Buyers, Sellers & Agents: Make Sure Your Sale Is Legal

There is something important that all home buyers, sellers and agents need to be aware of and it is very easy to discover: making sure all parties on title have signed the listing agreement and the residential purchase contract (and of course all further documents that relate to the sale).  

It is extremely important that all listing agents check the property deed prior to having sellers sign a listing agreement. It is not hard to do and takes only a call to the title representative.  You cannot rely on what the seller(s) tell you, as they may not even realize that there is another person on title. Recently I sold a home on behalf of my buyer clients. I pulled up the tax records and saw there were 2 sellers named as owners. I drafted the offer with both names. Due to complicated circumstances one party was going to sell and the other was going to sign an interspousal deed transfer, but that was not signed yet. We got around it but it was a very strange situation and a bit risky.

Another home I sold recently had 3 sellers, but only 2 were named in the tax records; however the deed showed there was a third party on title (parent of one of the sellers). The listing agent was not aware of this and we had to get the third seller’s signatures on all paperwork after the contract was accepted. Luckily that third seller was cooperative – this may not always be the case.

If someone who is on title does not sign all paperwork then technically there is no contract, as the law states that all owners on title need to agree to a sale. You can imagine the legal repercussions down the road if things are done  improperly! The good news is that the title company will catch this and it can be corrected, but not if the other person who has not signed decides to be uncooperative.

If you are an agent, this is something you should know, but believe it or not many agents have listing agreements signed without checking with their title department to assure that all parties on title sign the agreement. Similarly, buyers agents need to check the deed before writing offers to make sure this is the case. If you are a buyer or seller, you should ask your agent to make sure s/he has all the correct information at the time of listing or writing an offer.