Ryan Shaughnessy, Broker/Attorney - Your Lafayette Square Real Estate Partner

Over 70% of claims asserted against real estate agents arise regarding disputes regarding defects in or physical conditions of the property sold that impact the value, desirability or use of the property. Seller's disclosure statements, if handled correctly (as explained below), are an effective means to reduce and manage the risks associated with misrepresentation and non-disclosure claims.

The reason that seller's disclosure statements are effective is because they require sellers to make affirmative representations regarding the condition of the property and because they put the purchaser on notice of potential defects or physical conditions of the subject property thereby placing the purchaser on notice and requiring the purchaser, after being placed on notice, to independently investigate the conditions of the property prior to the purchase. These two simple facts serve as strong defenses to claims asserted against listing agents predicated on negligence, intentional misrepresentation and fraud.

What Must Be Disclosed to Purchasers - Evolution from Caveat Emptor to Full Disclosure

The general rule in the sale of residential real estate was "caveat emptor" - that is, buyer beware. However, since then, the trend has been to impose on the seller and/or the listing agent the duty to disclose "materially adverse facts" regarding the property to purchasers. Initially, these disclosures were limited to defects in the property or physical conditions of the property and included such items as the condition of such items as:

•· Heating, Cooling and Ventilation

•· Fireplaces

•· Plumbing System, Fixture and Equipment

•· Appliances

•· Electrical Systems

•· Roof, Gutters and Downspouts

•· Water and Sewerage

•· Construction Methods

•· Basements and Crawl Spaces

•· Termites/Wood Destroying Insects

•· Soil and Drainage

Subsequently, the scope of the disclosures was expanded to include items relating to hazardous or potentially hazardous substances and other environmental and health concerns existing in or located within the property such as:

•· Lead Paint

•· Asbestos Materials

•· Mold

•· Radon

•· PCBs

•· Underground Fuel Tanks

•· Unused Septic or Other Storage Tanks

Again, the scope of disclosures evolved to include items that were not within the four corners but had an impact or potential impact on value, desirability or use of the property, including off-site conditions such as:

•· Electro-magnetic Fields from Overhead Lines

•· Highway Noise

•· Airport Noise

•· Off-Site Groundwater Contamination

•· Natural Disaster Hazards such as Flooding, Hurricane Zones, Mudslides, and Fires

•· Proximity to Off-Site Landfills and Hazardous Waste Sites

In addition, finally, the most recent trend has been to expand the scope of the disclosures to require the disclosure of "status" issues associated with the property or the current and prior occupants of the property and include such items as:

•· Disclosure of Methamphetamine Production on Property or Conviction of Current or Prior Occupant for Drug-Related Offenses

•· Megan's Law Disclosures regarding Proximity to Known Sexual Offenders or Notice of the Availability of Statewide Database.

•· Existence of Insurance Claims or Other Issues relating to the Insurability of the Property

Although some states have comprehensive mandatory disclosure requirements, other states provide little guidance and address the issue of what must be disclosed by the owner and/or listing agent on an ad hoc basis, including periodic statutory enactments and case law involving judicial interpretation of these statutes.

In Missouri, there are few mandatory disclosure requirements - except the federally mandated lead paint disclosures and disclosures regarding methamphetamine production[i] and the location of solid waste and construction landfills.[ii] Occasionally, often in response to judicial decisions, state legislatures may enact legislation that specifically exempts certain items from mandatory disclosure such as psychologically impacted property due to infamous crimes, HIV infection or death.[iii]

Who Must Make the Mandatory Disclosures

The issue of who must make the disclosure depends on the law that imposed the disclosure requirement. Disclosure requirements vary from state to state and even from county to county or city to city within a state. Each real estate professional should carefully review federal and state laws, rules and regulations and county or municipal ordinances, rules and regulations to determine what disclosures are required and who is responsible for making the disclosures.

