FSBO Disclosure Standards and Typical Process

Condition of Property and Required Disclosures

In California, real estate transactions are required to have certain disclosures.  See e.g., California Civil Code section 1102 (“disclose any fact materially affecting the value and desirability of the property, including, but not limited to, the physical conditions of the property”). The best rule of thumb is that the seller should put themselves in the shoes of the buyer, and therefore disclose any facts that they would want to know themselves if they were purchasing the property.

Some disclosures are included in the purchase contract, but most disclosures are not included in the contract or even attached to the contract.  Rather, most disclosures are simply provided sufficiently in advance of close of escrow (the standard contract gives the seller 7-days after the contract is signed to provide the disclosures; but most sellers like to provide disclosures at the time of signing the contract).

Generally, the most important disclosures needed from the Seller are the ones relating to the physical condition of the property.  In California, this is the 3-page Real Estate Transfer Disclosure Statement (TDS) and the 4-page Seller Property Questionnaire (SPQ).

Risk & Responsibility

It is important for every buyer to understand that they take on both risk and responsibility when purchasing property.  Generally there are no guarantees in property sales, which is why it is standard practice for buyers to conduct thorough property inspections with the help of certified home inspectors, termite inspectors, and sometimes more (i.e., roof inspectors).  Yelp.com is a good source for finding inspectors.  Inspection reports become an official part of the disclosures made by the parties in order to finalize the purchase/sale.

With that said, sellers must remember that they have an affirmative duty to disclose certain material facts about the property condition within the seller’s knowledge, such as any hidden dangers of which the seller has been made aware (i.e., cracks in the property foundation, mold in the attic, a leaky dishwasher, a drug dealing neighbor, a potential dispute about the fence line).  A seller who has information about such a problem (either through personal discovery, the disclosure of a previous owner, or by the report of a professional) must disclose the material facts.  Making disclosure of information learned from a property inspection is as simple as providing the buyer a copy of the inspector’s report.

A seller who is unaware of an issue or problem has no duty to disclose the problem.  The exception to this rule is that the seller will still be held to a ‘reasonable person’ standard; so if a reasonable person in the seller’s circumstances would have been aware of the issue (i.e., faulty wiring causes the lights to flicker on and off every 45-minutes or so), then a seller who lived in the house for even one week would have a difficult time trying to claim they did not know about the problem.

If the seller fails to disclose a problem, the buyer has many legal remedies. This area of the law is called ‘real estate nondisclosure litigation’.

As-Is Sale

Every Property in California is sold “as is” unless the parties specify otherwise in the contract itself.   Therefore, if the parties want the Seller to make any changes or repairs to the Property before the sale closes, then they will need to specify exactly what should be done in the contract (either in the original contract or by addendum). There are only a handful of minor exceptions to this rule, such as the Seller’s obligation to strap the water heater, and the Seller’s obligation to provide carbon monoxide detectors.

Key point: Just because the sale is “as is”, this does not trump the law that requires a seller to disclose material facts about the property condition and history.  In other words, sellers must always disclose material facts about the property, even when the sale is as-is.

For more information on disclosures, here is my post California Home Sale – Required & Standard Disclosures.

Greg Glaser, Attorney at Law
San Francisco Bay Area – Northern California
(925) 642-6651 — greg@gregglaser.com
Flat Fee Packages Available for Buyers and Sellers Without a Realtor


The California FSBO market in Spring 2018

It is currently a seller’s market in California.

Sellers only have one house to sell, so technically they only need one buyer willing to pay the price they desire.  However, statistically the most effective way to realize the full market value of a home is to list that home on the MLS and receive multiple offers.  (Listing as a FSBO requires the services of a flat fee MLS listing company — see my article here for details).   Then with multiple offers in hand, a seller can confidently navigate a counteroffer process to allow buyers to compete for what they feel is the home’s true market value (the price a buyer is actually willing to pay after competing for the home with other potential buyers).

