Specialist · Spokane, WA · Member since 2014 · 97 posts · 38 votes
Hi all,
I was a licensed realtor (Washington State) for a number of years, so I have the RE experience from that angle. My question is how many of you write your own Purchase and Sale Agreements? Where do you get the wording, addenda, etc.? How do you choose a closing agent? Any other advice? I've considered re-activating my license, but I just can't see giving a brokerage that much of my deals.
I use NWMLS / CBA PSA's but have also written my own. Depends who the audience is and what the purpose is. If I am working on a deal with a small mom and pop for myself paying all cash, I write a simple PSA as it's straight forward and much easier and I feel they feel much more comfortable walking through it.
As to contracts, I really suggest you see your attorney. Yes, I have written my own contracts, like momma said, do as I say, not as I do. Stick to customary terms in your area, don't get creative unless you can back it up with the right experience. Then, have your contracts blessed with legal water from a local attorney.
As to sharing the money, don't avoid Realtors, I think a good one earns what they make from me, learn to utilize them. There will be deals where you won't need a Realtor, then move on your own if you know what needs to be accomplished to get to the closing table.
Interview closing companies and title folks, walk in and meet them, introduce yourself, see how things click, ask a few questions but folks should realize they have work to do, so don't start out being a pest or trying to get a free education. Then, you should be able to select the folks you want to work with.
Closers and title plants are highly regulated, don't start out with screwy stuff.
If you think you know RE and you're getting back in, start with the basics again, see if 43,560 sq. ft. rings a bell. In other words refresh yourself from the beginning and you can zip right through materials. Then hit the regulations and RE laws, things have changed.
Make a plan and execute the plan, pass it by your attorney. Good luck! :)
@Bill Gulley Thanks. I should have worded my question differently. I'm not interested in getting creative with contracts, just bypassing the brokers and making my own offers (Obviously not on every deal, but when possible) and then establishing a relationship with a closer/attorney to finish my deals.
As far as contracts go, I'm curious about any automated systems (along the lines of FSBO support) that any investors might like.
I have a favorite closer/attorney from my RE years, just never worked with her this way. So before re-starting the relationship as an investor (vs as a realtor), I'm just trying to anticipate the key issues and nuances to address.
BTW: I'm still a Realtor, just not active. And your'e right they can play a valuable role. But if I can play it when possible, I improve my position and make my company more attractive to potential collaborators by being able to keep commission $$ in the profit column.
I use NWMLS / CBA PSA's but have also written my own. Depends who the audience is and what the purpose is. If I am working on a deal with a small mom and pop for myself paying all cash, I write a simple PSA as it's straight forward and much easier and I feel they feel much more comfortable walking through it.
You can use the realtor board contract for your area, even if you are not an agent. But I don't advise it. It's too comprehensive and too buyer protective, IMO. Also, if you have a niche like pre foreclosures, you're going to want a contract that addresses any required disclosures, etc. You can use anything that outlines price and terms, earnest money and remedy upon default. My PA is short to make it easy for buyer's understand. Any attorney would be happy to spend an hour with you and give you general purchase agreements to get started.
Also, depending on the deal, you can just give escrow the price and terms and use escrow instructions to complete the deal.
Oh, then you don't really have an issue, you just need to warm up again!
BTW, Realtor contracts are not actually public domain contracts, they are copyrighted. Now, you may use one and you may not go to the contract concentration center but you may well find that stealing copyrighted contracts won't be enforced. All of the paragraphs in a state contract are there for a reason, so be careful what you dismiss as not being important or as a buyer/seller advantage. I agree that state contracts lean toward the seller, that's mainly due to the fact they are the land owners in that state. and usually pay the cost of the sale. Notice the responsibility for the sale is with the listing broker.
Not saying you can't draft something different, but you'd better stick to customary issues and not skew your contract so much as it gives no protections to either party, that can just be tossed out of court. Have your attorney review your contracts. :)
Both good points. I really like "just give escrow the price and terms" K. Marie ( that's what I was looking for), and your sage advice Bill. Thanks again!
@K. Marie Poe @Bill Gulley Thanks for your insights.
Both good points. I really like "just give escrow the price and terms" K. Marie ( that's what I was looking for), and your sage advice Bill. Thanks again!
This is a great topic of conversation - one which I would like to know more about. My REO and shortsale investment purchases have been through RE agent but deals are becoming harder to find so it seems finding motivated sellers might be the way to go now.
By the way, Patrick, check out Aaron Mazzrillo Podcast - he just does the "escrow price and terms" deals:
How about assignments? Any paperwork out there for those or just see a RE attorney?
@Zach Schwarzmiller - is First American Title and Escrow investor friendly? Are they OK with assignments or double closings?
This is something I need to learn more about. Anyone that can point me to more info on this is greatly appreciated - here on BP, books, courses, whatever.
@Gerald K. Thanks, that podcast was exactly what I was looking for.
You're welcome! Actually, we should be thanking Aaron Mazzrillo. He's pretty active on BP. I think his podcast is one of my favorites if not my favorite.
We have always used our own agreements except when purchasing through an agent. Then, we end up hacking the crap out of their standard agreement and adding an addendum. Since we are cash buyers, there is rarely a problem.
The wording for our agreements comes from an attorney licensed to practice in that state. They are responsible for approving the text and keeping it up to date and compliant with the law.
For generating the agreements, we use a document assembly program called RediDraft. With a few mouse clicks and a simple form to enter the data out pops a word document we can then print, convert to pdf to email or fax to the seller. It is easy for the lawyers because all they have to do to keep it updated is edit a Microsoft Word document and send it back into the system.
We also have a variation of the agreement we use when selling. So, when we get an offer from someone out there using their own form, we always counter with ours.
Do title companies ever have purchase and sale agreements for use?
Or do real estate lawyers have such documents?
The last FSBO deal I did, I just paid an agent $1000 to use their MLS PSA documents. But in the future I'd like to create my own, or use something more "free." So besides the obvious of using an agent to do the paperwork, what's the next "easiest" and least costly PSA? How technical and specific does the verbiage have to be? Probably on a different thread, I'll look up that topic next.....
If I am representing a client I use forms provided through MLS (NWMLS/CBA in WA) otherwise, I will just create my own on microsoft word and PDF it.
Hello there! reading this years later (haha). As far as forms, I'm a CA agent and assuming those wouldn't work in WA (I'm from around there and looking to by a FSBO out in the boonies).
Do you happen to know if CAR would provide a default form? Or, if you were attempting to buy in a another state, how might you go about it?
Hi @Alice K. - I am not sure what a CAR is; however, if I were a broker from out of town, I would reach out to a local broker and get some of their (blank) forms, and just fill them out myself. I am going to follow-up with a message to you. Zach