Notwithstanding the source of the requirement for specific mandatory disclosures, licensing statutes often impose upon the listing agent to disclose "adverse material facts" relating to the property. All too often, this phrase is not defined or, equally as bad, simply refers to items required to be disclosed by law. Because of these general "catch-all" provisions, state and local associations often have drafted and provided to their members standardized disclosure forms. In addition, real estate brokerages often require sellers to provide a seller's disclosure statement - whether the owner has a duty to disclose these items or not - as a condition of taking the listing.

However, some licensing statutes provide a "safe harbor" that clearly provide that the listing agents have no affirmative duty obligation to either conduct an independent investigation relating to the items disclosed by the owner/seller or verify the accuracy or completeness of the information provided or otherwise disclosed by the owner/seller.[iv]

How Listing Agents Can Avoid Potential Liability

Seller's disclosures are an effective tool for limiting liability - when handled properly. Here are some suggested best practices to avoid potential liability for the non-disclosure or misrepresentation of "adverse material facts" relating to a property listed for sale, to wit:

•· Review all applicable federal, state and local laws, rules and regulations to identify what must be disclosed to potential purchasers.

•· Provide specific instructions to the owner/seller to fully and accurately disclose any physical defect or condition, on-site or off-site, which may adversely impact the value, desirability or use of the property or which may pose a health or safety issues to future occupants of the home. Explain to the owner/seller the importance of making full and complete disclosures as well as the potential liability that may arise because of incomplete, inaccurate or misleading statements in the seller's disclosure statement.

•· Provide a cautionary statement to the owner/seller that the standardized disclosure form is intended to assist the owner/seller in meeting their disclosure obligations and that the owner/seller should disclose any other or additional item that they believe may adversely impact the value, desirability or use of the property or which may pose a health or safety issues to future occupants of the home. When in doubt as to whether disclosure is required or not, err on the side of making the disclosure.

•· Do not prepare the seller's disclosure statement. Have your client's hand write the answers or otherwise provide the requested information. Retain a copy of the handwritten form in your files. Revise the seller's disclosure statement to condition or explain the disclosure such as "Owner/Seller has not previously occupied the residence" or "During their occupancy of the residence, Owner/Seller has not observed..." Review the specific language with the owner/seller.

•· When transmitting the disclosure statement for execution, provide a cautionary statement to the owner/seller that the accurate and complete disclosure of physical defects and conditions is important to minimize and defend against possible future claims made or asserted by the purchaser.

•· Before you disseminate the disclosure statement to a prospective purchaser, inspect the property. Look for telltale signs or red flags of prior problems such as water stains, freshly painted areas, obstructed areas, etc. Examples of red flags provided by the National Association of Realtors website include:

•· If you see any telltale signs or red flags indicating prior problems, make specific inquiries to the owner/seller regarding the potential or perceived problem. Document the owner/seller's response by sending a confirming e-mail summarizing the conversation. Retain a copy of the e-mail or other correspondence in your file.

•· If a prior repair is disclosed on seller's disclosure statement, request supporting documentation regarding the repair or any warranty associated with the repair from the owner/seller.

•· Where appropriate, suggest to the owner/seller that they retain a building inspector to conduct a building inspection prior to the listing of the property for sale so that the potential problems can be repaired before the property is listed for sale. Verify that pre-listing repairs are documented and accurately disclosed to the prospective purchaser. The resolution of problems prior to listing can lead to a quicker sale at a higher price.

•· If the property was previously listed for sale (either by the current or former owner), request a copy of the prior seller's disclosure statement from the owner/seller or from the prior listing agent. Often, you can locate a copy of prior seller's disclosure statement by reviewing the prior listing in the local MLS. If an offer was previously accepted and the sale did not close, request a copy of the building inspection report or municipal occupancy inspection report. Compare the prior seller's disclosure statement and/or the prior building inspection to identify inconsistencies.

•· Stay within your area of expertise. Although you are expected to recognize problems or conditions by the exercise of your professional judgment, you are not a home inspector and do not have the expertise to assess the scope of the problem or provide information on suggested repairs or costs.

