A Seller must complete a Seller Disclosure Statement - Form 17 when they sell a home in Washington State.  The Form 17 asks several questions about the condition of the home and must be answered completely by the Seller.  Also, the Seller must disclose any problems with the home that are considered “material.” An experienced real estate attorney can help a Seller with any required disclosures.

Title Insurance guarantees that a buyer of real estate owns the property without someone challenging their ownership.  It also provides a buyer with information about the property such as existing liens, loans, encroachments, and easements that all may affect the property forever.

An escrow firm is a company that holds the funds for a real estate purchase and sale and also records the deed and mortgage at the County recorder’s office.  The escrow company coordinates and pays off the mortgage for the seller, prorates the real estate property taxes and utilities, and pays the transfer taxes for the sale.  They are neutral and do not represent either the buyer or seller.

When a home seller hires a real estate broker to sell their home, the broker will ask the seller to sign a Listing Agreement.  A Listing Agreement is a contract between the broker and the seller that describes the work a broker will do, for example, list the property in the MLS, take photos,

conduct open houses, negotiate the purchase contract, and provide the price for the property.  In exchange, the home seller agrees to pay the broker a commission when and if the sale closes.  Under Washington law, commissions are negotiable between the buyer and seller.

A quitclaim deed transfers a person's interest in a property without defining the nature of the person's interest or rights and with no warranties of that person’s interest or rights in the property. A quitclaim deed neither states nor guarantees that the person relinquishing their claim to the property had valid ownership. Still, it does prevent that person from later claiming they have an interest in the property.

An I.R.C. 1031 Exchange is part of the United States Internal Revenue Code that allows an investment property owner to exchange their property for a new investment property and not pay federal income tax.  Personal residences cannot be used in a 1031 Tax-Free Exchange.

1031 Tax-Free Exchanges are very complicated, and an investor must engage a licensed 1031 Exchange Facilitation Company to legally and correctly complete a 1031 Exchange.

Earnest money in real estate or good faith deposit is funding a buyer deposits with the escrow firm to prove their seriousness about buying a home. A buyer delivers the earnest money when signing the purchase agreement or soon after.  Earnest Money should be held by a neutral escrow firm, not a seller or real estate broker.  Earnest money should not be greater than 5% of the purchase price in Washington state.

A prepayment penalty refers to a term in a loan that requires the borrower to pay a penalty if the borrower pays off the loan earlier than the original terms of the loan.

Seller financing is when the seller of a property agrees to lend the buyer the funds to purchase the property.  In a seller financed sale, the seller usually receives a down payment from the buyer and then loans the buyer the remaining amount due for the purchase price.  The loan usually has at least two components: 1. Promissory Note and 2. The Deed of Trust or Mortgage.  The promissory note states the payment terms of the loan and the deed of trust or mortgage is recorded against the property’s title and is a lien on the property.  In a seller-financed sale, the term of the loan is generally between 3-10 years.