When is it safe to sell your California real estate without a realtor? For example, your longtime renter might approach you about buying the rental. Or, a business associate, acquaintance, or friend might offer to purchase your land or commercial building. You might be tempted skip the realtor’s office and head straight to the escrow office, cash in hand. Wouldn’t your be saving the typical 5-10% sales commission, perhaps worth tens of thousands of dollars? But, “seller beware!” There are risks to selling your California real estate without representation.
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The primary disadvantage of cutting out professional representation from a real estate transaction is lack of access to proper contract and disclosure forms. Almost all California Realtors have access to standardized transaction forms provided by the California Association of Realtors (C.A.R.). These forms cover most types of transactions and are almost worth the commission you would pay a C.A.R. member Realtor. And without a proper contract in place, you could run into trouble. For example:
- Your deal might not be enforceable because it is not in writing
- Your contract could be void due to a drafting error or mistake
- Your property could be tied up in escrow indefinitely due to vaguely worded conditions
- You might not address critical details such as closing costs, deposits, timing, inspections, arbitration, rights after a breach, and the condition and title of the property.
Even worse, without representation, you risk a future law suit based on lack of disclosure if your buyer regrets the deal after it closes. The risk from lack of disclosure is even present if you sell your property “AS IS.” The ancient maxim caveat emptor (“let the buyer beware”) has little or no application to California real estate transactions; and an “as is” clause will not protect you from the consequences of failing to disclose anything about your property that would affect your buyer’s decision to buy. Plus, California Statutes require disclosure of many things you would likely never think of. Here are just a few examples of things you may have to provide to the buyer of your residential property:
- A list of defects you know about the property
- Transfer Disclosure Statement
- Natural Hazard Disclosure Statement
- Earthquake Safety Guide
- Lead Guide
- Environmental Guide
- HERS Guide
- Advisability of Title Insurance
- Carbon Monoxide Detector Compliance
- Smoke Detector Disclosure & Compliance
The list goes on and on. For more comprehensive discussions of seller disclosures in California, click here and here. Even sellers of estate, trust, or commercial property must provide many of the disclosures. And, California real estate disclosure rules change every year.
California disclosure law has become so complex that your chances of providing all the required disclosures is very low without professional representation. If you didn’t use a Realtor to market your property, then you should probably consult with a reputable real estate attorney before you ink your deal. Many real estate attorneys will draft the contract, manage the disclosures, and even guide you through escrow and closing for a fee far less than the standard real estate commission. Selling real estate without a Realtor in California is safe, as long as you review your deal with a qualified real estate attorney.
David J. Collier practices law in Sonoma County in the areas of Real Estate, Wills, Trusts, and Probate. David is responsible for the content of this ADVERTISEMENT. The information in this article is not legal advice. To obtain legal advice you must discuss your unique circumstances with an attorney.