•· Do not make any statements regarding the condition of the property that prospective purchasers will rely upon in making their decision to purchase. If you do make such a statement, make sure that the statement is factually accurate and complete.

•· If you do not know an answer with certainty, simply state that "you don't know", make the appropriate inquiry to the seller, and transmit the owner/seller's response to the prospective purchaser. Where appropriate, send a confirming e-mail to the prospective purchaser containing limiting or cautionary language such as the "The owner/seller reports that... I am not a building inspector and would strongly suggest that you conduct a building inspection of the property to verify..."

•· Do not offer opinions on soundness of components (e.g. "roof is in great shape), the quality or adequcey of repairs (e.g. "roof was recently repared and there are no problems") or predictions on future events such as "The roof was replaced last fall and should last 20 years."

•· Document your file regarding conversations or discussions with the owner/seller or prospective purchaser regarding the condition of the property. Where appropriate, document your file by sending a confirming e-mail summarizing the conversation or reinforcing cautionary statements made in person. When a dispute arises, you may have a different recollection of the events.

•· If you are a buyer's agent or a dual agent, recommend in writing to the purchaser that they retain and employ a building inspector or other expert to inspect, review and evaluate the condition of the property. If the purchaser declines to make an inspection, send a confirming e-mail explaining that seller's disclosure statement simply reports known conditions reported by the owner/seller and is not a warranty that the condition does not exist or will not occur in the future. Explain the risks associated with purchasing a home without a building inspection. Specifically explain that other inspections are conducted for different purposes and should not be relied upon by the purchaser. For example, the occupancy or municipal inspection or appraisal inspection are performed for different purposes and may not be as rigorous as a building inspection. In addition, the building inspection may not cover specific components like the roof or sewer laterals.

•· Recommend that the owner/seller offer or, in the alternative, that the purchaser purchase a home warranty. If the seller refuses to provide or a purchaser declines to purchase a home warranty, send a confirming e-mail explaining that seller's disclosure statement simply reports known conditions reported by the owner/seller and is not a warranty that the condition does not exist or will not occur in the future. Explain the risks associated with purchasing a home without a home warranty. Also, explain the limitations on what is covered by the warranty.

Conclusion

Seller's disclosure statements provide an important tool for limiting potential liability. However, you can't turn a blind eye and ignore known problems or defects. When in doubt disclose. Stay within your field of expertise. Always document your file. By following these simple rules, you can avoid the costly defense associated with non-disclosure claims.

Note: The opinions and statements contained herein represent my personal opinions and observations. These blog entries are not reviewed, endorsed or approved for publication by Gilded Age Sales, LLC.

Disclaimer: The author is a licensed attorney. However, the opinions and statements contained herein are for informational and discussion purposes only and shall not constitute the provision of legal advice. Nothing contained herein shall establish an attorney-client relationship. Readers are cautioned to seek legal counsel in their state before using or relying upon any of the information contained herein.

[i] Section 442.606 R.S.Mo. (2008) provides, in toto, as follows: "1. In the event that any parcel of real property to be sold, exchanged or transferred is or was used as a site for methamphetamine production, the seller or transferor shall disclose in writing to the buyer or transferee the fact that methamphetamine was produced on the premises, provided that the seller or transferor had knowledge of such prior methamphetamine production. The seller or transferor shall disclose any prior knowledge of methamphetamine production, regardless of whether the persons involved in the production were convicted for such production. 2. A seller or transferor of any parcel of real property shall disclose in writing the fact that any premises to be sold or transferred either was the place of residence of a person convicted of any of the following crimes, or was the storage site or laboratory for any of the substances for which a person was convicted of any of the following crimes, provided that the seller or transferor knew or should have known of such convictions: (1) Creation of a controlled substance in violation of section 195.420, RSMo; (2) Possession of ephedrine with intent to manufacture methamphetamine in violation of section 195.246, RSMo; (3) Unlawful use of drug paraphernalia with the intent to manufacture methamphetamine in violation of subsection 2 of section 195.233, RSMo; (4) Endangering the welfare of a child by any of the means described in subdivision (4) or (5) of subsection 1 of section 568.045, RSMo; or (5) Any other crime related to methamphetamine, its salts, optical isomers and salts of its optical isomers either in chapter 195, RSMo, or in any other provision of law.

