Should I Use A Standard Listing Agreement Or Have Your Firm Prepare A Document For My Transaction?
The purchase document is different from the listing agreement. So you have to be careful not to confuse those two but if you are talking about a listing agreement with a real estate agent or a brokerage firm, typically those are not drafted by attorneys. Typically those are forms that are used by the brokerage agency and by the broker and provided to the prospective seller of the property. Now, having said that, even though they are typically not drafted by an attorney, they should be reviewed by an attorney before they are signed and most of the time, they are not. Most of the time, the people will go to the realtor or to the real estate company and they like the realtor that’s going to handle it and they like the broker that has been referred and then they sign off on a listing agreement.
Then, what happens is that if the property is not sold timely or if the real estate agent that’s handling the matter or the broker that’s actually handling the matter is not able to sell it and maybe they haven’t taken a proper look at the market but really, market conditions have changed and they haven’t discussed with the client on an appropriate shift in price, then the client all of a sudden goes ahead and says, I am going to change realtors and the realtor that has the listing agreement says no. You’ve signed to have this listing agreement exclusively with us for X amount of days and then, the party goes to the lawyer and the lawyer says, that if you had me look at it, then I could have explained it to you.
Even though you trust this person, you may want to have a listing agreement for a shorter period of time and then, if you still like the realtor or the broker then that time is going to terminate or be exhausted and then, you can always sign another listing agreement but if you don’t have an attorney looking at that and looking at the terms that the listing agreement puts in then those are a lot of times binding unless they are conscionable for some reason which is tough to prove that contracts are unconscionable in the state of Florida. You can do it in certain circumstances but it’s tough. So it’s my advice not to have an attorney draft those but to review those prior to signing.
What Happens At The Closing Of A Real Estate Transaction?
If you take it at its barest level, what happens at a closing is that there is payment that is made and if it’s been made prior, it’s being held in escrow or it should be held in escrow either by a real estate company, a title company or an attorney and have that in their escrow which they have certain legal obligations to keep that money separated from any kind of operating or sending account. So if there is going to be an exchange of money and then there is going to be an exchange of the ownership in property which is done via a deed and sometimes deeds are held in escrow too. In other words, the seller will execute the deed prior to receiving the money and provide it to the attorney or title company and that deed is held in escrow and is not recorded. Florida is a recording state so the deeds don’t take legal effect unless they are recorded.
There are certain exceptions that can be argued on that but typically it has to be recorded to be valid and so then, the closing agent has to hold that in escrow until they are certain that the funds are there and they’ve cleared and can be distributed. The other things that happen at the closing are that you have the HUD statement on residential and a lot of times HUD statements are used in commercial as well even though they are not required as they are in residential. Basically, it has a breakdown of what the costs are for the seller, what the costs are for the buyer, it has what the costs are for releasing any kind of liens or encumbrances and then, you have the bottom line for what the purchaser has to pay and for the proceeds that are going to the seller and the difference is the dollar amounts that get paid to the real estate agent, the attorney’s fees, the recording fee for the clerk, payoffs of any mortgages, taxes, any other liens or encumbrances, HOA & condo association fees.
With the closing, you have to make sure that those involved have been taken care of too. You certainly cannot get title insurance unless you have taken care of those items and made sure that those are going to be paid off and you have money that has been accounted for and set aside from the monies that the buyer has provided to purchase to pay off those items or if the seller has agreed to pay, that those go into the seller’s item and they don’t get as much money for the sale of the property as they would because they are obligated to pay for a certain encumbrance to be released. So, basically, it’s a transfer of money, it’s a transfer of ownership and then, it’s also to a basic final check and analysis that all encumbrances have been taken care of so there can be the clean title that is transferred to an owner. That’s typically how a closing works.
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