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Author Topic: CONTRACTS QUIZ!!!!!!!!!!!!!!!!!!  (Read 1590 times)

ndiver

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CONTRACTS QUIZ!!!!!!!!!!!!!!!!!!
« on: June 24, 2005, 12:49:17 AM »
I have a very interesting question/case for anyone who feels up to a VERY SERIOUS question. Here is an excerpt from a contract (real) that I would like clarification on its meaning, or at least your interpretation.

It is a contract written to sell property.

Selling price = $129,500
Prorated Taxes = $800
Transfer Tax = $129.50
3% of 129500 = $3885

"c. All costs to be paid as follows:
    Seller to pay closing costs up to 3% of selling price, to include all costs associated with section d. below

d. Taxes will be prorated as of the date of closing. Seller to pay Georgia real estate transfer tax."

The rest of the contract is standard, but hte dispute lies in the actual amount that the buyer and the seller will "bring" to the table.

I would like anyone who is interested, using the dollar amounts listed, to give me their best interpretaton of contract and how much both the seller and buyer should be responsible.

Thanks ;)
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karl marx

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Re: CONTRACTS QUIZ!!!!!!!!!!!!!!!!!!
« Reply #1 on: June 24, 2005, 12:56:44 AM »
wouldn't the seller just be responsible for 129.50 + whatever any other non-mentioned closing costs come to, with an ultimate limit of 3885...and the buyer be responsible for everything else?  is there something I'm missing here?

ndiver

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Re: CONTRACTS QUIZ!!!!!!!!!!!!!!!!!!
« Reply #2 on: June 24, 2005, 01:15:53 AM »
wouldn't the seller just be responsible for 129.50 + whatever any other non-mentioned closing costs come to, with an ultimate limit of 3885...and the buyer be responsible for everything else?  is there something I'm missing here?


No... it isn't tricky but I just wanted to see if anyone else saw it my way. This is the contract I signed to sell my house and the buyer is trying to tell me that I have to pay 3885, in addition to the transfer tax and prorated taxes, becuase they are "usually paid by the seller." The funny thing is that the closing attorney agrees with the buyer and since I have yet to go to law school, I figured I would go fishing for other people's ideas.

Do you see how it might be interpreted any other way?

Any advce wuld be greatly appreciated.
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bruin

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Re: CONTRACTS QUIZ!!!!!!!!!!!!!!!!!!
« Reply #3 on: June 24, 2005, 02:57:34 AM »
looks to me that you pat the prorated taxes ($800) + the transfer tax ($129.50) = $929.50
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Highway

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Re: CONTRACTS QUIZ!!!!!!!!!!!!!!!!!!
« Reply #4 on: June 24, 2005, 09:02:17 AM »
"c. All costs to be paid as follows:
    Seller to pay closing costs up to 3% of selling price, to include all costs associated with section d. below

d. Taxes will be prorated as of the date of closing. Seller to pay Georgia real estate transfer tax."

It does appear that section c specifically includes any costs in section d as part of the "up to 3%." I think you have a case to argue. Unfortunately, it is poorly written and does leave some room for the other viewpoint, as well.

Are you and the buyer both using the same attorney? I would have it looked at by a separate attorney (unless that would cost more than just paying it).

You may also want to consider the cost of not paying it. Is the buyer likely to be somebody to smear your name around the internet if you don't pay it? Are they likely to come back at you later and complain that you didn't disclose information regarding the house? In the grand scheme of things, is $929.50 enough to cause you all the headaches and stress that could come with fighting it?

All that said, where the heck can I buy a house for $129,500? I can't find anything decent under $300k around my area! :)

Perversely

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Re: CONTRACTS QUIZ!!!!!!!!!!!!!!!!!!
« Reply #5 on: June 24, 2005, 09:43:44 AM »
I have a very interesting question/case for anyone who feels up to a VERY SERIOUS question. Here is an excerpt from a contract (real) that I would like clarification on its meaning, or at least your interpretation.

It is a contract written to sell property.