[ii]Section 260.213 R.S.Mo. (2008) states, in pertinent part, that "No person may knowingly sell, convey or transfer title to any property that contains a permitted or unpermitted solid waste disposal site or demolition landfill, without disclosing to the buyer early in the negotiation process the existence and location of the site. The seller shall also notify the buyer that he may be assuming liability to the state for any remedial action at the site, except that the sale, conveyance or transfer of property shall not absolve any person responsible for the illegal disposition of solid waste, including the seller, of liability for any remedial action at the site."

[iii] Section 442.600 R.S.Mo. (2008) states, in toto, as follows: 1. The fact that a parcel of real property, or any building or structure thereon, may be a psychologically impacted real property, or may be in close proximity to a psychologically impacted real property shall not be a material or substantial fact that is required to be disclosed in a sale, exchange or other transfer of real estate. 2. "Psychologically impacted real property" is defined to include: (1) Real property in which an occupant is, or was at any time, infected with human immunodeficiency virus or diagnosed with acquired immune deficiency syndrome, or with any other disease which has been determined by medical evidence to be highly unlikely to be transmitted through the occupancy of a dwelling place; or (2) Real property which was the site of a homicide or other felony, or of a suicide. 3. No cause of action shall arise nor may any action be brought against any real estate agent or broker for the failure to disclose to a buyer or other transferee of real estate that the transferred real property was a psychologically impacted real property.

[iv] Section 339.190 R.S.Mo. (2008) states, in toto, as follows: 1. A real estate licensee shall be immune from liability for statements made by engineers, land surveyors, geologists, environmental hazard experts, wood-destroying inspection and control experts, termite inspectors, mortgage brokers, home inspectors, or other home inspection experts unless: (1) The statement was made by a person employed by the licensee or the broker with whom the licensee is associated; (2) The person making the statement was selected by and engaged by the licensee; or (3) The licensee knew prior to closing that the statement was false or the licensee acted in reckless disregard as to whether the statement was true or false. 2. A real estate licensee shall not be the subject of any action and no action shall be instituted against a real estate licensee for any information contained in a seller's disclosure for residential, commercial, industrial, farm, or vacant real estate furnished to a buyer, unless the real estate licensee is a signatory to such or the licensee knew prior to closing that the statement was false or the licensee acted in reckless disregard as to whether the statement was true or false. 3. A real estate licensee acting as a courier of documents referenced in this section shall not be considered to be making the statements contained in such documents.

Buyer Beware - Purchase of Homes by Non-Traditional Families

Joint ownership of residential real estate by unmarried individuals is increasingly common. Recent census figures indicate that there are over 6.5 million unmarried cohabitating couples in the United States. Gay couples, elderly couples, heterosexual couples deferring marriage (divorced or otherwise), and couples purchasing homes prior to marriage have all contributed to this growing trend. This shift in the dynamics of the family has inserted a new issue in real estate sales that was generally not addressed or widely discussed prior to the 1990s. If you are purchasing a new home and you are not married, then you need to be aware of the unique problems associated with such a purchase. The problems are not insurmountable. However, they require adequate planning to establish a suitable exit strategy.

Sex and the City - Fictional Accounts of the Pitfalls of Cohabitation

In the recently released movie "Sex and the City," there are multiple examples of the pitfalls associated with cohabitation. It is an example of art (well maybe not art) imitating life. Here are two examples of the pitfalls of cohabitation shown in scenes from the movie:

• Titling Property in One Person's Name: Samantha and the girls attend a jewelry auction. When they are in the bathroom, they learn that the woman who owned the jewelry had lived with a man for 10 years (but wasn't on the title to the property). She came home one day and was locked out of their home. So the woman is forced to auction off the jewelry to make ends meet.

