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DON’T BANK ON IT!

16 Jan

Metro®Boston, Publication Date: January 11, 2012
By Attorney George Warshaw

Imagine. You just sold your house or got a big payday on your job.

You have a check in hand for “real money.” You deposit it at your bank – but then you find out, days after you made your deposit, that you can’t access your money for at least 10 business days!

OMG!

You go back to the bank and yell and scream. If you had known, you would have asked for a bank check from your sale or big payday and deposited it instead.

“Sorry, it wouldn’t have mattered,” you’re told. “Even bank checks have to clear. They’re not the same as cash or a wire transfer.”

If your funds were hung up in the banking system and you needed them to buy a house the next day, where would you be? In default!!!

That’s where your bank matters.

At least one major bank treats any check over $5,000 as a large deposit and takes up to ten business days to clear it – unless, of course, you’re an important client.

And some investment or mutual fund companies take 4 business days to clear checks.

So ask about clear periods before depositing large checks.

Or better yet, have your funds sent by wire transfer. It’s treated as cash as soon as it arrives at your bank.

Next week: Important changes in probate procedures may affect your will.

(c) 2012 George Warshaw.

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FSBO – For Sale By Owner

16 Nov

Metro®Boston, Publication Date: November 15, 2011
By AttorneyGeorge Warshaw

It’s tempting, very tempting.

Sell your home yourself and save the broker’s commission. But is it a false savings?

While people often underestimate the value of a good realtor, nonetheless, some homeowners have sold their homes successfully.

There are two parts of the FSBO process: marketing and legal.

Marketing involves finding a buyer and enticing your buyer to make an offer. Legal is about what’s needed to complete the sale.

MARKETING. You have to know how to price your home. Pricing requires research, time, and going to open houses. That can give you a false sense of price if you only look at properties that haven’t sold; i.e. they’re priced too high.

You may list your property on FSBO websites, Craig’s List, etc., but you’ve limited your market.

No broker is going to bring a client to see a FSBO and many potential buyers are leery of FSBO sales.

Try another approach! Don’t try to save all the commission, just try to save half.

Act as your own real estate agent. Hold an open house. Send out announcements to local brokerages that you’ll cooperate with brokers and pay a buyer’s broker fee of xx%. 

It may be a smart “savings” compromise.

Next week read the legal components of a FSBO.

© 2011 George Warshaw. All Right Reserved.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.  

Legal Advice: Laws, and court decisionsinterpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neitherintended as legal advice nor shall establish an attorney-client relationship.

Before making any legal decision, consult an attorney to see how the foregoing may apply to your circumstances.

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How to Sell Then Buy a New Home

13 Nov

Metro®Boston, Publication Date: November 8, 2011
By AttorneyGeorge Warshaw

Many real estate attorneys have seen a sharp increase in new purchases these last four weeks. While none of us expect a housing miracle, it’s a good idea to review one simple, basic tenet for those selling their homes or condos and then buying a replacement property.

The most important advice I give clients is, “don’t do it all on the same day.” There’s too much that can go wrong. A delay in your sale could seriously jeopardize your purchase.

There are many things that often happen right before the closing that one extra day can fix. What would you do if a last minute repair is needed, the house isn’t broom clean, a lien is discovered, or the movers
don’t show up – and your buyers refuse to close?

Or as I have more recently experienced, the bank is too busy to get the loan documents to the closing attorney on the day of the closing. Believe it not, it has been happening.

Quite simply, you need to build in a margin for error.

So “sell on one day and buy on the next.” Leave the furniture on the truck overnight if you can. You’ll avoid an elevated heart rate!

© 2011 George Warshaw. All Right Reserved.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.  

Legal Advice: Laws, and court decisionsinterpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neitherintended as legal advice nor shall establish an attorney-client relationship.

Before making any legal decision, consult an attorney to see how the foregoing may apply to your circumstances.

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Would You Like Your Name in the News?