I’m writing this post in February 2018 (on the cusp of Spring while we’re seeing lots of early listings, especially from sellers anticipating market fluctuations in 2018), and California is still experiencing a massive real estate bubble (especially in the Bay Area).   While buyers can still find some deflated prices in the countryside, for the most part our State is experiencing highly inflated home prices. To understand why this bubble has not yet popped in 2018 (even though multiple economic indicators have been pointing to a pop since at least 2015), you can look primarily to income.  It is the classic bellwether.  As long as most homeowners continue to enjoy strong personal income (from their jobs), then they continue paying their mortgages and continue buying houses.  But once income starts dropping (due to unemployment or recession), then the many economic indicators that already point toward a downward adjustment become primed for realization. We saw the same economic indicators and phenomenon in the California housing market circa 2008-2010, which the film The Big Short explained.

You see, around 2006 several top economists predicted the American housing bubble would pop any moment, but for some reason it didn’t pop for a couple years (until circa 2008).  The reason is complex, but it was basically ‘income‘ that propped it up.  When people have high income, they pay the mortgage and buy houses, even at irrational prices and high interest rates.  But when people don’t have high income, they start walking away from their mortgages (especially high interest mortgages).  And once a housing market reaches a tipping point of approximately 6% of people walking away from their mortgages, then the housing market becomes flooded with low-price homes and a shortage of new buyers.  That combination creates a cascade effect that drops home values for everyone (yes, your home too), with many homes (especially in cities and suburbs) dropping upwards of 40% to 80%, or more.  That’s what appears to be on the horizon circa 2018.  So if you are buying California real estate right now, then it is probably more honest/accurate to say that you are investing in California income levels, because that is what is really sustaining this bubble.  Once income drops, so too will home prices, according to precedent (especially 2008).

An insightful and humorous economics documentary that explains this pattern is called Boom Bust Boom.  It’s pretty popular on Netflix – it was produced by one of the Monty Python guys.  The main economic theory featured in the film comes from a deceased economist named Hyman Minsky, who argued that ‘stability leads to instability’ in the context of the accumulation of private debt — I know, that sounds boring — let me try to explain in a more interesting way… Minsky argued that as our memory of past financial crises fade (i.e., we forget/ignore the lessons of 2008), then the pressure to deregulate and relax credit standards leads to the gradual reappearance of instability, not as a result of interference with the market but purely as a result of fallible human decision-making (that’s what is happening in 2018, as people have been buying homes since 2014 that they can barely afford).

Minsky believed government had an important role in limiting speculation. And yet, markets need uncertainty to be able to function properly (rather than government regulation) — that’s an important thing Minsky said, because he was pointing out the Catch-22.  Do you see it?  Trying to take away uncertainty with forward guidance and trillions of dollars just leads to uncertainty, so it is a move that cannot be predicted by regulation. Markets are populated with people, and if you try to take uncertainty out of people’s individual lives, there’s no telling what they’ll do, other than it’s probable they’ll increase the risks they take. And why not, if they think nothing can happen to them? It’s a matter of risk assessment.  So, uncertainty happens regardless of government intervention.

And in the end, the bubble pops, for that is the very nature of a bubble… pop.

Presale Inspections for California Home Buyers

It is customary for a home buyer to spend approximately $600 for inspections prior to purchasing a home (this happens during the escrow period, usually in the first 17-days after signing a home purchase contract). Even when the Seller provides a copy of a recent inspection report, most buyers like to hire their own independent inspection companies.

The two most common inspections (that most buyers perform) are not required by law. Here they are:

(A) General Home Inspection – This is often just called a Home Inspection. The average cost is between $350 and $600. A contractor visits the home for approximately 2-5 hours, inspects everything (except the roof and crawl spaces unless the buyer specifically requests), and takes lots of photos. Within approximately 48 hours, the contractor will email an approximately 30-page inspection report to the buyer.