In this example, the issue revolves around the right to possess and occupy the residence. If you are a non-owner cohabitant, your right to access, possess and occupy the property is limited. Whether you have even the protections of a tenant, it is going to depend on your agreement and the laws of your state. The owner of the property can effectively exclude the non-owner cohabitant from the property. It really isn't a matter of if - it is a matter of when.

• Joint Ownership of Property: Big and Carrie jointly rent/buy an apartment in Manhattan. When Big leaves Carrie at the altar, Big is left with an apartment that is unoccupied. Presumably, given Carrie's penchant for shoes, Big is left to pay the rent/note for the apartment.

This example shows another side to this issue. It is equally possible that an owner cohabitant decided to purchase the home based on the promise that the non-owner cohabitant or joint owner would provide or contribute some financial or in-kind contribution to the household. When the non-owner cohabitant or joint owner says "I'm done", then the owner cohabitant may be faced with a mortgage that he or she simply cannot afford alone. The end result may be foreclosure, bankruptcy and/or the impairment of credit.

The examples above are just two of the many examples of what can go wrong. When a personal relationship ends, it is never easy. It is emotionally charged. From a financial standpoint, it can be catastrophic. Even if you are a joint owner, you may have no ability to sell the property without the consent of the other joint owner. Think about that - one person can hold the property hostage. If there is a disparity of income, assets or credit worthiness, one party may have more to lose than the other party.

How to Untangle the Mess of Joint Ownership

In most states, after a relationship goes bad and a property dispute arises, unmarried individuals who are joint owners have the right to file a partition lawsuit seeking the partition of the property (ie. physical division of the property in two separate parcels - works well for farmland) or, if partition is not feasible (e.g. a single family residence), ordering the forced sale of the property. However, forced sales in partition lawsuits do not maximize the value of the property and usually involve a sale subject to the existing mortgage. As a result, the bids are substantially reduced and factor in the risk that the lender will foreclose under the due on sale provision. More importantly, there is a loss of control. In most states, the judge in the partition simply has no power to distribute the property to one party or to order one of the party's to buy the other party out. The only remedy is usually to partition the property or to order its sale by public vendue (ie. auction on courthouse steps).

However, the outcome does not have to be to left to chance. It does not have to be drastic (ie. forced sale) or inflexible (ie. no award of the property), For joint owners, what happens next is going to depend on how the property is titled and what steps the parties have taken to define their rights, obligations and responsibilities. We strongly suggest that you seek LEGAL ADVICE to determine how to the title a home PRIOR TO ITS PURCHASE. In most cases, it can be as simple as drafting a cohabitation agreement to address potential issues that may arise in the future. These type of agreements are the non-married individual's version of a married person's prenuptial agreement.

How to Title the Property

Before you can select how the property should be titled, you need to identify the issues and problems that often arise when unmarried individuals purchase a home jointly. Here are some the issues and potential problems:

• Distribution of Property upon Termination of Relationship: If you are married, divorce proceedings allow for an orderly and efficient method to distribute joint property. One of the spouses can be awarded the home. For unmarried couples, the only mechanism is a partition suit. Under most state laws governing partition suits, the judge lacks the ability to award the home to one of the owners. Rather, the sole remedy that a judge can impose is the division of the property by partition (if it is a property like a farm that can be physically divided) or by ordering the sale of the property (if the property cannot be divided). In such a lawsuit, a judge can award one of the unmarried owners a monetary award for expenses incurred for capital improvements, maintenance or other costs associated with the property such as payment of the mortgage, insurance and taxes. Often, these claims for contribution asserted by one owner for hard expenses is countered by a claim that there was some oral agreement that the non-contributing owner was providing in-kind household services or paying other expenses not related to the property. Without a written agreement, it becomes a "he said... she said" contest. Depending on the state and even the judge, these in-kind services claims may or may not be recoverable.

