Jim Valentine on Real Estate
Most residential real estate offers are written on forms approved by the local board of Realtors as “standard” for the area. The forms have been approved by legal counsel and modified over the years with input from the agents using them.
Changes are necessitated by changing times and policies, or as the result of litigation that can be prevented by a more clearly written contract. The offer and acceptance form is the heart of the overall purchase agreement and currently consists of 10 pages in our local board form.
The form is mainly “boiler plate” verbiage with blanks for the agent to fill in to customize the form to the transaction. Basically, a one-size-fits-all form.
In the real world, not all forms fit all situations. There are many addendums and disclosures that help customize the transaction. The basic addendum form is one blank page to be completed by the agent to truly detail items specific to that transaction. This is where some misunderstandings can occur leading to hard feelings and/or litigation between the parties.
When writing an offer, especially when filling in the blanks and writing custom conditions, it is important to make sure that the intention and agreement of the parties is clearly written. Be redundant, if necessary, repeat the terms in different areas of the contract so there is no doubt about what the agreement is.
One way to measure is think about it being enlarged to six feet tall and being presented in a court of law. What will the layman juror understand about the agreement of the parties. Write it so they understand.
When there is a misunderstanding or a breach, litigation isn’t always feasible from a financial or time point of view. We have a lot of out-of-state buyers and sellers in Northern Nevada making it difficult sometimes to enforce some terms of the agreement. Be clear so justice can be quick.
In this day of multi-thousand-dollar refrigerators is it clear that the refrigerator is included? Is it the kitchen or garage fridge, or both? Is the yard art included all or part, or is it trash that you want removed? Who is making repairs and are they qualified to do so?
Who is paying what transaction costs and what happens if it fails, i.e. – appraisal paid by seller if it doesn’t appraise, but who pays if it comes in at value and the transaction doesn’t close for other reasons? Personal property is often a sticking point.
Remember it is a real property transaction, but personal property abounds, i.e. – window coverings, video doorbell, chandeliers, etc. Many are fixtures by nature, method of attachment, but are often coveted by a seller. Some can be special and kept out of the transaction, i.e. – family heirloom, antique item, matches the bedspread, etc.
Specify clearly so you don’t have to haggle later. A contract is only as good as the people signing it, but it helps if it is written clearly to keep the marginal ones that may be tempted to do the wrong thing doing the right thing. Be clear what you think you are buying and make sure your offer reflects your intentions.
If you have something very specific in mind, ask your agent where it is covered and make sure you understand it clearly how it is written in the contract.
Contracts are best negotiated when they are initially put together, not as you get on down the line in the escrow. Get as much up front as possible and make sure everyone is clear on what is to happen, who pays what, and when.
When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, RE/MAX Gold Carson Valley, 775-781-3704. dpwtigers@hotmail.com.