  1. Tip 1: The best home inspectors are often retired general contractors who no longer build homes (often because of knee or back pain). These guys know the building codes very well, and their practical experience makes them well suited to explaining things to buyers (even giving casual estimates verbally for what it would cost to fix certain issues).  Most inspection contractors will return your phone call within 24-hours and be able to schedule an appointment to inspect the home within 72-hours.
  2. Tip 2: To find a reliable home inspection company near you, I recommend using Yelp.com (in the search section of Yelp, type ‘home inspection’ and the name of your town, county, or area). Generally, the companies that offer a combined report (Home Inspection + Termite Inspection) are not the best choice because their inspectors are not always thorough.  The best companies are usually sole proprietor businesses operated by just one man, the experienced contractor who will be performing the inspection.

(B) Wood Destroying Organisms and Pest Report – This is often called a Termite Inspection, even though the inspector looks for anything that destroys wood (i.e., termites, mold, dry rot). The average cost is $175. To find a reliable pest inspection company near you, I recommend using Yelp.com (in the search section of Yelp, type ‘termite inspection’ and the name of your town, county or area).

  1. Tip 1: Choose a contractor that regularly performs termite inspections for home sales.  It should be the primary business of the contractor – performing termite inspections.
  2. Tip 2: The Inspection Report will categorize issues (i.e., termite damage) into two categories: Section 1 and Section 2. Section 1 means the inspector recommends the issue should be repaired promptly (within a month or year or so) because it is a safety hazard or otherwise will cause continuing damage to the home if not repaired promptly. Section 2 refers to issues that are not urgent (they are recommended for repair basically anytime in the future). Most home sales are “as-is”, so the Buyer is responsible for any repairs if they choose to purchase the home (or the buyer can cancel based on an inspection contingency). Sometimes the parties will negotiate to perform repairs prior to close of escrow, or more commonly negotiate for the Seller to give Buyer a $ credit to perform some/all of the repair work after close of escrow.
  3. Tip 3: For FHA loans and VA loans, the lender requires that Section 1 work be completed before close of escrow (and sometimes (though rarely) section 2 work also). If the buyer cannot afford to pay for the lender’s requested repairs, then often the buyer will ask the seller to pay for the repairs. If the seller declines (which the seller is free to do, because all sales are as-is unless agreed otherwise in writing), then the Buyer usually cancels the contract for a full refund during the buyer’s inspection contingency period (i.e. 17-days after signing the contract).

Inspections/Reports Required by Law

The only inspections/reports required by law are when the home is in a City or County that requires a special presale inspection/report.  These are usually minor things, and easy to accomplish.  Most cities and counties in California do not require presale inspections or reports. But here are some examples of cities that do:

  • San Francisco:
    • 3R report – this is a report ordered online (seller pays $150) that shows the property’s building permit history
    • Water & Energy Inspection – this is an inspection where a special licensed inspector visits the property and checks for things like low-flow toilets. If the property is not in full compliance, the inspector will not certify the sale (but will offer to complete the repairs/upgrades immediately), so typically the seller will pay to bring the property into compliance. In my experience, most homes & condos pass the inspection, and any required repairs are usually under $500 and handled very quickly during the escrow period.  At the conclusion of this inspection, the inspector files a RECO compliance report with the City of San Francisco.
  • Oakland: Lots of homes in Oakland are within a water district called EBMUD, where the seller is required to hire a special contractor to inspect the sewer lateral. If the sewer lateral is damaged, it needs to be fixed prior to the close of escrow, and typically the seller pays for it.  In the old days, these inspections and repairs were more expensive, but today with remote cameras and trenchless sewer lateral repairs, costs are pretty reasonable.  Notably, homes with a recent certification of compliance are exempt from this ordinance.
  • Berkeley: In addition to sewer lateral inspections, Berkeley has a RECO program for energy conservation inspections.
  • San Jose:
    • Within the Natural Hazard Zone Disclosure Report, the Seller must complete a form for trees in the front yard. This is technically a disclosure rather than an inspection or report, but I wanted to highlight it as an example because it shows that each city is unique and nuanced, and so it helps to work with a professional (like myself) if you are considering FSBO.
  • Mill Valley: This city has a presale inspection that requires sign-off by the public works department
  • Northern & Southern California – several other cities in both Northern and Southern California require presale inspections. Call me with questions for a free consultation: 925-642-6651.