• Distribution of Property upon Death of Owner: If you are married, title to a property is often taken by "tenants by the entirety". This means that upon the death of one's spouse the property automatically transfers to the surviving spouse. For unmarried persons, title can be held either as "tenants in common" or as "joint tenants with right of survivorship." The choice can be extremely important. If the property is held as tenants in common, the interest of the deceased owner passes to his or her beneficiaries by will or by intestate succession. In contrast, if the property is held as joint tenants with right of survivorship, the interest of the deceased owner passes to the surviving owner upon the filing of an affidavit of death and a copy of the death certificate. This decision involves both estate planning and tax issues. If the issue is ignored and not addressed by a carefully drafted estate plan, there is potential for an emotion-laden confrontation between the surviving owner and the heirs of the deceased partner. More importantly, these forms of ownership offer essentially an all or nothing approach and are inadequate to address concerns of the deceased owner to provide for the surviving owner as well as his or her children, heirs and other beneficiaries. Even if the parties create separate wills and trusts to address the issue, wills and trusts can be revoked and beneficiaries changed at any time. Unfortunately, this important decision is often made with little or no reflection. The decision is often based on a summary description provided by the real estate agent or title agent without the assistance and advice of a licensed attorney.

• Voluntary Transfer: Even where the unmarried individuals are able to agree on the terms of a "buy out" or other disposition of the property, it is not as simply as conveying ownership of the property by deed to the other property. Lenders are almost uniformly unwilling to remove or otherwise release a joint owner from the mortgage. In addition, if the transfer is made without the mortgage being paid (by voluntary payment or by refinancing), the conveyance of the property may violate the "due on sale" clause of the mortgage and may result in the acceleration of the debt owed under the terms of the promissory note. In addition, even if the lender doesn't learn of the transfer, the simple transfer of ownership of the property does not relieve the former owner of his or her obligations under the note relating to the repayment of the mortgage. Until the mortgage is paid, the former owner will have his or her ability to obtain additional credit for a separate mortgage impaired and will expose his or her credit rating to damage if the other owner later defaults on the loan or even makes late payments on the loan.

• Abandonment and Refusal to Convey Ownership: Under the mortgage, each owner is generally jointly and severally liable for the loan. That means that each party is personally obligated to pay the entire loan. If one party simply walks away and abandons the property, the remaining owner remains obligated and can be held responsible for paying the entire outstanding balance due on the mortgage.

• Equity Lines of Credit: If you have a line of credit or home equity loan, the line of credit should be immediately terminated. If it isn't, there is nothing to prevent one owner from drawing on the line and expending the funds thereby increasing the debt owed by the other owner.

• Liability Issues: Depending on state law, the form of ownership or lack of ownership (if the property is titled in the name of one cohabitant) will govern whether a creditor of one of the owners can execute against the property to satisfy or collect the debt of one owner. Tenancy in common will generally provide some limited protection to the other non-debtor owner; joint tenancy typically does not.

Here is a summary chart comparing the different forms of ownership:

Note: This table is for general information only. Your state law may vary.

Cohabitation Agreements

Whether a home is purchased by one party or jointly purchased by both parties, the "Sex and the City" type problems can be avoided by the use of a carefully drafted cohabitation agreement that clearly defines both the rights and obligations of each party. These type of agreements are akin to prenuptial agreement for married couples. However, just like prenuptial agreements, unmarried couples are often overwhelmed by their relationship and don't think about everything that could happen if and when the relationship goes bad. It is a delicate issue that most people simply choose to ignore. However, by doing so, the financial future of both individuals is left to chance and is jeopardized.

Here are some issues that should be addressed before drafting or signing a cohabitation agreement:

• Enforceability: Are cohabitation agreements enforceable in the jurisdiction where the property is located? Are any of the terms of the cohabitation agreement unenforceable as against public policy?

• Separate Legal Counsel: Although a single attorney can draft the cohabitation agreement with a waiver of potential conflicts of interests by the client, the better practice is to have the cohabitation agreement separately reviewed by each party's own legal counsel.

• Overreaching and Misrepresentation: To increase the likelihood of the enforceability of a cohabitation agreement, it is important that both owners make an informed and voluntary decision to execute the agreement. Possible grounds for invalidation include: duress, coercion, misrepresentation, undue influence, inequality of bargaining power, etc.

