I'd say that 9 out of 10 questions received by Lyon Real Estate's lawyer could be answered by reading the purchase contract. Yet, very few real estate agents have ever read the purchase contract. They know which blanks to fill in (most of them, anyway), but I'm betting 9 out of 10 agents couldn't recite much less explain pertinent paragraphs in the contract. Yet, they ask buyers to sign purchase contracts. Does that make sense to you?
The first thing I typically do when I meet with new buyers is hand them our 10-page C.A.R. California Residential Purchase Agreement and Joint Escrow Instructions. Well, right after signing an agency disclosure. And I write on the first page "Paragraph 14-b1," point it out to them in the contract and explain what it means. (That paragraph, along with Liquidated Damages, are the most important elements, from a buyer's perspective.) I hope they take the time to read the contract before we actually fill it out and sign it, and if they don't, it's of their own choosing.
A few months ago, an agent in Midtown Sacramento wanted to give me a counter offer stating the buyer was purchasing the property in "as is" condition. We discussed this issue at great length because the clause was unnecessary. It's already contained in the purchase contract. After the listing agent pointed out this paragraph to his seller, the seller backed off.
I think buyers should ask whether the agent has read the contract. If not, it might be smarter to hire a different agent. (Agents: why not take a a purchase contract to lunch with you today and read it?)
Photo: Big Stock Photo
The Short Sale, by Elizabeth Weintraub, coming from Archer Ellison in January 2009.
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Certified HAFA Specialist
My Sacramento Real Estate Listings
Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
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Elizabeth, even though contracts are promulgated by lawyers agents NEED to know what they say and the importance of the various paragraphs. They should be able to answer questions from their buyers about the meaning of the words.
Featured @ Club Chaos
That's true. I get addendums, duplicating paragrphs of the contract. It is all the time.
I also love when we send the offer, and the agent then tells us that we need to use another contract and some ofther proprietary forms "or they will not accept it". Who they? - The office manager.
-Is the office manager a principal to the transaction?
-Of course, not.
-How then can he/she even talk about accepting the offer?
And then I tell them that I do not work for their broker and office manager, so I do not really care much what they demand from their agents.
I always ask them why I need to use these forms. I am open to what they can say, I am ready to use it if they can explain me why, but they jus start whining that the manager will give them a hard time...
Most agents are on auto pilot and assume they need to cove a question brought up by the buyer when in fact it is in the printed portion of the contract. I just received a call from an irate agent that told me I had no right to remove his sign from the property. It had expired several days before and as I indicated the listing agreement specifically indicated all other sings can be removed.
Elizabeth
It's usually all there in the contract. What is not in a contract correctly usually winds up in a Courthouse room one day.
All my best
Tom Braatz
Hi Gary: Know what you mean. There's a difference between explaining the law and showing a buyer where to find the paragraph that concerns them in the contract.
Hi C: How cool for the feature. Thank you!
Hi Jon: Most of the addendums and disclosures are written to cover the agent's butt and, by extension, that of one's managing broker.
Hi Terry: Ha. So proof they don't read listing agreements, either. :)
Hi Tom: Even stuff that's in the contract ends up in the courtroom. Of course, nobody is in court for very long on those things. They typically get thrown out or dismissed.
Elizabeth...yup, read it, and I, too, provide a copy of the contract - even on my website for the "potential" buyer to read first. In Arizona, we also have a Buyer Advisory acquainting anyone buying a home here about everything they could possibly need to know. Fissures, bugs, critters, etc.....;-)
Are we supposed to read the contract? I learn something new every day:)
Elizabeth, I'm sad to say that I agree with this post. What's sad is that the consumer, when hiring a REALTOR(R), shouild be able to assume that that person knows what they are doing. The consumer should feel protected. But alas.....that is so far from reality. Scary!!!
Do you really think it's 90% that have not read it? I have to defend a little here. Not only did every agent who works for me take a "contract class" this year and last year (as we had new GAR contracts) we also saw many many many agents from our friends up and down the street. The class was very thorough and they went over the contract paragraph by paragraph. And we always send it home with new buyer clients to read. It's rare that someone signs and offer the first day, but if that happens we give them time to read it. 90%? Can it really be? I'm dumb founded if it's anywhere near that high.
While Tammy may be dumbfounded, I see this all of the time - counter offers with terms that were already contained in the contract, addendums with items already in the contract...it's sad disappointing that so many agents don't take the time to be sure they understand what they are having their clients sign.
Hi Teri: So how many buyers do you suppose actually read the contract on your site? I know many don't read it when I put it in front of them. That's why I point out certain paragraphs and ask them to read those and, even then, some don't. In fact, I tell buyers to read everything they sign and can count on one hand the number of buyers who have ever taken the time at closing to read their documents.
Hi BB: It is scary out there. It's difficult for buyers to figure out if they are dealing with an incompetent agent or a seasoned pro because they aren't given any benchmarks.
Hi Tammy: Yes, I do believe that 90% of the agents don't read the contracts. They are the same 90% of agents who aren't producing. I'm betting your agents, though, are above average because they have YOU to guide them.
Hi Lisa: I also believe that some agents are too worried that they'll be wrong to take a stand when a buyer suggests verbiage. They are too focused on whether the deal might not close than to do what is best for their clients, which is to educate and guide them.
Elizabeth: It's a shame to think that knowing our contract is such a trivial matter to some agents. I know mine inside and out. I love going to contract classes. It is the instrument through which my clients express their wishes with regard to a particular transaction. What's more important than that?
Part of the problem, Chris Ann, may be the fact that most agents can't remember what's in the contract because they fill out so few of them. I think stats say the average real estate agent sells 3 or 4 homes a year.
Elizabeth, I doubt if many do read it, and I, too point out particular paragraphs and lines as they sign and date each of the nine pages. I don't know how many read it on my site at all, but it's there just in case. Fortunately there are a "few" that will educate the buyers, but others don't care I suppose. ;-)
I do think that buyers need to be a bit proactive though.....and ask questions and read what they are agreeing to do, don't you? At least some of the onus belongs to the buyer.....