Greg Glaser, Attorney at Law
San Francisco Bay Area – Northern California
(925) 642-6651 — greg@gregglaser.com
Flat Fee Packages Available for Buyers and Sellers Without a Realtor

Logistics of Buying And Selling Real Estate Without A Realtor

With an attorney to assist you (rather than a real estate agent), buying or selling your home is actually quite simple and straightforward.  Here is a typical breakdown of the logistics & responsibilities, showing that most of the tasks are handled by the attorney, escrow, and lender:






· Prepares the purchase agreement

· Answers all questions and guides the transaction

· Provides all necessary disclosure forms

· Reviews all documents

· Coordinates with all parties

· Lists the home for sale (here’s how, it’s easy)

· Shows the home to potential buyers (here’s how, it’s easy)

· Provides info about the property on disclosure forms and closing documents (it’s easy; your attorney helps you)

· Tours the home

· Hires any inspection contractors (it’s easy, most people use Yelp)

· Provides requested information to the lender (it’s easy)

· Reviews disclosure forms and closing documents (it’s easy; your attorney helps you)

· Provides title report

· Handles all funds

· Answers questions

· Provides closing documents

· Files and records all necessary documents

· Provides loan documents

· Answers questions

Greg Glaser, Attorney at Law
San Francisco Bay Area – Northern California
(925) 642-6651 — greg@gregglaser.com
Flat Fee Packages Available for Buyers and Sellers Without a Realtor

Understanding the Legalese in a Real Estate Purchase/Sale Agreement

As a real estate attorney, I help home buyers & sellers daily with their transactions, and I’m often asked to explain all that legalese in the standard purchase/sale contract::