• Terms of Agreement:

o Accurately describe who made the initial down payment and the source of these funds.

o Establish a separate bank account to be used only for the payment of the mortgage, real estate taxes, insurance and capital improvements.

o Clearly define who is responsible for the payment of the mortgage, real estate taxes, insurance and capital improvement.

o Establish a procedure or otherwise grant an option for one party to buy-out or otherwise purchase the interest of the other party. Clearly describe the circumstances under which the option can be exercised.

o Establish a procedure for the listing and sale of the property as well as a schedule as to how the proceeds from the sale will be distributed. Clearly describe any and all credits that a person may be entitled to receive for maintenance or other home repairs or for household expenses not associated with the property.

o Establish a procedure for how decisions regarding capital improvements, maintenance and repairs will be made and whether or not unauthorized capital improvements, maintenance or repairs will receive a credit in future distributions if the home is sold.

o If the distribution is based on the amount contributed towards the mortgage, real estate taxes, insurance, etc., keep a ledger or balance sheet describing the amount contributed by each party. Review this account on an annual or other periodic basis and establish a procedure whereby the parties acknowledge and agree in writing as to the entries into the ledger or the amounts to be received upon the sale of the property.

o In addition, describe how personal property and other joint assets will be divided in the event that the relationship ends.

o Establish a procedure such as arbitration for the resolution of disputes in an expedited manner. Specifically authorize the arbitrator to divide or otherwise award real property and personal property to the parties.

o Establish a mechanism for the prompt enforcement of an arbitration award including irrevocable powers of attorney permitting a third party to execute listing agreements, sales contract, deeds, and other documents as necessary to effectuate an arbitration award.

• Legal Review: Retain a licensed attorney to review both the cohabitation agreement and your estate plan to insure that there are no conflicts or inconsistencies in the their terms and to verify that these agreements effectuate the intent of the parties.

Conclusion

There are many pitfalls associated with the purchase of a home by unmarried couples. With planning, many of the potential problems or risks can be addresseed or at least minimized. Don't go it alone. Seek the advice of a qualified real estate, family law and/or estate planning attorney. Although potential tax issues are not addressed in this post, you should also seek the advice of a qualified tax professional to address such issues as gifts, capital gains and stepped up basis.

Note: The opinions and statements contained herein represent my personal opinions and observations. These blog entries are not reviewed, endorsed or approved for publication by Gilded Age Sales, LLC.

Disclaimer: The author is a licensed attorney. However, the opinions and statements contained herein are for informational and discussion purposes only and shall not constitute the provision of legal advice. Nothing contained herein shall establish an attorney-client relationship. Readers are cautioned to seek legal counsel in their state before using or relying upon any of the information contained herein.

MARKET SUMMARY: Lafayette Square is a fashionable neighborhood in high demand in the City of St. Louis.

SUPPLY: It is an established neighborhood with restricted supply. It has fixed boundaries and has little vacant land for new construction projects. Growth in supply is limited to in-fill and conversion projects.

DEMAND: Contrary to national trends, the Lafayette Square submarket has outperformed the broader St. Louis and national markets in both sales volume and price appreciation. Sales growth has increased an average 18% per year and the median price has increased an average 19% per year over the last 3 years.

TREND: Prices have stabilized with little or no change in CDOM from prior years. Use of sales incentives should phase out as supply tightens. For 2008, the median price has increased to $283,000 up 16% over 2007 with the highest sale being $988,490.

SOURCE DATA: The information shown in the data graphs is compiled from Zillow.com using its Zillow Index that tracks reported sales. The information contained in the tables is from the local MLS.

The internet is an amazing tool. It certainly can be used to bridge the "information gap" for first-time homebuyers. However, the sheer number of websites can cause "information overload." Because of the number of websites, I am hesitant to recommend just one. However, for first-time homebuyers, I would start with mohomeprograms.com, a website sponsored by the Missouri Association of Realtors.

