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December 12, 2017 • Stay Connected!
         

QUESTION:  We have a mutually accepted PSA with a close date of 11.29. Buyer sent an extension which the Listing Agent said seller would sign once she cooled off. Extension was never signed and we are now out of contract. On 12/7, Buyers sent termination notice based on failed financing. Seller now wants to go after Buyer's earnest money for failure to close. What will happen next?



ANSWER: There is no way the Hotline lawyer can predict with certainty what will happen next. Any number of things could happen next.

Buyer could get a letter from buyer's lender, conforming to the requirements of Form 22A, paragraph 5, and prove buyer's entitlement to recovery of the EM, assuming buyer's financing contingency was still active on the date of termination. The fact that the letter is issued by the lender after expiration of the purchase agreement is irrelevant. With that letter from buyer's lender, buyer/buyer's broker/listing broker may be able to persuade seller to walk away from the EM fight. Or, seller may choose to move forward with the fight.

Or, buyer may be unable, for any number of reasons, to get the required letter from buyer's lender (perhaps buyer did not have sufficient funds or did not make timely loan application, for example). With a failure to obtain the required letter, perhaps buyer will surrender the EM to seller.

Perhaps the buyer will obtain the letter but seller will question buyer's "good faith" based on something the lender says about the reason the funds were unavailable and the parties will agree to split the EM in settlement rather than waging litigation.

Perhaps one of the parties will send a demand letter to the escrow company demanding release of the EM, the escrow company will send the required notice to the other side and the other side will fail to respond timely, in which case escrow will release funds to the party who demanded release.

Perhaps escrow will send the required notice and the other party will respond, causing escrow to file an interpleader action in Superior Court, starting a lawsuit between buyer and seller, and the two can lawyer up and battle out ownership of the EM.

There is no way to predict what will happen next between buyer and seller. There is no question, however, as to what MUST happen next from broker. The purchase agreement is now terminated. There are no remaining RE Brokerage Services that can be provided to these two parties. All that remains is a legal battle over personal property (the EM). As a result, broker MUST advise her client, in writing, to seek legal counsel.
 

 

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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FHA to Increase Loan Limits in 2018
(Source: REALTOR Mag) Following on the heels of the Federal Housing Finance Agency, the Federal Housing Administration announced that it will increase its loan limits in most areas of the country in 2018. The FHFA had announced new limits for loans eligible for purchase or guarantee by Fannie Mae and Freddie Mac on Nov. 28.
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Legislative Day Event - Open For Registration!
Washington REALTORS® come from all over the state for this event. Join us in Olympia on January 17-18. Network, have fun at the Installation Banquet, and visit Legislators on the Hill with your peers. Be a part of an event that helps shape the real estate industry. Bring members from your office.  Hill Day (Thursday) is free for first-time attendees!
 
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How can you make your data safe?
(Source: Tech Helpline) The real estate industry is particularly vulnerable to data theft. It’s due to both the nature of our business and the fact that we have more than 1 million independent contractors. Because real estate involves bank transfers – earnest money deposits and the wiring of closing funds – cyber-criminals see the business as an attractive target.
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Hashtag Do's & Don'ts
(Source: Katie Lance) Before we go down this train of hashtags, and are they worth it, why people use them, etc., one of the things to think about when it comes to hashtags is context. Let me just say first and foremost, hashtags work best when you use them either on Twitter or Instagram.
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Legal Hotline Video:
New Publication Available
This week, Annie Fitzsimmons, talks about a new publication from the Washington Department of Licensing that explains the rules and regulations of real estate advertising. The publication proves to be very informative and even provides helpful examples. Download the publication. 
 
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Primary Mortgage Rates Survey
(updated every Thursday)  Source:  Freddie Mac
 
 December 7, 2017  30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  3.94%  3.36%  3.35%
 Fees & Points  0.5
 0.5
 0.3
 Margin  N/A  N/A  2.75



 November 30, 2017  30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  3.90%  3.30%  3.32%
 Fees & Points  0.5
 0.5
 0.3
 Margin  N/A  N/A  2.74




 November 22, 2017  30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  3.92%  3.32%  3.22%
 Fees & Points  0.5
 0.4
 0.4
 Margin  N/A  N/A  2.74



 November 16, 2017  30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  3.95%  3.31%  3.21%
 Fees & Points  0.5
 0.5
 0.4
 Margin  N/A  N/A  2.74



 November 9, 2017  30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  3.90%  3.24%  3.22%
 Fees & Points  0.4
 0.5
 0.5
 Margin  N/A  N/A  2.74





 
 
 UPCOMING CLASSES
Date Class Location CE  
25-JAN
Intro to WA Landlord Tenant Law
Seattle
3.0
More info...
26-JAN Current Issues in WA Residential RELangley3.0More info...
26-JANThe Best of the Legal Hotline Langley4.0More info...
28-MAR NAR Code of EthicsWalla Walla  3.0 More info...
28-MAR Current Issues in WA RE Walla Walla 3.0More info...


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