2 Nov

Metro®Boston, Publication Date: November 2, 2011
Expanded content

Lost in this age of the internet is almost any hope of privacy and confidentiality.

I suppose if I won the lottery I wouldn’t mind my name appearing all over the
Boston Globe or the Herald; but I wouldn’t want my name publicized if it came
from the police blotter – or a new home that I bought.

Buy a home, and your neighbors, relatives and fellow employees can read about it in the newspapers. Want them to know how much you paid and the details of your mortgage, you don’t have to say a word. They’ll know in a New York minute!

Real estate transactions are published in many local town or neighborhood newspapers – and appear all over the web!

People who want to protect their personal information from public disclosure can use a number of techniques. Since newspapers report the names of buyers that appear on deeds, the most common privacy technique is to substitute a “Trust” for the buyer’s name on the deed.

Rather than your name appearing on the deed as the new owner, designate a Trust that you own and control instead. If done right, your privacy is protected.

The typical real estate trust is simply a legal device in which a person who is named as trustee follows the directions of the beneficiaries or real owners; i.e. you.

The first step in creating a trust is to choose a name for the trust. The second step, and this is the key for privacy purposes, is to choose a person other than yourself to serve as trustee. It may be a friend, lawyer, accountant or financial advisor.

When the newspaper reports your purchase, it publishes the names of the trust and the trustee – who is someone other than yourself. Privacy is thus protected.

Using a Trust is not without its pitfalls. It can, for instance, make getting a mortgage more difficult, depending on the type of mortgage and the lender you wish to use.

While many banks have no problem providing a mortgage loan where title to a home is held in a trust, mortgage brokers and lenders who sell all their loans often will have a problem. Thus, sensible planning is essential.

If you’re interested in using a trust for your home, contact me. I’ll be glad to help with your real estate or estate planning needs.

 ©2011 George Warshaw. All rights reserved.

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George Warshaw is a well-known attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.

Legal Advice: Laws, and court decisions interpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neither intended as legal advice nor shall establish an attorney-client relationship. Before making any legal decision, consult an attorney to see how the foregoing may apply to your particular circumstances.

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Small Claims – How It Works

17 Oct

It happens often. You’re buying a home but you don’t like the results of the
inspection and you cancel the offer – or at least you try. The seller refuses
to release your deposit.

 You’re a tenant. You paid a security deposit and now you want it back. You’ve asked for it but your requests have been ignored.

Recent changes to small claims procedures make small claims very attractive. The amount that can be sued for in small claims has increased from $2,000 to
$7,000.

You don’t need to hire a lawyer in small claims unless you are a corporation or a
limited liability company. You can do it yourself.

Once the small claims case is filed, notice is sent to the defendant by regular
mail. A date is chosen by the court and the parties must appear or risk being
defaulted.

Hearings are no longer held in front of a judge. Rather, certain court personnel,
designated as Clerk/Magistrates, conduct the hearings.

It’s important to bring with you all the documents that you want considered by the hearing officer. Telling the hearing officer that “it’s at home” will often
lose the case. Be fully prepared to have any witnesses with you, copies of
checks and all your documents. Good luck! 

© 2011 George Warshaw. All rights reserved.

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George Warshaw is a real estate attorney and legal author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.

Legal Advice: Laws, and court decisions interpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neither intended as legal advice nor shall establish an attorney-client relationship. Before making any legal decision, consult an attorney to see how the foregoing may apply to your circumstances.

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Rebuilding Your Credit

13 Oct

Metro®Boston, Publication Date: October 12, 2011
By Attorney George Warshaw

 “I couldn’t get a loan because my credit was lousy.”

 What can you do about it? There are a few simple things that can help. The starting place is your credit report. Get a free copy and see what went wrong, then start to rebuild.

 The first thing is dispute any inaccuracies in the report. Is something on the report that belongs to a person with a similar name? Has something already been paid? Don’t hesitate to challenge the credit bureau or call the creditor directly.

