slippery slope" analysis. Is it too late if seller sends the competing offer a minute later? Probably not. What about two minutes later? What about an hour later? Two hours later? The following day? A week later?
 
Of course, the form does not answer this slippery slope question. The form simply says what seller is required to do. If seller and listing broker do not accomplish this task at the earliest opportunity, then seller's failure opens the situation to interpretation. In every situation like this, if the dispute cannot be resolved by the parties, then a court will have to resolve the dispute. There is no way that the broker or the Hotline lawyer can anticipate how any court will answer this slippery slope question from one case to the next. The court will consider the length of time it took seller to provide the competing offer, the completeness of the offer that was provided, the impact, if any, on buyer as a result of seller's delay and many other facts that will be given to the judge during the litigation. The Hotline cannot give broker any direction as to how this particular situation will be resolved if a court must resolve the dispute.
 
For future reference, the importance of listing broker attaching a complete copy of the competing offer anytime seller accepts buyer's Form 35E, Escalation Addendum offer, and escalates the price, cannot be overstated. It also bears repeating that the better approach for sellers who receive a Form 35E offer, is for seller to counter buyer's offer with a purchase agreement that establishes a fixed price and eliminates the Form 35E, Escalation Addendum. Listing broker should still expect to provide the buyer with a copy of the competing offer to justify seller's counter offer but delivery of the offer is then a matter of negotiation and not a matter of contract.
 

 

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 . Please tell us your NRDS number when you e-mail the Hotline with your question.


 

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REALTORS®, take action now!
Congress is threatening tax incentives for homeowners, like the mortgage interest deduction and the state and local property tax deduction. These incentives are critical for a strong housing market that creates jobs and builds stable communities. Tell Congress that tax reform should not mean an increase on middle class homeowners.
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Boomers Stuck With Big Homes to Sell
(Source: REALTOR Mag) Baby boomers looking to retire, downsize, or cash in are growing concerned that they’ll be unable to sell their big suburban homes as the younger generation shows different preferences in homes. First-time home buyers are “hungry for starter homes and efficient layouts,” says Javier Vivas, manager of economic research at realtor.com®.
 
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Study: Your Listing’s Words Carry Weight
(Source: Daily Real Estate News) CoreLogic researchers analyzed more than 1 million single-family transactions that closed in the first half of 2017. The following words were found to have a positive impact on the closing price, according to CoreLogic researchers:
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Mess-Free Social Media: Don’t Get Blocked
(Source: YPN Lounge) I’ve seen it before: accounts are blocked, business drys up, and worse yet, a job is lost, fines are imposed, or licenses are revoked—all from a social media post. That’s a mess…a hot mess. It’s no secret that social media can grow your business—or destroy it.  
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Legal Hotline Video:
Buyer's Large Down Payment May Be Deceptive
In Part 4 of 4 of the Financing Provision series, Washington REALTORS® Legal Hotline Lawyer Annie Fitzsimmons discusses how the Buyer’s large down payment described in their Financing Contingency may actually be deceptive...
 
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Primary Mortgage Rates Survey
(updated every Thursday)  Source:  Freddie Mac
 
 October 19, 2017  30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  3.88%  3.19%  3.17%
 Fees & Points  0.5
 0.5
 0.4
 Margin  N/A  N/A  2.74



 October 12, 2017      30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  3.91%  3.21%  3.16%
 Fees & Points  0.5
 0.5
 0.4
 Margin  N/A  N/A  2.74



 October 5, 2017       30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  3.85%  3.15%  3.18%
 Fees & Points  0.5
 0.5
 0.4
 Margin  N/A  N/A  2.74



 September 28, 2017  30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  3.83%  3.13%  3.20%
 Fees & Points  0.6
 0.5
 0.5
 Margin  N/A  N/A  2.74



 September 21, 2017  30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  3.83%  3.13%  3.17%
 Fees & Points  0.5
 0.5
 0.4
 Margin  N/A  N/A  2.74





 
 
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