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Saturday, March 11, 2006 - Page updated at 12:00 AM


Home Forum

Agent isn't necessary to prepare sale forms

Seattle Times staff reporter

Q: If a buyer and seller don't want to use a real-estate agent, how can they prepare documents and where can they do it? Can they prepare the documents themselves?

A: They can do it, or they can use a real-estate lawyer, said Richard Morse, an attorney and owner of an escrow company and a 1031 exchange firm, Washington Exchange Services.

Some real-estate agents will prepare the documents for a small percentage of the property's sales price.

"Good agents convey value," Morse said.

By that, he means that a good agent has access to quality purchase-and-sale forms and the experience and know-how to fill them out to avoid potential land mines.

"Without an agent, they have to agree to price and terms, and that's a biggie," Morse said. "It only works if there is a truly trusting relationship between the two parties because there is no intermediary there."

Even then there can be problems, particularly if the buyer and seller use store-bought forms, which Morse said are fine for the big issues like price but often fall short on the fine points — like whether there will be inspection and financing contingencies and how those will work. Those forms are legally enforceable.

"If buyers and sellers are totally on their own, chances are they're going to miss a lot," Morse said. "They won't know it until after the deal is cut and escrow says they have to follow the contract, and they don't agree on what the contract says."

He gives this example: A seller agrees to credit the buyer $3,000 in closing costs. Does that mean a $3,000 lump sum or up to $3,000? And what's included in closing costs?

A real-estate attorney generally will have the proper documents and will know how to craft them to avoid ambiguities. The cost will be several hundred dollars, and the attorney will act as a neutral third party.

If the buyer and seller can't agree on terms, each is advised to get his or her own attorney, Morse said.

Q: My condominium has 60-plus units. Over the years, the number of rentals has been growing. It's now close to 50 percent. We know that most owner-landlords would never vote for a cap when they get cost-free supervision of the complex by the board and the hired manager. However, what effect will having such a large percentage of rentals have on future unit sales and prices?

A: Owner-landlords aren't really getting free supervision because condo management doesn't monitor what goes on inside units, and out of sight is where damage can occur.

Beyond that, there can be serious ramifications if the percentage of owner-occupied units dips below 50 percent, said James Hruza, operations manager of Seattle Mortgage's Lake Union branch.

Lenders generally don't loan their own money. Instead their loans are underwritten by mortgage giant Fannie Mae, and Fannie Mae will not give automatic approval for loans in buildings where less than half of the condos are owner-occupied.

"If a strong-enough buyer comes along, Fannie Mae will give limited approval for this one person," Hruza said.

That means potential buyers in this building likely won't get loans unless they have high credit scores, good liquid assets and a good debt-to-income ratio.

Selling only to "highly qualified buyers is going to limit your pool," said Hruza.

"If you're in a building that has $700,000 or $800,000 condos, this won't be a problem because these buyers will have high credit scores," Hruza said. "But if you're in a starter condo building, you will."

That means rental-heavy buildings priced within the reach of first-time buyers — below about $400,000 — could have a hard time landing buyers. Typically, condos limit rentals to 30 percent or less, Hruza said.

Whether a high rental ratio would affect prices would depend, in part, on how much the condos cost and where they are. But in general, Hruza speculated that quality buyers would be less interested in buying a unit in a building where half the occupants can't be expected to treat the property as owners would.

Q: My wife and I are moving to Seattle in four months. Is one Seattle neighborhood safer than others, and do you recommend buying earthquake insurance?

A: There are different ways to look at the safety issue. If you're looking for crime statistics, visit the Seattle Police Department's Web site: There you'll find crimes by census tract and a map identifying each tract.

You can compare neighborhood rates of major crimes such as burglary, auto theft and assault. That site also will reveal how many sex offenders live in the area.

If you're looking for environmental-safety issues, you'll want to know about landslides, which have been a recurring problem in several neighborhoods.

You can glean information about landslide areas by visiting That's the Department of Planning & Development's Web site. However, department spokesman Alan Justad said you can't infer that landslide areas are more likely to suffer quake damage.

"Some of the harmonics of seismic events will reveal some surprising results," Justad said.

Much depends on which fault experiences the quake, how strong it is and how long it lasts.

"One area will have a spate of chimneys that topple, and another won't," Justad said. "Why one area resonates and another doesn't is complicated."

Thus his best advice is to consider the entire region a seismic zone and take precautions accordingly. That may mean taking out earthquake insurance. Standard homeowners insurance doesn't cover quakes. An insurance agent can advise you about the costs and benefits of such coverage.

For information about what homeowners can do to prepare their homes to withstand or lessen quake damage, go to

Home Forum answers readers' real-estate questions. Send questions to Home Forum, Seattle Times, P.O. Box 1845, Seattle, WA 98111, or call 206-464-8510 to leave a question on a recorded line. The e-mail address is Sorry, no personal replies. More columns at

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