 Second, and I consider this the most important, start paying all your bills on time, especially mortgage and credit cards. There’s an easy way to avoid future late payments.

 Nearly every credit card or mortgage lender allows you to set up an automatic payment method in which money is taken directly out of your bank account by the creditor to pay the bill.

 If you put every credit card on an automatic minimum payment plan with the creditor, you won’t miss a payment! You can always write a check and send in more later when you look at your written statement, but at least you won’t miss a payment!

 Go to the creditor’s website, register, and look for the payment screen. It will solve a lot of problems.

© 2011 George Warshaw. All rights reserved.

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George Warshaw is a real estate attorney, estate planner and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, prenuptial agreements and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.

Legal Advice: Laws, and court decisions interpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neither intended as legal advice nor shall establish an attorney-client relationship. Before making any legal decision, consult an attorney to see how or if the foregoing may apply to your circumstances.

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Where Are Interest Rates Going?

11 Aug

Metro®Boston, Publication Date: August 10, 2011

By Attorney George Warshaw

Lost in the debris of the deficit debacle and the stock market free fall is the effect on mortgage interest rates. Will they rocket upwards, stay the same or decline?

Mortgage rates rise or fall based on something. But what?

There are actually two types of mortgage loans and two types of rates: first mortgages are long-term interest rates; home equity loans are short-term monthly rates. The rate on each is established differently, and often go in different directions based on the exact same news.

When the Fed announces that it is lowering or raising rates, that immediately affects the monthly rate charged on home equity loans, not first mortgages.

First mortgage rates are determined by the longer-term bond market. I’ve heard it said that first mortgage rates follow “the 10-year Treasury” or “mortgage backed securities” instead. In other words, as prices on a specific longer-term “fixed income investment” rise or fall on Wall Street, first mortgages interest rates ultimately bounce along with it.

Confused? Since no one seems to be managing our economy right now, you are not alone. Be safe. If you can lower your first mortgage rate, do it now.

Need a recommendation for a good mortgage lender? Email me. I know several good lenders.

© 2011 George Warshaw. All Rights Reserved.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.

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Getting Older – The New American Dream

30 Jun

Metro®Boston, Publication Date: June 29, 2011

By Attorney George Warshaw

The economy has changed the way older homeowners view their future.

Many are selling their long-time residence and renting rather than buying a
replacement home. No more mowing the lawn, paying a mortgage and maintaining an aging house. Sell the house, bank the money.

The second home market in a prolonged down economy is usually the first to collapse and the first to present opportunities. Among those who rent their primary residence, many are taking advantage of the depressed market to buy a vacation house.

I spoke about this recently with Jennifer Knight, a REMAX buyer’s broker on Martha’s Vineyard (jennifer@jennifersrealestate.com, (508) 221-2615).

“Tastes and needs have changed. Many who have sold their primary homes still need a place where they can entertain; where friends, children and family can be together, especially in an environment where there is a great deal of life, enjoyment and energy.

“But now they’re buying with cash flow in mind. They’re buying and then renting their Vineyard house for a month or two in the summer. The income from the vacation home rental covers the taxes and possibly operating costs, and they still get to host their family and friends.”

What’s happening on Martha’s Vineyard is not unique as people strive to find a balance between the life style they want or need, and the means to support it.

The prolonged so-called “jobless recovery” has caused many to change their approach to getting older and restructure their personal financial game plan. No one any longer believes that social security will be there for you when you retire.

It’s not simply a matter of the continual rise in the age when you are eligible to receive benefits – obviously they hope you are dead before the government has to pay; rather, the government has “borrowed” most of the money for its day-to-day operating expenses.

The recent debt ceiling crisis revealed that the government raided social security as a loan to be repaid in the future. Now the government needs to raise the debt ceiling to be able to borrow more money to pay its bills and repay social security.

Hmmmm! Perhaps they should consult a financial planner or better yet, I’m sure Bernie Madoff could give them some advice. At least he has experience!