  • As Is Sale – This means the Buyer is purchasing the Property in its current condition, whether that condition is damaged or pristine or anything else.  In other words, the Seller does not have a duty to fix anything before close of escrow or after close of escrow, unless the Seller expressly agrees in writing to fix something.  Technically, every sale is ‘as-is’ unless the contract specifies in writing otherwise.
    • Note 1: Even with an ‘as-is’ sale, the seller is required to provide written disclosures of material defects and relevant property history.  Here’s a tip for sellers: if you’re unsure whether something is ‘material/relevant’, you should disclose it, because anything you disclose cannot later be used against you in the event your buyer wishes to make a case for non-disclosure of material facts. Disclosure is your friend – it’s win-win.
    • Note 2:  Buyers still do inspections and keep inspection contingencies for ‘as-is’ sales.  Indeed, if the inspection uncovers serious issues (i.e., major termite damage), then often the buyer will request a contract amendment that gives the buyer a price reduction (or $ credit) to help the buyer pay for the needed repairs after close of escrow.  However, the seller is not required legally or contractually to agree to do repairs, and the buyer is also not required to close escrow (i.e., the buyer always has an inspection contingency to cancel unless they have already waived it), so the parties simply negotiate some form of arrangement if they would still like to continue with the purchase/sale.
    • Note 3: Technically ‘As-Is’ refers to the point in time when the buyer signed the contract for purchase.  So if the property was clean and the ceiling had no holes when the buyer signed the contract, then the seller needs to make sure the property is clean and the ceiling has no holes on the date for close of escrow.
  • Closing Costs – These are the costs or expenses that are typically associated with finalizing a real property sale.  They generally include escrow fees, title insurance, County transfer taxes, HOA fees, home warranty insurance, and home inspection costs.  They are itemized on a ‘estimated statement’ provided by escrow at the conclusion of escrow.
    • Note: You can ask escrow to provide you an estimated statement before you begin an escrow process. It helps you shop around for the best deal among escrow companies.
  • Contingency or Contingent – This means “it depends upon.”  The word is used in a legal sense to describe a ‘necessary event’ or ‘deciding event’ in the purchase/sale agreement, such as the buyer receiving loan approval from the buyer’s lender to go forward with the sale.   A contingency is typically used to benefit one party – for example, an inspection contingency benefits the buyer because it gives the buyer freedom – if the buyer exercises his contingency, then the agreement is terminated, he receives a refund of his deposit, and escrow is cancelled.
    • Note 1: The customary contract contingencies for home sales are (a) 17-days for inspections & other investigation such as title history, (b) 17-days for an appraisal matching the purchase price, and (c) 21-days for loan approval from the buyer’s lender.  In the typical contract, the buyer is free to cancel before expiration of any of his contingencies, and he receives a full refund of his initial deposit.
    • Note 2: the standard contract is not harsh or strict.  It automatically extends from day-to-day the contingency time periods (i.e., extending beyond the 21-days for loan approval) until the seller actively gives the buyer a written “Notice to Perform” document that requires the buyer to either release the contingency promptly or cancel the contract.  The reason for this leniency is simple: the standard contract encourages negotiation that can salvage transactions; it does not force a buyer’s hand to cancel, unless the seller actively wants to force the buyer to decide immediately whether to cancel or go forward.
  • Deed – The deed is the official record of who owns the property, and the original copy is held by the owner.  It is usually 1-3 pages long, and a copy is recorded at the County where the property is located.  Deeds are usually prepared by an escrow company.  There are multiple forms of deeds, but in real estate sales the customary deed is called a “grant deed”.  The deed specifies the manner in which the Buyer owns the Property, such as “Community Property,” or “Individually, as her Separate Property”, or “As Trustee for the Marshall Family Living Trust.”
    • Grant Deed – A grant deed contains the Seller’s promise that he (1) has not conveyed the same property (or any right, title or interest in the property) to any person other than the Buyer; and (2) the Property is presently free from encumbrances not otherwise disclosed by the Buyer.  This is the standard deed used for California home sales.
    • Quitclaim Deed – transfers to the buyer whatever rights and interests the seller has in the property.  When the seller is married but owns the property as his sole property, then title companies often ask the spouse to sign a quitclaim deed.
    • Warranty Deed  – These are the same as a grant deed, but contain the following additional promise by the Seller:  if any 3rd party later claims an interest in the Property relating to an encumbrance not previously disclosed by Seller, then the Seller will hire and pay an attorney for the Buyer in order to defend the title.   Warranty deeds are not very common in California, simply because grant deeds are so effective.
