Flippers: A perfect example of my earlier point
Flippers: A Perfect Example Of My Earlier Point OfferPad Incentivizes Realtors On May 7th, I wrote a post to help Sellers understand the pitfalls, THE
©2023 Home Sell And Save | All Rights Reserved
The Terms and Conditions section, pages 1-7, consists of:
This first section of the contract is the most critical as it demands the most attention and scrutiny before signing.
It is within this section that your Agent, along with you the Buyer, fills in various information and the accuracy of this information could be the difference between a stress free and very stressed transaction.
And this information needs to be clear and concise, so that in the event of a dispute, a Judge or Arbitrator will have a clear picture of everyones intent.
Here are some examples of things to watch for:
The agents job is pretty easy as they are only required to fill in the blanks. But the information entered must be correct and must be adhered too; or else!!!
The “Standards”, pages 7-11 is the Law. These 5 pages basically outlines some laws which govern the transaction and a number of duties each party is responsible for. And what happens when either party fails to uphold their obligations. Rarely do we see any changes to these pages, and really, any such change should be made only after consultation with an Attorney.
Another item for a more in-depth post, but this is a section which affords the Buyer and/or Seller to add additional terms not covered in the printed language of the Contract.
It could be as simple as stating that the buyer wants some personal property included in the deal or as legally complex as placing a duty on the Seller that the “As-Is” has failed to address or has done so erroneously.
For example, it has become a standard or typical addition to require the Seller to pay for the Closing Out of any building permits. The printed “As-Is” fails on this issue as it only requires a Seller assist with the process. And by assist, it means, signing of necessary documents. No financial responsibility.
But the reason you must be careful is that many Brokers have chosen to add additional terms, that often are harmful to the Seller. And I experienced this last year.
When an Agent with Keyes presented an offer for my clients Townhouse in Hypoluxo, Fl. the Additional Terms section of the “As-Is” contained language which gave the buyer the right, under certain circumstances, to cancel the contract and receive their full deposit, without any penalty. The problem was that this “right” could be exercised, only on the day of the Contracted Closing, but, up to 3 days after the Contracted Closing Date.
Thankfully, my client had hired an Attorney who 100% agreed with my opinion not to sign such a contract. It was ridiculous for anyone to believe that a buyer would agree to such terms. Imagine sitting at her Attorney’s office on the day of closing, with a moving truck loaded, and the deal dies. NOT!!!
I can assure you that if Keyes, as the Listing Broker, had received an offer with such language, they would absolutely fight to the bitter end to stop their Seller from signing.
This section also includes a list of Addendum’s and Disclosure which are separate documents, but become part of the “As-Is”.
These include some legally required Documents, like the Lead Based Paint Disclosure, Condo or Home Owners Association Disclosure’s, etc…
Or some like a Post or Pre-Occupancy Agreement, which are not required by Law, but are negotiated and agreed upon by the Parties.
Not much can go wrong here, as you are simply signing to create an effective and enforceable legally and binding Contract.
So before signing, it’s imperative that you ensure all the information is correct and accurate, and that you fully understand your duties and obligations.
Its also important to note that any language, printed or added under or after the signatures are NOT part of the contract. And therefore unenforceable. Check with an Attorney to make sure.
2 last points about signatures and signing the contract is, first, try to be the last party signing. Wether you are the Buyer or Seller, there are many advantageous to being the last party to review and create an Executed and Enforceable Contract.
And the second, is that you understand that there are only 2 parties to the “As-Is”: the buyer and the seller.
The Brokers and their Agents are NOT, I repeat, NOT a party to the contract, and anything placed in the contract which discusses any fees paid to either Brokerage, is UNENFORCEABLE. REMOVE IT!!! BEFORE SIGNING.
First a little background. When I first became licensed in 2003, the contract of choice provided the Buyers the right to inspect, but bound the Seller to credit the Buyer an amount equal to the cost to make repairs based on the findings of a Home Inspector; usually with a cap or limit.
The problem with that Contract, were the disputes which arose when a Seller disagreed with the Home Inspector. It was messy.
When the Mortgage Crisis hit in ’06, the Banks required the “As-Is” on all their Short Sales and Foreclosure Sales. The industry just continued using it because it is basically a you want or you don’t want it contract.
A buyer is afforded an opportunity to have the Home Inspected. The printed form allows 15 days for such inspections to be conducted, but typically this is negotiated down to 7-10 days, if not less.
After such inspections, the Buyer usually asks the Seller for a Credit, to cover the cost of some or all the repairs needed, or requests that the seller make the repairs prior to closing. So much for “As-Is”.
But unlike the other contract, the Seller now has the right to say yes, no or negotiate a lower number.
For example, with Insurance companies demanding newer roofs or higher premiums, a Buyer may ask the Seller to replace the roof prior to closing or credit the buyer (lower the agreed price) for the cost of the roof. The 2 parties can now hold the deal together if they can agree on a fair and equitable amount.
Or they can each move on and the buyer is fully refunded their Escrow Deposit, without penalty; but for the cost of the Inspection.
A little know fact is that a buyer need not conduct inspections and they still have the right to cancel, without penalty; if done so within the “Inspection Period”
One piece of advice, as the buyer its important to remember that if you choose to ask the Seller to make a repair, that there is a $1 repair and a $5 repair. Which do you think the Seller will choose and which would you want?
Flippers: A Perfect Example Of My Earlier Point OfferPad Incentivizes Realtors On May 7th, I wrote a post to help Sellers understand the pitfalls, THE
Does Fractional Homeownership Work? Fractional homeownership – or co-buying – isn’t anything new, but today it’s aimed at wealthier people looking to buy a second
7 Types of Tax-Deductible Home Improvements With Tax Day approaching, make sure your clients are taking all the home deductions for which they may qualify.
HOME SALE PROFITS DECLINE AS HOME PRICES FALL When we were finally able to see Covid in the rear-view mirror, clients, friends and acquaintances were
©2023 Home Sell And Save | All Rights Reserved