First, the website has a very good Q&A covering 100 common questions asked by first-time homebuyers. The questions are grouped into 10 sections which are easy to navigate. The questions are grouped as follows:

• Part I Getting Started

• Part II Finding Your Home

• Part III You've Found It

• Part IV General Financing -- Questions:The Basics

• Part V First Steps

• Part VI Finding The Right Loan For You

• Part VII Closing

• Part VIII How Can HUD And The FHA Help Me Become a Homeowner?

• Part IX Mortgage Insurance

• Part X FHA Products

It also has a very good glossary of common real estate terms as well as a basic mortgage calculator.

Second, it has a search engine that matches the prospect's financial circumstances with potential loan products. It provides a brief description of the loan product and the loan program's requirements. However, this feature has limited usefulness because it doesn't provide any sponsored links or otherwise advise the first-time homebuyer as to where to find the lender who offers the product discussed. However, it does at least advise a potential homebuyer that there is an appropriate program out there. This comment is not really a criticism. It is more a comment on the fact that it is difficult to track all of the possible loan products and effectively make referrals to qualified lenders.

Third, it has a search engine that provides information on assistance programs - both public and private - that may be of assistance to first-time homebuyers. I particularly like the fact that it provides a clearinghouse for information on local corporate sponsored housing programs. These programs are a hidden secret and it is great that there is a platform that assists local Realtors and purchasers in identifying such programs. Some of the many assistance programs included on the site are:

· Bank of America Associate Homeownership Program

· Cardinal Glennon Employer Assisted Housing Program

· Concordia Publishing House - Operation HOME

· Homeownership Assistance Program-St. Louis County

· Hometown SLU Program

· Justine Petersen Program

· MHDC First Place Loan (Cash Assistance Program)

• Washington University Employer Assisted Housing Program

Fourth, it has several sections on consumer education on such topics as credit scores and credit improvement, predatory lending, and healthy homes (e.g. radon, mold, lead paint, etc.).

I am extremely pleased with the overall site. However, I would like to see some minor changes. Here are some changes that I would like to see:

• Referral links to qualified lenders offer the products described in the search results.

• Revision dates on the loan products so I know if the information is current.

• Regular updates on homebuyer training seminars. It seems to indicate that seminars can be posted to the site. However, based on my use of the site, this section has never been updated.

• Information on how to become a "workforce certified specialist." There is a list of Realtors with the certification. However, there is no information on how to obtain such a designation. Even worse, the local and state association website had little or no information on the certification.

• Typographical error - but still - the reference to Montana Housing Resource Certified Realtor and Montana Housing Resource Certified Lender should be corrected.

• If you provide an e-mail for responding to inquiries, it should at least be monitored so that e-mails submitted receive some response to the inquiry.

There is a wealth of information contained on the site and it provides a good starting point. It is a great resource and I am proud to say that it is provided as a public service of the Missouri Association of Realtors.

If your state offers a similar website or if you have a great first-time home buyer website, please post it in the comments section.

Note: The opinions and statements contained herein represent my personal opinions and observations. These blog entries are not reviewed, endorsed or approved for publication by Gilded Age Sales, LLC.

INVITATION TO MONTHLY REALTOR LUNCHEON

Gilded Age Sales would like to invite local Realtors, members of the Active Rain community, and the general public to attend our Monthly Realtor Luncheon on November 11, 2008, from 11:00 a.m. to 1:00 p.m. This month's featured property is The Georgian (former City Hospital No. 1) located at 1515 Lafayette Avenue at the intersection of the Truman Parkway and Lafayette Avenue.

• * Sales Update on the Georgian - 85% Sold & Closed
• * Development Update - Phase 2 of the City Hospital
• Project including the Butler's Pantry
• * Market Trend Review - Lafayette Square
• * Announcement - Sales Incentives - November, 2008
• * Annoucement - Commission Programs for 2009
• * Tour of Featured Properties in Lafayette Square

Light lunch will be served. If you are planning to attend, please RSVP by sending e-mail to michelle@gilded-age.com.