  • Down Payment – Not to be confused with the Initial Deposit (see definition above), the down payment is the money that the Buyer pays from Buyer’s own bank account (out-of-pocket) for the property at close of escrow.  The downpayment is the purchase price plus Buyer closing costs, minus the loan amount and minus the initial deposit.
  • Encumbrance – An encumbrance is a legal right or obligation attached to the property.  An example of an encumbrance is an easement.  Essentially, an encumbrance occurs whenever somebody (other than the property owner) legitimately claims some right in the land.  For example, if the property owner takes out a mortgage, then the lender will have a deed of trust on the land.  The deed of trust is an encumbrance.  Another example — if the utility company has a right to run telephone wires over the land, it would be an easement, which is an encumbrance.  Virtually all properties on the market have encumbrances.
  • Financing – Financing is money (or the process of obtaining money) from a lender, typically a bank.
    • Note: the term ‘seller financing’ refers to the process by which the seller acts like a bank to the buyer.
  • Initial Deposit This is also called “earnest money.” It is the amount the Buyer must pay at the signing of the agreement in order to begin the escrow process.  It goes toward (offsets) the purchase price.   This money will be refunded if the sale does not go through, assuming the buyer cancels within a contingency period.
    • Note: The initial deposit is usually 1% of the purchase price. In a seller’s market, where there are lots of potential buyers competing, sometimes this number is 3% or higher. Approximately 1-3 days after both parties sign the purchase contract, the buyer gives the initial deposit to the escrow company (by check or electronic funds transfer) for safe-keeping. This money counts toward a buyer’s home purchase (so for example on a $500,000 home purchase, after the buyer makes his initial deposit of $5,000, the remaining sum due at close of escrow is $495,000 at close of escrow).
  • Joint escrow instructions – These are written instructions that appear in the purchase agreement, and also the escrow company will have their own separate instructions.  They are essentially boilerplate written directions specifying how the escrow company will process and complete the sale for the parties.
  • Parties – This refers to the buyer and seller.
  • Personal PropertyThis is movable property that does not automatically get sold with the house.  For example, the bed in the master bedroom is personal property that the seller will take with them when they move-out.
    • Note: it is customary in home sales to include some items of personal property in the sale (i.e., appliances (stove, fridge, and/or washer & dryer), cans of paint in the garage, outdoor fountain).  Often the parties will only list the big items (i.e., appliances), and then they just verbally figure it out between themselves.
  • Preliminary Title Report –  In the typical transaction, the buyer obtains a preliminary title report from the escrow company, which will specify who owns the property, and whether there are any liens (mortgages), easements, or other restrictions (encumbrances) limiting anybody’s use and/or ownership of the Property.  It is a very helpful document because it shows the title history, including the seller’s current mortgage that will be paid off at close of escrow.  A preliminary title report is not an insurance policy.  It is what comes before an insurance policy is issued.  In a legal sense it is only an offer by the title insurer to issue a policy of title insurance, and may not contain every item affecting title.  At close of escrow, the preliminary title report is turned into an insurance policy, which means the title company is guaranteeing that the information on the document accurately reflects the title history of public records.  So if the title company made a mistake in checking the public records, then the title company will pay money and lawyers to fix it.
  • Property Accessories – Little things that are attached or that come with the land or home, such as the curtain rods and curtains, and the garage door remote control.  Compare Property Improvements (below).
  • Property Fixtures –  This is a legal term for things that are physically attached to the property and which cannot be removed from the property without damaging the property in some way (or basically requiring a handyman/contractor to remove).  Examples include:  ceiling fans, wall light switch coverings, built-in microwave.
  • Property Improvements – These are large things attached to the land or home.   For example, the home is an improvement on the land.  And the refrigerator is an improvement on the home.  Compare Property Accessories (above).
  • Purchase Price – this is the price of the Property agreed upon by the Buyer and Seller, excluding any closing costs).
    • Note: Most people choose the ‘market value’ as the purchase price (note that the purchase price does not include closing costs). Market value is considered the amount that a reasonable seller is willing to accept and that a reasonable buyer is willing to pay for the home. Historically and today, reasonableness is most primarily measured by ‘comparable sales’.

