[WSBARP] real estate contracts?

Wed Jun 22 16:29:59 PDT 2016

I can attest that REC are quite rare in Pierce County.  They are used mainly, though not exclusively, for sales of vacant land.
We find REC being used mainly by developers who buy up large tracts of land and subdivide them into 5 to 20 acre lots.
As an aside, I also have always recommended REC for sellers, and deed/deed of trust for buyers.
In today’s regulatory world, if I were selling a house and carrying the paper, I certainly would opt for the REC.

John McCrady
Counsel
Puget Sound Title Company
5350 Orchard Street West
University Place WA 98466
253-476-5721

From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Marc Holmes
Sent: Wednesday, June 22, 2016 3:11 PM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] real estate contracts?

Thanks for chiming in Dwight.  Washington Practice Guide mentions an east/west divide in the use of real estate contracts with them being used much more frequently east of the Cascades than west.  A quick search of the King County Recorder’s website for document type “real estate contract” pulls fewer than 20 distinct results for 2016 and less than 50 in all of 2015.  And some percentage of these were actually fulfillment deeds rather than new contracts.  I do not know how thorough this search method is but it certainly suggests that real estate contracts are extremely rare in King County.

Does that seem correct to you?

Marc Holmes
Holmes Law Group PLLC
808 5th Ave N
Seattle WA 98109
HolmesLawGroup.com<http://holmeslawgroup.com/>
marc at holmeslawgroup.com<mailto:marc at holmeslawgroup.com>
Ofc: 206-357-4224
Cell: 206-849-0853

From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Bickel, Dwight
Sent: Wednesday, June 22, 2016 2:15 PM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] real estate contracts?

The late and wise John Gose had many reasons to be fond of the Deed of Trust method of foreclosure that he helped to create in Washington. If he had been on the Supreme Court he may have changed the course of the recent judicial path. I think he would have put more emphasis on the certainty element that the court always mentions. But I doubt he would have gone out of his way to protect absentee mortgage owners of securitized mortgages. Setting that speculation aside…

I will speak only for myself and my underwriting judgment for title insurance issued following foreclosures. I will trust all readers not to rely upon this message as a basis to expect title insurance from any title company I might be employed by at that time.

My answer to the relative insurability question Marc Holmes asked is, in my opinion, real estate contract forfeitures are less likely to be set aside against the seller than deed of trust non-judicial sales are likely to be set aside against the lender. All other risk factors equal, I am less willing to assume risk to insure the lender after a recent Trustee sale. However, at the time of a resale, I do not perceive a difference in the risk that the forfeiture or foreclosure would be set aside against a bona fide purchaser.

Recent cases seem to be settling down, so at present I feel comfortable that I am able to recognize the higher risk profiles that are more likely to set aside a non-judicial foreclosure sale. So, if the procedures look correct on the record, the Trustee is known to me to be dedicated to quality, and if the borrower does not stop the sale, then I conclude the sale is not likely to be set aside against a bona fide purchaser that acquires at the foreclosure sale, or at resale from the lender that acquires at the foreclosure sale.

Washington real estate contract forfeitures have not been discussed in appellate decisions anything like the recent volume of cases challenging Trustee sales. I do believe there are fewer types of challenges against a forfeiture. There are a lot of special foreclosure steps now required for Trustee sales that do not apply to forfeitures. Probably the lack of appellate cases is just a reflection of the volume of foreclosures versus forfeitures. Maybe it also reflects the volume of lawyers who are eager to challenge non-judicial sales. The bottom line is the same: the forfeiture is not likely to be challenged. Therefore, again if the procedures look correct on the record, then the forfeiture is not likely to be set aside against a bona fide resale purchaser from the seller after forfeiture.

Now I must hope my predictions of the lack of future litigation are way more accurate than my predictions of past litigation.

Dwight Bickel

From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Marc Holmes
Sent: Wednesday, June 22, 2016 12:16 PM
To: 'WSBA Real Property Listserv'
Subject: Re: [WSBARP] real estate contacts?

