Living Green Olympia: More Questions Buyers Ask - "Why Does Buying a House in the Olympia WA Area Take So Much Paperwork?"

More Questions Buyers Ask - "Why Does Buying a House in the Olympia WA Area Take So Much Paperwork?"

 

Questons Buyers/Sellers Ask

"Why does buying a house in the Olympia WA area take SO much paperwork?"  I get asked this question a LOT - and of course in this day of searching for homes online on a computer, the sheer amount of paper involved in a real estate purchase IS kind of amazing.

But buying a house is a VERY complex transaction, and the stack of paperwork that makes up the buyers' offer on that house reflects this complexity.  Real estate transactions are complex in any state, and the paperwork that creates the legal contract between buyer and seller reflects this complexity.

Here in the Olympia WA area, we use a 5 page main purchase and sales agreement that includes the specific details of the transaction - who is the buyer, who is the seller, what is the address and property tax parcel # of the property being sold, purchase price, closing date and more.

Then come the addendums, and they are to protect the buyer's ability to get certain things done or be able to cancel the purchase without loss of their earnest money.  Some examples are a finance addendum that makes the sale contingent on the buyers ability to borrow any funds they will need to complete the purchase.  Besides addressing the buyers' need to have a loan go through, it addresses what will happen if the appraisal comes in below the agreed upon purchase price.  Also commonly used is an inspection addendum that allows the buyer to have any inspections done that they choose and then either approve the results, negotiate for repairs they want the seller to make, or cancel the purchase.

I also recommend addendums to give the buyer a window of time to review and approve the preliminary title report that will indicate any encumbrances (easements and such) that will remain with the property after closing, and a utility identification addendum both to inform the buyer of utility providers for the property and instruct escrow to pay final bills for any of the providers that could otherwise place a lien on the property if the seller fails to pay.

Other addendums are used when needed - a lead paint disclosure if the house was built prior to 1978; a well addendum spelling out requested well testing and who will pay if a well is the water source for the house; a septic addendum specifying buyer requests for seller to have the septic pumped and inspected; a short sale addendum if the house being sold is in fact a short sale; a contingent on sale or closing of buyers current home addendum if that is applicable.  And miscellaneous others that come into play in some situations.

Of course, if the home being purchased is new construction in the presale stages, or bank owned, there will be some additional reams of paper necessary for the builder's or banks' addendums.

So, yes, buyers will end up with a very thick file of paperwork - and that's even before the closing table with MORE stacks of paper to be signed.  Like I said - it's complex!

                                                                           

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For Info on the Communities of Olympia, Lacey & Tumwater  WA and the real estate to be found here, just call me, text me, email me!  And I'd love for you to subscribe to my blog.

Nancy Conner, City Realty Inc,    360-701-1086     nancy@cityrealtyinc.net      

Comment balloon 2 commentsNancy Conner • January 07 2011 07:22PM

Comments

Nancy,  Great expaination.  There all the addendums you mentioned plus all the addendums the banks require.  We are fortunate we live in the Northwest and have all these trees to make paper out of.  I am glad we have the great recycling programs also so we can replant to keep up with the pace of the cuttings.

Posted by Terry Meyer (Berkshire Hathaway HomeServices Sound Realtors) about 7 years ago

Thanks Terry!  I am enjoying lessening the paper stacks a little bit as we are using Docusign for client signatures whenever possible.  Do you remember when people predicted that computers would make offices paperless?  LOL

Posted by Nancy Conner, Olympia/Thurston County WA (Managing Broker - City Realty Inc) about 7 years ago

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