Dear Edith: We are thinking of selling our house through FSBO (For Sale By Owner) next year. What are the important legal things that we must take care of? Is hiring a real estate attorney enough to deal with those things?
—T., via askedith.com
Answer: The legal aspects of selling pretty much come down to arriving at an acceptable written sales contract, proving clear title to the property, making disclosures required by law, observing fair housing regulations and, finally, giving the buyer a proper deed.
You may want your attorney to draw up your sales contract. Your lawyer could also hold the buyers' deposit in escrow until the closing.
Beyond that it's difficult to answer your question because I don't know where you're located. There's a lot of legal work involved in a closing, and you want to receive credit for sums adjusted at the final settlement. Procedures vary widely from one area to another, and you'll follow local custom whether you're using an agent or not.
There are lots of other things you need to study — pricing properly to attract buyers without short-changing yourselves, investigating would-be buyers' financial situation so you don't get the property tied up in a contract that goes nowhere, negotiating in writing (oral doesn't count.) But you asked just about the legal end, so your contract and the final closing are pretty much it.
Nine Years Rent
Dear Ms. Lank: Unfortunately, I am in prison right now. Nine years ago, my mother passed away, and I inherited her house. By fraud, the house was stolen from me and rented out. I just regained title by re-opening the estate.
How can I recoup the nine years of rent the other party has earned all these years? — B. B.
Answer: You can take the question to a lawyer. But even if you went to court and won a judgment, I doubt if you'd end up with nine years' rent. Expenses — who's been paying property taxes, for instance — could complicate matters.
And what could you do with a judgment if you were awarded one? It won't be worth incurring legal costs if the other party has poor credit and you can't collect anything. In other circumstances, I'd suggest exploring the matter on your own in small claims court but you probably can't do that right now.
You'll be asking for trouble if you try to be an absentee landlord. Unless you presently have a really good tenant, put the house in the hands of a real estate broker, ask a bargain price, and sell it promptly.
Worried About Address
Dear Edith: I enclose a clipping from your column about someone who had trouble buying a short sale because the bank said that "the contract listed an incomplete address on the property."
A few years ago when the 911 people decided to change our address, I was 2 Marilla Lane. They changed it to 21 Marilla Lane. A lot of us were stuck with new addresses. I went to the tax office with my title to change it there and was told it was not necessary. This is a mobile home park. I worry that this could look like an incomplete address to a bank or anyone I might sell to. I get mail at 21 Marilla Lane, but my deed or title reads 2 Marilla. — J. S.
Answer: It's not clear whether you own the land under your home or rent it. You mention both a deed and a title and they're not the same thing. But, anyhow, short sales are notoriously difficult and complicated. Your sale might well be much simpler. If you have neighbors who bought in the past few years, ask whether the change of address gave them any trouble. I suspect you have nothing to be concerned about.
Dear Ms. Lank: I am a real estate attorney responding to a recent column. It involves the house transferred to three siblings. There are two more issues I see. First, I have seen it numerous times, after parents transfer houses in their children's names, one of the children declares bankruptcy. They never "schedule" it in the bankruptcy, which is actually fraudulent, but they don't because they still think of it as their parents'. It is subject to the interest of their creditors.
Next, parents don't always name the children as being survivors of each other. The heirs of that deceased sibling may actually own a third, depending on whether the children took title as joint tenants or tenants in common. — F.
Answer: I'm afraid there's almost always more that could — and possibly should — be said about the topics in the column. With space limitations, I usually have to limit myself to the question being asked. Then again, of course I am not a lawyer. Let's hope that reader consulted an attorney who would bring up the additional considerations you mention.
Edith Lank will respond personally to any question sent to www.askedith.com or to 240 Hemingway Drive, Rochester NY 14620