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July 24, 2018 • Stay Connected!
         

QUESTION:  I am representing my buyer and submitted an offer without an Exhibit A because listing agent didn’t have one in associated docs. I did however use a Form 34 and copied and pasted in the County’s description for this parcel. Both parties signed. Is this an acceptable replacement for an Exhibit A? My managing broker says that it isn’t.



ANSWER:  It is not an acceptable, long-term replacement for the Exhibit A. In this situation, buyer broker should work with all diligence to get an actual Exhibit A, from the title company, immediately. Broker needs to obtain the preliminary commitment for title and attach the Exhibit A from the preliminary commitment, to the PSA, as a replacement for the existing Exhibit A. The initials of both parties will be required to do this. This problem was created by the lack of a complete and accurate legal description being included with the listing in the MLS. That problem could be the result of any number of happenings, none of which are important to decipher at this time. What is important at this time is determining, for future reference, whether buyer's broker created the next best Exhibit A since the best Exhibit A was not available, and, in light of current facts, what does buyer's broker need to do now?
 
When buyer broker is confronted with a situation where no Exhibit A to a preliminary commitment for title is attached to an MLS listing yet broker needs to write an offer, broker must locate the next best alternative for a legal description. If broker can put his hands on the last recorded warranty deed used to convey title to the property, that is typically the next best alternative. If that deed cannot be accessed, then creation of an Exhibit A using the information available from the county, through the county's public records website, is probably the third best alternative. That is what broker did in this situation. It should be recognized that the information provided by the county is typically an "abbreviated" legal description which, by definition, is NOT complete and accurate. Without a complete and accurate legal description, the PSA is subject to termination by either party.
 
Whenever a PSA is put together using anything other than an Exhibit A to the preliminary commitment for title as the legal description, then both brokers should work expeditiously to get a preliminary commitment for title, Exhibit A, and attach it to the existing PSA in replacement of the existing Exhibit A. The parties will have to sign/initial the substitution of one Exhibit A for the other. The reason it is important to work quickly, to make this happen, is because the brokers need to make this happen while both parties remain eager to be in contract with one another. If this request comes from one party, at a time when the other party prefers to move onto something else, then the other party is unlikely to agree to modify the contract by replacing the Exhibit A. In order to create the best PSA, which is the least vulnerable to attack, the preliminary commitment for title Exhibit A should be attached to the PSA.
 
That said, if the PSA, as drafted, were challenged by either party, it is unclear what a court would say. The PSA must include a complete and accurate legal description to be enforceable. If the legal description, as broker drafted it for this PSA is complete and accurate, then the PSA is binding. If it is not complete and accurate, then the PSA is voidable. The reason it is important to include the preliminary commitment Ex. A is because that legal description is reliably complete and accurate and eliminates any argument that the legal description makes the PSA vulnerable. Any other legal description gives the party who wants to terminate a reason to hope that they can terminate. Whether they can terminate depends upon the competency of the legal description actually used. For that reason, in this situation, broker should attempt to substitute the existing legal description with a preliminary commitment Ex. A if possible. If that is not possible and if seller attempts to terminate this PSA, then broker should advise buyer, 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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Primary Mortgage Rates Survey
(updated every Thursday)  Source:  Freddie Mac
 
 July 19, 2018       30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  4.52%  4.00%  3.87%
 Fees & Points  0.4
 0.4
 0.3
 Margin  N/A  N/A  2.76



 July 12, 2018       30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  4.53%  4.02%  3.86%
 Fees & Points  0.4
 0.4
 0.3
 Margin  N/A  N/A  2.76



 July 5, 2018       30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  4.55%  4.04%  3.87%
 Fees & Points  0.5
 0.5
 0.3
 Margin  N/A  N/A  2.77



 July 5, 2018       30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  4.52%  3.99%  3.74%
 Fees & Points  0.5
 0.4
 0.3
 Margin  N/A  N/A  2.77



 June 21, 2018       30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  4.57%  4.04%  3.83%
 Fees & Points  0.5
 0.4
 0.3
 Margin  N/A  N/A  2.77



 
 UPCOMING CLASSES
 
Date Class Location CE  
26-JULY  NAR Code of Ethics Kennewick 3.0 More info...
16-AUG  The Hotline Vs. The Bottom Line Spokane 7.5 More info...
16-AUG  NAR Code of Ethics Webinar Live Webinar 3.0 More info...
23-AUG  CORE & More Longview 7.5 More info...
29-AUG  To Disclose or Not to Disclose Yakima 4.0 More info...
29-AUG  Don't Get Whacked by the WACs Yakima 3.5 More info...
29-AUG  NAR Code of Ethics Bellingham 3.0 More info...
30-AUG  The Hotline Vs. The Bottom Line Walla Walla 7.5 More info...
         

More Classes →


  
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Jackie Leavenworth is back! Join Washington REALTORS® at the Fall Business Symposium on September 13th for a full day including three engaging sessions taught by Jackie. We'll be back at the SeaTac Conference Center at the Airport for this one 7.5 CE, parking, and lunch are included. Register today!
 
  
COE WEBINARS ARE BACK BY DEMAND
Washington REALTORS® will host COE Webinars starting in August to assist members with completing the mandatory training. Don't wait until the last minute, though! These webinars are capped and they fill up fast...
 
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