© 2011 George Warshaw. All rights reserved.

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George Warshaw is a real estate attorney and legal author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.

Legal Advice: Laws, and court decisions interpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neither intended as legal advice nor shall establish an attorney-client relationship. Before making any legal decision, consult an attorney to see how the foregoing may apply to your circumstances.

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How Homeowners Make Money Installing Solar Energy

15 Jun

 Metro®Boston, Publication Date: June 15, 2011
Expanded content

By Attorney George Warshaw

In addition to possibly having zero energy costs, there are a number of surprising ways a property owner in Massachusetts makes money by installing solar energy panels – including one way that generates a yearly check!

Tax Credits. Tax credits reduce your income tax. Current IRS rules permit a homeowner to claim a credit of 30% (no max amount) of the cost of purchase and installation of solar energy. Massachusetts provides a similar credit of 15% ($1,000 max) on state income tax.

Cash Rebates. Many towns have a program in which the homeowner receives a cash incentive for installing solar. Concord Municipal Lighting Company, for example, will rebate a buyer at the Riverwalk Condominiums in Concord up to $3,125 depending on the size of the system.

Yearly Income. Massachusetts, like some states, requires the power company generate a minimum percentage of its electrical power to end-users from certain renewable energy sources, such as solar. 

Right now, the power companies can’t generate enough solar power. They make up this deficiency by counting the energy generated by property owners who have installed solar.  The utility companies don’t, however, get to count it for free. They have to buy it each year – from you!

Here’s how. 

A property owner receives one (1) Solar Renewable Energy Certificate (a “SREC”) for each 1,000 kilowatt hours of solar generated power. Generate 10,000 kilowatt hours, get 10 certificates.

According to Steve Weikal (617-596-2777, steve@concordriverwalk.com), solar panels on new condos at Concord Riverwalk  by local solar integrator SunBug Solar (www.sunbugsolar.com) generate between 3 and 6 SRECs, a year, depending on the number of panels installed.

 The power companies compete for these certificates through an auction process. In the most recent auctions, Massachusetts  SRECs have been selling at over $500 each. If you acquired 3-6 certificates through your ordinary use, you would have received between $1,500 to $3,000, less brokerage commissions.

To sell your SRECs, you contact a SREC broker (they’re all over the web). SREC brokers function a lot like Fidelity or Schwab. Instead of selling your stock in Ford or GM, sign up online with a SREC broker and they take it from there.

Buy a solar-powered home, and put money in your pocket! ©2011 George Warshaw. All Rights Reserved.

References

Federal tax credit, http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US37F&re=1&ee=1

Massachusetts tax credit, http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=MA06F&re=1&ee=1

Other Massachusetts tax/credit/rebate programs see http://www.dsireusa.org and search for Massachusetts.

See also http://www.srectrade.com/background.php on selling SRECs.

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George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.

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The New Mass. Homestead Law

31 May

Metro®Boston, Publication Date: June 1, 2011 

By Attorney George Warshaw

If you mention “homestead law” to someone in Massachusetts, their eyes usually roll in puzzlement and ask, “What’s that?”

Quite simply, it’s a law designed to help homeowners keep their homes when in debt or faced with a judgment they cannot pay. The law does not protect against divorce, taxes, or mortgage foreclosure, but it is very helpful in many other situations.

The law prevents a plaintiff, claimant or creditor from selling your principal residence to satisfy a debt, as long the equity in your home is not more than $125,000 or $500,000.

By filing a Declaration of Homestead in the registry of deeds, you protect up to $500,000 of the equity in your home against liens imposed after the time and date of your filing.

If you choose not to file, you still receive $125,000 in protection – but only if you bought your home on or after March 16, 2011. Otherwise, you must file a written declaration to gain any protection.

Filing a declaration is cheap and easy to do. While it is better to have a lawyer guide you, you can download the form on most registries of deeds websites.

