Listing Side Caution Tips – 1

Learn from the mistakes we’ve had to deal with.  Here are several examples of how you could be tricked (purposely or accidentally), we cannot assume that because the other realtor is a nice person that they have your clients best interest at heart.  Its your responsibility to always make your clients aware.  If you’re not a lawyer, dont interpret legal information, that being said you can provide general descriptions of what a document is used for.  For example, if you’re not an attorney you cannot state whether someone would win in court, but you can explain how inspection section of a purchase agreement is utilized.

Caution
As a listing agent, watch out for purchase agreements you’re not aware of and for terms and conditions that are not favorable or risky for your sellers. Here are some different PA’s and examples of things to watch out for:

INSPECTION CLAUSES ARE NOT CREATED EQUAL, please watch this video:

https://www.youtube.com/watch?v=IwEmrUnmsDc

• Some forms allow a buyer to conduct whatever inspections they choose; other require the buyer to agree in advance as to what inspections will take place.
• Some forms allow the seller to terminate the purchase agreement if the buyer submits any request for concessions; other forms say that if the seller does not agree, the buyer then has the opportunity to withdraw their objection(s) and close.
• Sometimes the buyer’s right to withdraw their objections depends on whether the inspection period has expired.
• Sometimes if a party does not respond within an allotted time period, the transaction proceeds forward; other times, silence can result in a termination of the purchase agreement.
• Some forms allow a buyer to terminate by simply providing a notification that the inspection is unacceptable; other forms require the buyer to be specific as to their objections and/or provide written evidence as to the defect(s).
• Some forms provide that the buyer may only terminate the purchase agreement if a particular defect is material and/or the combination of defects is material.
• Some forms try to limit the buyer’s options. For example, there are forms that say if the byer finds the inspection to be unsatisfactory, the buyer can either terminate the purchase agreement contract or request that the seller correct the defect (but presumably cannot request a price adjustment).

TIP: Best practices dictate that the buyers’ agent should always have the buyers themselves sign any required written notice.  But, buyers’ agents should not assume that they can provide informal notice on behalf of their buyer-client without committing their client in any way. (e.g. buyers agent sends the listing agent an informal email that the buyers are clearing the inspection contingency. Could the buyers later come back within the inspection period and stipulate otherwise?) There is legal doctrine – the doctrine of “apparent authority” – where under some circumstances, a buyer will be bound by the acts of the buyer’s agent.

“INFORMATIONAL ONLY” INSPECTIONS

Often buyers and buyers agents who offer ‘informational only’ inspections think that they would simply walk away if any big ticket items are discovered in an inspection and legally that’s simply incorrect and dangerous.  By agreeing to an ‘informational only’ inspection, the buyer is agreeing to buy the property regardless of what the inspection uncovers. If the buyer ‘walks’ based on the discovery of a major defect, the buyer will be in breach of the contract and be liable to pay the seller damages. Damages are typically the difference between what the buyer agreed to pay for the home and what it is worth.