Should I Have My Attorney Review My Real Estate Contract

The classic answer..."that depends" is the wrong answer! Of course you should have an attorney, a real estate attorney that is, review your purchase and sale agreement if that makes you more comfortable.

Here's why. In Washington State, real estate licensees have been granted "dispensation" by our state legislature to fill in the blanks on pre-printed real estate forms that have been prepared and/or reviewed by an attorney. The forms I use are prepared by the Northwest Multiple Listing Service and meet this requirement. Other MLSs (Spokane and Vancouver for example) also meet this requirement as well as pre-printed forms available through the Washington REALTORS. However, when a licensee alters the wording or adds text free-hand, that licensee is now practicing law since a purchase and sale is a legally binding contract. This means the licensee will be held to the standard of a practicing attorney. Warning -- RISK! So the question is..."how much risk are you, as a buyer or seller, willing to take?"

If you're involved in a real estate transaction, your REALTOR should advise you of the rules for completing a purchase and sale agreement. And mention that it may be appropriate for you to consult an attorney to review your documents. Don't be surprised if your REALTOR won't interpret the wording since that too is considered practicing law.

Since attorneys bill by the hour, as do many other professionals, have all your paperwork available as well as your list of questions. Your attorney is only as good as the facts and pertinant information you volunteer about your situation and the pre-preparation you've undertaken.

The Five Factors of Credit Scoring

MyFico.com has shared information regarding their credit scoring model. These five factors most directly affect your credit score.

1. Payment History has a 35% impact. Paying our debts on time and in full has a positive impact, and late payments, judgments and charge-offs have a negative impact.
2. Outstand Credit Balances have a 30% impact. Debt ratio of outstanding balance to available credit is important. Keeping that below 50% is wise and below 30% even better. It is never a good idea to close an account because the debt ration will go up and the number of seasoned lines will decrease.
3. Length of Credit History has a 15% impact. The length of time a particular credit line has been opened is important. A seasoned borrower is stronger. Opening new credit cards will decrease the average length and therefore hurt this portion of the score.
4. Type of Credit has a 10% impact. A mix of auto loans, credit cards and mortgages is positive, rather than a concentration of credit cards only. Be careful when applying for credit at a store that is not a department store. The credit agencies frown on cards for more specialized stores where you're likely to only make one purchase which equates to desperation.
5. Inquiries have a 10% impact. Hard inquiries for credit will negatively impact your score. Auto and mortgage inquiries receive special treatment and 20 inquiries can be made in a 14-day period for auto or mortgages and will be treated as only one inquiry. The maximum number of inquiries that will reduce your score is 10. Any inquiries beyond that in a six month period will have no further impact. Each hard inquiry can cost 2-50 points on your credit score.

Click here for more information on credit scoring. If you would like more information on credit counseling from the U.S. Department of Housing and Urban Development, then click here.