Selling price = $129,500
Prorated Taxes = $800 (has this been paid?) 
Transfer Tax = $129.50 (seller)
3% of 129500 = $3885 (seller)

"c. All costs to be paid as follows:
    Seller to pay closing costs up to 3% of selling price, to include all costs associated with section d. below

d. Taxes will be prorated as of the date of closing. Seller to pay Georgia real estate transfer tax."

The rest of the contract is standard, but hte dispute lies in the actual amount that the buyer and the seller will "bring" to the table.

I would like anyone who is interested, using the dollar amounts listed, to give me their best interpretaton of contract and how much both the seller and buyer should be responsible.

Thanks ;)

hmmm.  well, it looks to me like the one thing that is in dispute is the prorated tax amount.  The seller can be responsible for 3885 + 129.50.

IF the prorated tax amount has already been paid by the seller, then the buyer needs to pay the amount that HAS NOT BEEN PAID ONLY.

from my VERY LIMITED knowledge of real estate law, i think when you or the bank that holds the title pays your property taxes every 6 months, the amount that has not been used by the owner/the seller, needs to reimbursed to the seller & the BUYER/THE PERSON WHO INTENDS ON ACTUALLY PURCHASING THE property pays the portion of the property taxes that will be due for the remaining time remaining in that 6-month period?

so, my understanding of what a contract is, is that it is an agreement with an intent to exchange a good or service.

the good/product in this case, may be a house.

so my final answer is that the seller will pay 3885, plus 129.50 and the buyer is responsible for $129,500, plus any additional property tax due within the 6-month period and closing costs that exceed the 3885 amount.

i have no idea.

PresClay_00

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Re: CONTRACTS QUIZ!!!!!!!!!!!!!!!!!!
« Reply #6 on: June 24, 2005, 10:08:24 AM »
wouldn't the seller just be responsible for 129.50 + whatever any other non-mentioned closing costs come to, with an ultimate limit of 3885...and the buyer be responsible for everything else?  is there something I'm missing here?


No... it isn't tricky but I just wanted to see if anyone else saw it my way. This is the contract I signed to sell my house and the buyer is trying to tell me that I have to pay 3885, in addition to the transfer tax and prorated taxes, becuase they are "usually paid by the seller." The funny thing is that the closing attorney agrees with the buyer and since I have yet to go to law school, I figured I would go fishing for other people's ideas.

Do you see how it might be interpreted any other way?

Any advce wuld be greatly appreciated.

they're right - i work in a RE firm and this is how it's done.  transfer (deed) tax and prorated taxes through the day that you own it are seller's fees.

burghblast

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Re: CONTRACTS QUIZ!!!!!!!!!!!!!!!!!!
« Reply #7 on: June 24, 2005, 10:21:39 AM »
My interpretation is that the seller is responsible for $929.50.

PresClay_00

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Re: CONTRACTS QUIZ!!!!!!!!!!!!!!!!!!
« Reply #8 on: June 24, 2005, 10:23:18 AM »
plus the agreed upon 3% of closing costs (which covers lending fees, atty fees, etc)

burghblast

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Re: CONTRACTS QUIZ!!!!!!!!!!!!!!!!!!
« Reply #9 on: June 24, 2005, 10:28:35 AM »
This is the contract I signed to sell my house and the buyer is trying to tell me that I have to pay 3885, in addition to the transfer tax and prorated taxes, becuase they are "usually paid by the seller."

The wording is pretty explicit:

"Seller to pay closing costs up to 3% of selling price, to include all (taxes)"

It obviously does not mean $3885 PLUS taxes.  The only way I can see you owing more than $929.50 is if there are other closing costs besides the taxes.  Are there?  How much are they?  That's the real question here.  If there are $3885 in other closing costs besides taxes, then I see where the debate arises, because the contract has seemingly contradictory guarantees of the taxes being included in the seller's costs and the seller's costs being capped at $3885. By omiting the total closing costs, you have left us with insufficient information to evaluate your liability.