Homesteads filed under the old law are valid with, perhaps, one exception:  recent decisions from the bankruptcy court have led many to question whether the “release of homestead” language in the standard Fannie Mae mortgage inadvertently terminated a homestead filed before March 16th (i.e. under the former version of the law).

Many commentators are suggesting that homeowners file a new homestead declaration to be safe.

How the new law works. Here’s an example:

Husband and wife (H&W) purchase a home for $500,000 and borrow $100,000 from the bank, giving the bank a mortgage for the amount borrowed. It will be their principal residence.

They thought about filing a formal homestead declaration to obtain the maximum protection but did not. Fortunately, the new law gives them an automatic $125,000 protection in the equity in their new house or condominium from liens and lawsuits.

They hire a home improvement contractor and get into a dispute. The contractor files a mechanic’s lien and later obtains a judgment for $25,000. The judgment cannot be enforced against the marital home. Thus, the contractor cannot force the sale of the house or condo to pay the judgment. Their home is safe under the homestead law – at least for now.

A few years pass and the husband and wife sell their home for the same price they paid. The contractor cannot stop the sale or require they pay the $25,000 judgment as a condition of the sale. The husband and wife take the proceeds from the sale, a little less than $100,000, and put it into their bank account. That money is safe for one year under the new law.

If the husband and wife use the proceeds from their sale to buy a new home within one year of their sale, the proceeds and their new home will be protected against the contractor’s judgment.

The new Massachusetts Homestead Law is very complicated, but it works to the benefit of all homeowners. It provides special protections for persons of age 62 or more or who are disabled and permits beneficiaries of a trust to protect their principal residence if the real estate is in the trust.

It will take a few years before the courts provide guidance and clarity on the details of the law. © 2011 George Warshaw. All rights reserved.

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George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.

Legal Advice: Laws, and court decisions interpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neither intended as legal advice nor shall establish an attorney-client relationship. Before making any legal decision, consult an attorney to see how the foregoing may apply to your circumstances.

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Avoiding Surprises in Home Renovations

24 May

Metro®Boston, Publication Date: May 25, 2011

By Attorney George Warshaw

Your real estate agent or broker, with good intentions, recommends a home improvement contractor. He starts the job but you get into a dispute and quite rightly refuse to pay. Can the contractor place a lien on your home?

Massachusetts law permits an unpaid contactor, including a subcontractor, to place a lien on one’s home for work, labor and materials. It is typically called a “mechanic’s lien.”

A contractor must carefully follow strict procedures in order to acquire and maintain the lien on your house, condo or vacation home, but it’s not hard to do.

If you are renovating or remodeling your home should you care? Try to refinance, get a home equity loan or sell your house with a lien on it!

Now for the surprise. . .

A subcontractor or materials supplier who has not been paid can file a mechanic’s lien on your home – even if you paid the contractor in full, and even if you never signed a single document with the sub!

Can you protect real estate from mechanic’s liens? Make sure the roofer, the plumber, Lowe’s and Home Depot and all subs are paid. The homestead law is another way. More on homesteads next week. © 2011 George Warshaw.

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George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.

Legal Advice: Laws, and court decisions interpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neither intended as legal advice nor shall establish an attorney-client relationship. Before making any legal decision, consult an attorney to see how the foregoing may apply to your circumstances.

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Protecting Your Home From Liens And Lawsuits

17 May

Metro®Boston, Publication Date: May 18, 2011
Expanded Content

By Attorney George Warshaw

There are several ways that you can protect your home from liens and lawsuits.

The Massachusetts Homestead Act, recently revised, protects all or part of the equity homeowners have in their house or condo from individuals or businesses suing the homeowner. The protection applies only to primary residences and not second homes or investment properties.

Homeowners automatically receive $125,000 in protection upon the recording of a deed. The statute permits homeowners to increase that protection to $500,000 by filing a declaration of homestead with the registry of deeds.