In my last year of law school I took a real estate class taught by the late John Gose and I remember very clearly two pieces of advice.  First, never carry a second unless you are ready, willing, and able to pay off the first in full.  Second, was always use a deed of trust rather than a real estate contract because the latter is too easily challenged by the vendee and converted into a judicial foreclosure thereby defeating its primary benefit of speed.

As I recall, he felt that a vendee under REK was much more likely to get sympathy from a judge than a trustor under a deed of trust if only because judges rarely see them and, thus, would be more receptive to allegations of vendor wrongdoing.

I’m curious if any title companies are less willing to insure title after a REK forfeiture than a non-judicial foreclosure.

Marc Holmes
Holmes Law Group PLLC
808 5th Ave N
Seattle WA 98109
HolmesLawGroup.com<http://holmeslawgroup.com/>
marc at holmeslawgroup.com<mailto:marc at holmeslawgroup.com>
Ofc: 206-357-4224
Cell: 206-849-0853

From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Josh Grant
Sent: Wednesday, June 22, 2016 11:14 AM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] real estate contacts?

I agree with Jeanne.  RE contact is a preferred way for a seller to sell real property.  Very simple to forfeit.
One suggestion.  Because there is a Ct of Appeals case which says that if you put buyer must pay “reasonable attorney fees” that the buyer has the right to have that determined in court. The beauty of a real estate contract is that forfeiture is non-judicial.   AS a result I put in the contract a straight dollar amount ( for example $1,000) as amount buyer must pay for attorney fees in the event a notice of forfeiture is filed.  They either pay it or lose forfeit.

Josh

Joshua F. Grant, PS
Attorney at Law
P. O. Box 619
Wilbur, WA 99185
tel 509 647 5578
fax 509 647 2734

From: Jeanne Dawes<mailto:jjdawes at goregrewe.com>
Sent: Wednesday, June 22, 2016 10:00 AM
To: WSBA Real Property Listserv<mailto:wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] real estate contacts?

I prefer a real estate contract over note & deed of trust when I represent the Seller.  Forfeiture is quicker, and less expensive than foreclosure.  If I represent the buyer, I prefer Note & Deed of Trust.

Jeanne

Jeanne J. Dawes
Attorney at Law
Gore & Grewe, P.S.
103 E. Indiana Avenue, Suite A
Spokane, WA 99207-2317
Voice:  509-326-7500
Fax:      509-326-7503
jjdawes at goregrewe.com<mailto:jjdawes at goregrewe.com>
INFORMATION CONTAINED IN THIS E-MAIL TRANSMISSION IS PRIVILEGED AND CONFIDENTIAL.

From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Roger Hawkes
Sent: Tuesday, June 21, 2016 7:36 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] real estate contacts?

Thanks, Roy.  I assume the purchaser did not defend?

From: Roy D. Pyatt [mailto:roy.pyatt at landerholm.com]
Sent: Tuesday, June 21, 2016 6:03 PM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] real estate contacts?

Roger,

I prefer using a note and deed of trust in seller finance transactions like everyone else. But I have performed a couple forfeitures on real estate contracts in the last year or two and both went through nicely. It’s about a four month process to complete. Both forfeitures were for nonpayment.

Roy

Roy D. Pyatt | Attorney at Law
[cid:image001.gif at 01D1CCA3.519E00E0]<http://www.landerholm.com>
805 Broadway Street, Suite 1000
P.O. Box 1086
Vancouver, WA  98666-1086
T:  360-696-3312 | T:  503-283-3393 | F:  360-816-2541
www.landerholm.com<https://protect-us.mimecast.com/s/lNV1B6tpl8sm>

From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Roger Hawkes
Sent: Tuesday, June 21, 2016 5:36 PM
To: 'WSBA Real Property Listserv'
Subject: [WSBARP] real estate contacts?

I just had a client who wants to sell some land on a real estate contract.  That is a rarity in my practice.  What are your recent experiences with enforcing such or retaking the property upon failure of payment? Or waste?

Roger Hawkes

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