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Writer Raises Roof Over New Disclosure Law

March 22, 1987

I read David Myers' article, "New Laws Affect Real Estate Deals" (Jan. 18) with interest as I was in the early process of escrow, which opened on Jan. 2, and was subject to the new disclosure rules the real estate lobby got passed in the last Legislature.

My costs to sell the house for $69,000 included the following: For the loan application for the buyer, $354; title company, $513,50; first-mortgage holder fee, $100; second-mortgage holder fee, $190; repair dry rot on one board, $55; county tax collector, $75.90.

In addition, the buyer's agent demanded a new roof, seven days before escrow closed; my cost, $1,625. Including 6% commission to realtors, it cost $7,123.40 ( or 10%) to sell my house.

The result of this escrow suggests that realtors, banks, escrow companies, the termite inspector and the building inspection folks have each found ways to get to the seller.

But with the new real estate rules, it is easier for the buyer to have a leg up on the seller, since, as was true in this case, the listing realtor quickly goes through the check list, but as the escrow is about to close, the buyer's agent demands the extras--such as a roof--even though it was FHA-approved previously. The option is to let the house stand vacant for another month, then have another 30-to-60-day escrow.

It is obvious, after the disclosure law, that sellers must add another 10% to the listing price since they must bring the house to "new specifications" before sale or pay the consequences. It is better to do it in advance and then charge more.

I think it is about time for some attorney to begin a class action suit against the mortgage holders; their cost for servicing the loan for the escrow companies is true gouging. It is a prepayment penalty, without stating such in the loan contract.



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