The homestead is particularly valuable in disputes with home improvement contractors. A contractor or subcontractor has the ability to file a so-called “mechanic’s lien” on your home for unpaid work – even if you dispute that work. The homestead law often prevents a contractor from enforcing that lien.

Another method of creditor protection is to place your home into a trust. When done for a legitimate purpose, such as estate planning or as a way of managing real estate, a trust may prevent or deter a creditor from acquiring a lien on your home. A creditor usually has to “break the trust” through a court proceeding in order to attach one’s home. Under the newly revised Homestead Act, one can now utilize both a trust and a homestead to maximize lien protection.

A trust is typically created by signing a “declaration of trust” – a document prepared by a lawyer that often contains creditor protection features. © 2011 George Warshaw.

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George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.

Legal Advice: The content and information contained in this article is not intended as legal advice. Before making legal decisions consult an attorney to see how the foregoing may apply to your circumstances. Laws change frequently and this article is not updated as laws change.

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Mistakes Home Buyers Make in the Offer

9 May

Metro® Boston, Publication Date: May 11, 2011

By Attorney George Warshaw

You’ve searched MLS (Multiple Listing Service) for a condo or house for sale in Massachusetts, acquired a real estate agent along the way, and now you’re ready to make an offer to purchase your new home.

Here’s a few things, often overlooked, that you may want to include or change in your offer: 

  • Make your purchase conditional on an appraisal that is no less than the purchase price
  • Don’t choose Friday or the last day of the month as your closing date. These are the busiest real estate days and your deed might not get recorded that day (i.e. you could be prevented from moving into your new home when you expect)
  • Make your offer conditional on all systems and appliances being in good working order on the day of closing
  • Be wary of the preprinted “inspection contingency.” These often limit your right to cancel solely to “serious structural or mechanical defects” that may exist in the house or condominium. Change it to an “inspection that is satisfactory to you.”
  • If you’ve also listed your home for sale, don’t try to buy the same day as you sell.

More on this to come. © 2011 George Warshaw. 

The foregoing is not intended as legal advice. Consult an attorney to see how or if the information may apply to you.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com

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A Short Sale Surprise

30 Apr

Metro® Boston, Publication Date: April 13, 2011

By Attorney George Warshaw

In a short sale, a mortgage lender agrees to accept less than it is owed when a house or condo is sold.

The short sale lender issues a letter to the seller (i.e., its borrower) in which the lender promises to release its mortgage upon receipt of a certain amount of money by a specific date. The letter is in turn given to the closing attorney who relies upon the letter in conducting the closing and issuing title insurance.

I recently discovered a lender that issues not one, but two short sale letters: one for the attorney, and one that specifically directs that it “DOES NOT” go to the attorney. The second letter requires additional “side” money before the lender will release its mortgage.

What happens if the sale goes through but the lender never receives the secret side money? The unsuspecting buyer won’t have clear title to the property if the lender refuses to release its mortgage.

The unsuspecting buyer hopefully bought title insurance, but it could still take several years before the mortgage is finally cleared from the title.

Apparently, our Attorney-General was notified of this national lender’s disgraceful practice and has done nothing about it. Maybe that’s the surprise! © 2011 George Warshaw.

The foregoing is not intended as legal advice. Consult an attorney to see how or if the foregoing applies to you.

Attorney George Warshaw represents buyers and sellers of homes, condos and investment properties, prepares wills and trusts for inheriting real estate, and trusts that protect your children and pets. George welcomes new clients and questions at  george.warshaw@warshawlaw.com.

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Discounting Brokerage Fees

30 Apr

Metro® Boston, Publication Date: March 16, 2011

By Attorney George Warshaw 

A recent advertisement offered to give a buyer a “$5,000 rebate certificate” if the buyer attends one of the broker’s “open houses” and then uses that broker as the buyer’s agent in the sale of any property. 

Hmmm! Sounds interesting. Go to an open house, see a particular house or condo, sign up right then with the broker to buy that or any other property, and get $5,000 back at the time of purchase. 

