During the next three months there will be more real estate transactions contracted then there will be in any 90 day period throughout the year. For obvious reasons that’s an annual certainty.
Exhilaration
Whether the relationship began due to a chance meeting at an open house or through friendships, the gestation period between the initial contact of a realtor and a client and an actual closing can sometimes be measured in years. The feeling of exhilaration that accompanies the experience of helping someone reach their real estate goals is unparalleled.
A Hectic Pace
As a consequence to this increased amount of activity, an accomplished realtor’s day can move at a hectic pace. Thus, within the scope of their fiduciary responsibility to serve their clients to the best of their ability, it is imperative that certain events and dialogue between two or more agents and their clients be chronicled. This is especially true when negotiating offers. Below is a list of common issues, events and circumstances that should be documented:
- You might think that it goes without saying, but all offers should be in writing. Believe it or not, there are areas throughout the country whereby offers to purchase property are made verbally.
- All terms, including price, inspection date, contract date, mortgage amount and contingency date (if there is a mortgage) and closing date should be as specific as possible.
- Counter offers exchanged between the buyer and seller.
- If there is an accepted back-up offer, that offer should be in writing also. Again, the terms should be specific and it should be made absolutely clear that this offer will go into effect only if the first agreement terminates. This sounds obvious and simple, yet there have been occasions when there was an absence of clarity and in such instances the sellers essentially agreed to sell their property to more than one party.
- Issues from a building inspection.
- If the first agreement actually terminates before the signing of contracts, the buyer’s desire to withdraw their offer must be in writing. As a listing agent, you must protect your seller client. One of the last things that you want to evolve is the reappearance of the first buyer who suddenly determines that they have changed their minds once again and now want the house after you have already moved on to a second buyer.
- Once the buyer’s desire to terminate an agreement (after offer and acceptance but before contracts) is in writing, there is another thing to consider. In many parts of the country there is a 1% downpayment that accompanys the initial offer and is held in an escrow account. In many of those areas it is required by law that there be written consent from the seller’s attorney to release those funds. Failure to get the consent in writing can be crippling to your career and to your economics.
Have you ever been placed in a precarious position due to lack of documentation? How did you resolve the situation and what did you learn?
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