How To Tell If Your Agent Is Writing A Real Estate Contract That Will Cause You Trouble
Whether you are buying or selling a home, a real estate contract is going to be involved and will hopefully serve its purpose while keeping you out of trouble.
We use a contract to spell out the specific terms of a home sale and purchase, and that means it is a legal document that creates obligations for both parties, and these obligations are enforceable by law.
With this thought in mind, and having witnessed some poorly written documents that were presented in an attempt to create contracts during my 20+ years as a real estate broker, I want to share my one simple trick that will help you ensure that your real estate agent isn't going to put you in harm's way when you contract to sell or buy a home.
No Real Estate Contract Covers Everything
As the Tallahassee Board of REALTORs prepares to release an improved version of its Contract for Sale and Purchase (Real Estate Contract) which was last updated more than a year ago, it reminds me that there will never be a perfect contract.
The attorneys and agents who have worked to improve our purchase agreement have done an excellent job, but there is no way this document will be able to address every scenario that will occur between future buyers and sellers of homes in Tallahassee.
There will always be situations and variables that require additional thought and thus additional script in the contract, and this is where the problems usually arise.
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Real Estate Agents Do Not Write Legal Copy
I am a real estate broker with more than 20 years of experience, having brokered thousands of transactions in and beyond the Tallahassee real estate market. Additionally, I have an MBA, which puts my formal education near the very top in my profession. I share this to qualify this next statement:
Real estate agents and brokers are not adequately trained to write contracts; We are not technically qualified to write contracts, we are merely competent to check options and fill-in blanks. Agents should only facilitate contracts with pre-written forms.
Think about it this way:
It takes 17 days to get a real estate license, yet it takes 3 years to become an attorney, and that is only after completing an undergraduate degree that likely took 3 or 4 years (5 if you went to a party school).
So who do you think will be competent and better prepared to write real estate contracts ... the attorney who has received 7 years of education, or the real estate agent who has been learning for 17 days?
How To Tell If Your Agent Is About To Act Like An Attorney
I consider the Tallahassee Board of REALTORS Contract For Sale And Purchase to be a top-notch document for helping people come to terms with the purchase and sale of a home. It covers "just about everything" and the experience and wisdom of its architects have made it a highly regarded document for selling homes in the State of Florida.
But it contains one paragraph that I believe should be removed, as it serves to open-up many of the problems that have come across my desk over the years.
There is a section of this real estate contract that looms as a large open playground for the creative thoughts of all agents who actually sell homes.
With many lines of open space, it tantalizes them to produce their own original copy, often times at the peril of the party who engaged them to be their guide through the home buying or selling process.
I have rarely seen this section of the purchase agreement used correctly, as it more often looks like a grocery shopping list than an actual clause in a proper real estate contract.
If your real estate agent has strung together more than two words in any area of the agreement, you ought to have it reviewed by a practicing real estate attorney. Not merely any attorney, but one who is familiar and often works with the form that you are using (you don't want to have to pay an attorney to learn the document).
How Extraordinary Situations Should Be Handled In A Real Estate Contract
The big blank open area of a contract is not the place for real estate agents to "practice" their profession.
If there is something that needs to be addressed in a real estate contract that is not covered in the original language, then you should attach a pre-written "special clause addendum" that directly addresses the situation that needs to be added.
If the special clause addendum does not cover the situation, then a real estate attorney should draft an addendum to the contract so that you are properly protected in your effort to sell or buy a home.
Most highly active real estate agents have a working relationship with several real estate attorneys, and getting this type of addendum prepared for your offer and contract usually is part of the service your real estate agent should provide. This is just another example of why you should take the time to learn the home buying process and interview multiple agents for the job of helping you buy or sell a home.
If you are planning a move in the Tallahassee real estate market, simply drop me a note and we can arrange to meet to show you how our experience and processes are designed to save you money and protect you from the common mistakes that are made with poor real estate contracts.