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Legal Hotline Attorney Vern Jarboe answers frequently asked questions from Kansas REALTORS® about their transactions.
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Disclosure - Report from Previous Transaction
Question: You have a question about how best to disclose information from an old report.
Answer: The case law certainly makes it clear that information contained in an old report should be disclosed to a buyer. I prefer providing the buyer with a copy of the report by mail, email, or simply handing them a copy. You should keep some documentation that you delivered the report to them.
License Law - Prize, Gift, and Gratuity
Question: You asked about a buyer assistance program being offered by a local apartment complex. They want to induce buyer to sign a one year lease by giving them a 10% credit against that buyer's eventual purchase of a home. The 10% credit comes from a buyer agent paying the buyer's closing costs up to the limit of the 10% credit.
Answer: I directed you to the prize, gift, and gratuity regulations of the Real Estate Commission in terms of permissible offerings to buyers.
Contract - Appraiser Fails to Appraise
Question: You have a situation where an appraiser looked at the house and raised a siding issue indicating the property would not pass the loan program for which the appraisal was being conducted.
Answer: Arguably, the buyer has not "pursued in good faith" a loan. Standard contract language with respect to loans requires the buyer to pursue the loan in good faith. Measuring good faith is like the word reasonable and different parties could come to different conclusions.
Miscellaneous - Truth and Lending Act
Question: You have a situation where you intend to offer property for sale with owner financing. You would like to advertise some of the terms and conditions of the sale.
Answer: Once you start advertising any of the terms known as triggering terms under the Truth in Lending Act, then you have to advertise everything required by regulation Z. Most real estate brokers don't want to be held to that standard. You might consider indicating that the seller would consider seller financing to qualified buyers without advertising any of the triggering terms.
Contract - Servicing Company Addendum
Question: You have a listing addendum sheet prepared by a loan servicing company. They indicate in this that the property is being sold in its as is condition. You ask whether or not that has any impact on other contract language allowing the buyer to have inspections.
Answer: As is language does not conflict with inspections. Language permitting a buyer to do inspections and making the contract contingent upon satisfactory completion of property defect or repairs is still specific language that would override the basic as is language identified in the addendum.
License Law - Purchase of a Listing
Question: You have a situation where you would like to purchase one of the properties that you currently have listed.
Answer: It would be important to cancel the listing agreement so that you are clearly not acting as a seller's agent or transaction broker as the listing may provide. If you buy the property in its unlisted context then you can be representing yourself as a buyer's agent. You need to make sure that you document this as occurring with the informed consent of the seller. Generally, I recommend you refer sellers to attorneys for independent legal advice prior to them accepting the offer.