This could be a good deal for a buyer, but it also might not. 

A broker that lists a house or condo for sale receives the entire sales commission where there is no other broker involved. That’s good for the broker: it doesn’t have to split the commission with a buyer’s agent. 

Where the listing broker gives a buyer a cash incentive to use no other broker, how does a buyer know the lowest possible price at which the property could be purchased where the buyer is not getting independent advice? 

There’s no substitute for being a knowledgeable buyer. Consider assembling your own team of realtor, lender and lawyer before you start shopping for a new home. You’ll be assured that way of getting the best possible advice. © 2011 George Warshaw.

The foregoing is not intended as legal advice. Consult an attorney to see how or if the foregoing applies to you.

Attorney George Warshaw represents buyers and sellers of homes, condos and investment properties, prepares wills and trusts for inheriting real estate, and trusts that protect your children and pets. George welcomes new clients and questions at  george.warshaw@warshawlaw.com.

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Problems in Margaritaville

30 Apr

Metro® Boston, Publication Date: February 2, 2011

By Attorney George Warshaw 

Recently, the Boston Globe ran a story on nightmares that people can experience in owning a condo in a small building. The gist of the story is that one miserable owner can make everyone’s life a living hell. 

While it doesn’t happen often, it happens often enough to require your attention as a buyer. 

So how can you ferret out a problem situation before you buy? These answers are not perfect; but perhaps this will help. 

Oddly enough, the first thing to do is ask. Ask the seller and especially the property manager (or one of the condo trustees) if everyone gets along, and about conflict and complaints. Inquire whether there has been any past litigation or mediation in the last three years. 

As a buyer, it’s important to review the minutes of meetings of the unit owners and condo trustees. Conflict will often be evident – or gleaned – from the notes of the meetings. View at least 3 years’ worth of meeting minutes.

Look over the budget carefully. Have there been any expenditures for legal fees in the last three years?

If you find yourself as an owner in one of these situations, it may be best to bring matters to mediation or arbitration and get them resolved – sooner rather than later! © 2011 George Warshaw. 

The foregoing is not intended as legal advice. Consult an attorney to see how or if the foregoing applies to you.

Attorney George Warshaw represents buyers and sellers of homes, condos and investment properties and prepares wills and trusts for inheriting real estate. George welcomes new clients and questions at  george.warshaw@warshawlaw.com.

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The Broker as Escrow Agent

30 Apr

Metro® Boston, Publication Date: January 26, 2011

By Attorney George Warshaw

It wasn’t a bad idea.

The buyer saw a condo at a Coldwell Banker open house. He made an offer. It was revised and rejected several times. THEN he hired a broker to help him. His offer was finally accepted by the seller.

The buyer made an unusual deal with his new broker. “I’ll pay you an hourly fee, but no less than $3,000; just refund me your share of the broker’s commission.”

Coldwell claimed that the buyer’s broker was too late to the dance and had done nothing, or very little, to earn a commission. Since Coldwell was holding the deposit in escrow from which commissions were to be paid, it refused to pay the buyer’s agents any portion after closing. 

The purchase agreement, however, stated that the commission was to be split evenly between Coldwell and the buyer’s agent, but Coldwell never signed the agreement (brokers rarely do). 

The court nonetheless found Coldwell liable and awarded the buyer triple damages. An escrow agent is required to follow the escrow terms of the purchase and sale agreement. In the event of a conflict, it should have declined to hold the money, negotiated different terms of escrow, or sought immediate guidance from a court. See Zang v. NRT NewEngland,77 Mass. App. Ct.665 (2010). 

The foregoing is not intended as legal advice. Consult an attorney to see how or if the foregoing applies to you.

Attorney George Warshaw represents buyers and sellers of homes, condos and investment properties and prepares wills and trusts for inheriting real estate. George welcomes new clients and questions at  george.warshaw@warshawlaw.com.

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