Greg Glaser, Attorney at Law
San Francisco Bay Area – Northern California
(925) 642-6651 — greg@gregglaser.com
Flat Fee Packages Available for Buyers and Sellers Without a Realtor

Listing a FSBO on the MLS

To list your home on the MLS, you’ll need the services of a flat-fee MLS listing service.

But before you go forth and google just any ‘flat fee MLS website’, please understand that not all of them are created equal. It is important to choose wisely — do yourself a favor, do not try to save a few bucks by choosing the cheapest site for $149 or whatever it is.

Currently, I recommend the Gold Package from USRealty.com to my clients — and no, I have not been paid by USRealty.com to recommend their company. I have no personal or financial relationship whatsoever with USRealty.com. Rather, I’ve just been handling FSBOs for years and so I’ve worked with lots of different flat-fee MLS sites – in that process I’ve found USRealty.com (formerly Housepad.com) is the best one out there to meet my clients’ needs.

Basically, here are the things you need to know as a home seller to select the right flat-fee MLS agent:

  1. MLS Listing. Make sure you choose a package that actually puts your listing on the MLS. I know, this should be obvious right?! But often the cheapest package from an ‘MLS listing site’ will not actually list your property on the MLS, but rather will simply list it on miscellaneous real estate websites like Yahoo Real Estate, which you could easily do yourself.
  2. Automated Phone. When potential buyers call to inquire about your home, do the phone calls go directly to you as the seller, or do they go directly to the MLS agent’s office? Trust me, you want calls to go directly to you as the seller. So, sellers should make sure the MLS listing service offers call-forwarding or an automated phone message so that phone calls go directly to the seller. You do not want your flat-fee agent to be a middleman, because then the idea of a ‘dropped call’ will take on a whole new meaning to you. Indeed, you won’t even know if calls are being dropped; you’ll just be in the dark communicating with your middleman who is probably trying to upsell you regularly (see item 4 below on upselling).
  3. Commission. Some MLS listing sites will not allow the seller to list a commission offered to a buyer’s agent. This is not good for sellers trying to attract buyers – it is like telling agents to ignore your listing because they might not get paid. Unfortunately, there are some flat-fee MLS sites that do not tell you they created this limitation until after you’ve signed up – and then they will only fix their own limitation if you agree to pay them a commission. What a racket!Side Note to FSBO sellers: please do not offer buyer’s agents less than a 2.5% commission. In an MLS listing, the seller should always offer a 3% or 2.5% commission to a buyer’s agent. Do not offer more, and do not offer less. Anything lower than 2.5% looks weird/bad, and is the equivalent of the seller intentionally shooting himself in the foot – the seller might as well put a caged skunk on his front porch during an open house to scare away agents. Sure, a seller is free to do it, but would you care to guess what the expected response will be?
  1. Upsell. Some MLS listing sites are mere middlemen who refer sellers to local real estate agents who then try to upsell their services for a commission. It’s ridiculous! I’ve seen ‘flat-fee’ agents offer ambiguous contracts to try to trick sellers into agreeing to a seller’s agent commission. The cheaper the site, generally the more likely they are to try to upsell people. Again, what a racket!

Fortunately, USRealty.com passes all of my tests above for quality & integrity, which is why I recommend them to my clients: MLS listing, automated phone, buyer’s agent commission stated; and a clear MLS listing contract that does not try to upsell clients.

One caveat is that some FSBO sellers like to list an open house, but they might not be able to do so with USRealty.com.  Rather, for a flat-fee MLS company in California that allows you to list an open house and still meets my four criteria above, I recommend flatfeegroup.com

As an experienced FSBO lawyer, I want to see the customer-service model succeed because I think it should set an industry standard for MLS listing companies nationwide.

Greg Glaser, Attorney at Law
San Francisco Bay Area – Northern California
(925) 642-6651 — greg@gregglaser.com
Flat Fee Packages Available for Buyers and Sellers Without a Realtor

Landlord-Tenant Home Sales

I routinely help landlords and tenants process their purchase-sale transaction with no realtors and no commissions. The process is very straightforward.

Here are some of the typical FAQs for the landlord & tenant home sale:

Question: Do we need to amend or cancel the lease?

Answer: No, the purchase contract is separate from the lease and need not be altered in any way. The lease will terminate automatically at close of escrow (the legal reason for this is the doctrine of ‘merger’). And of course, if the Buyer decides to cancel the purchase contract for any reason before close of escrow, the lease continues to remain in full force and effect.

Question: What should we do about the security deposit?

Answer: In about 90% of landlord-tenant transactions, the Seller/Landlord will authorize escrow to credit the Buyer/Tenant in escrow for a full security deposit refund at close of escrow. Obviously, this has the practical effect of reducing the Buyer’s purchase price (or closing costs) by the amount of the security deposit.  In a minority of transactions, the security deposit is handled outside of escrow — for example, if the Seller is doing a 1031-exchange, then it’s a good idea for accounting reasons to process the refund outside escrow, and then the landlord (in California for example) will simply refund the security deposit no later than 21-days after close of escrow.

Question: Can the Tenant help the Landlord complete the disclosure forms?

Answer: Yes, that is very common for the Tenant to provide some input on the disclosure forms. The reason for this is obvious – the tenant is currently living in the property and therefore has current knowledge of the property’s current condition. Disclosures are often a cooperative process, so that’s nice.

Question: Does the tenant need to do a contractor’s home inspection or pest inspection?

Answer: No, those inspections are not required by law. But from a practical perspective, the lender for the Buyer/Tenant may want to see an inspection report, and especially so if the appraiser highlights serious issues (i.e., roof missing shingles) during the appraisal.

Greg Glaser, Attorney at Law
San Francisco Bay Area – Northern California
(925) 642-6651 — greg@gregglaser.com
Flat Fee Packages Available for Buyers and Sellers Without a Realtor