RealTown's RealTalk

Eileen Laudau asks me the question regarding my post
 

Where did I say that Line 72 was an attachment? It is NOT.
 

My point is that the CLAUSE (Attachment) is unnecessary in a Real Estate Contract in any state whether Attorneys are required at closing or not!  If a party or parites want to kill the deal there are enough loop holes to drive a truck through in a Real Estate Contract regardless of which state you are licensed in.  Our job is to bring buyer and seller together to make a deal not kill a deal.  The job of an attorney is to represent one party or both depending on which state you work in.  I think the clause is UNNECESSARY regardless of which state you work in.  FYI, we have a similar clause in our Florida Contracts.  Excuse me for calling your clause an ATTACHMENT.  When I work with buyers or sellers, my concern is for them to close not escape from their obligations.  We don't write contracts we fill in the blanks.  Attorneys write the Contracts, that's why the dumb clause is there.  What's the point of having a Real Estate License if all the consumer needs to do is get an Atttorney to void the transaction?

I recently had to get a client out of a contract on a condo. I had checked
the box that said the property was not in the flood plain and the buyers had
initialed the page. We learned that it was so they had no choice not to
give the em back. Seller's Agents need to explain what the seller is
signing and not just say initial here and sign here. Betty Grubb

Betty S Grubb
Betty S Grubb Realty
Email- Betty@BettySGrubbRealty.com
Website-http://BettyGrubb.com
Office #- 704-636-6165
Cell #- 704-798-8172

Re: Condo docs, HOA docs, etc.

I disagree with Ruth and Eileen and Juanita, and a few others, to different degrees on each....
100% disagree with Juanita, nothing new there.

First of all, some condo docs are like small phone books, and I would not put them on-line with the listing. Some may contain info of a semi-confidential nature.... to be shared with a buyer, certainly, but not with the whole world. Some condo communities (I'm thinking of one in particular here) spent Big Bucks to have some extremely comprehensive By-Laws, with some seldom-seen rules, and they would be furious if their magnus opus was shared with the world, or plagiarized.

I worked for a large CB ofc, we were VERY organized, and we had a filing cabinet dedicated to the condo & HOA docs for every community in Houston. This was handy for checking some of the most common questions  (pets allowed, weight limits on pets, whether roof & foundation & termite was covered or not, caps on raising the maint fees, etc.). ----- BUT ----

You should never rely on condo docs that were not prepared within last 30days. I once sold a townhouse to a sharp young lady (21 yrs old).... The listing agent didn't mention that the HOA fees were going up by $85mo, OVER what was shown in MLS. Doesn't sound like much, but it could've been enough to throw off qualifying, and enough to sour any buyer (our original search for townhomes included a cap on monthly HOA fee). This young lady was not happy about the increase, but she was a financial planner and she loved the jazzy townwhome (with open see-thru stairs dividing the living & dining), and she did close. 
The listing agent was an experienced agent, and normally a good agent, but she snoozed this. If she had provided condo docs from the time of listing, they would have been OUTDATED anyway. But she also, presumably, had NOT called the HOA to verify the maint fee before putting it in MLS. I had to go get the docs, and paid $100 for them, and they had just been newly revised (but the HOA had already voted for the increase a month or two earlier).   

Misc. comments:
If I hear one more time, that "a contract should be taken seriously", I think I will barf.

Contracts are always serious. Buyers don't go thru all that crap without being serious. But sometimes new buyers are skittish, they are worried about making a costly mistake or looking foolish for paying too much or whatever.... and they need constant reassurance. (My favorite line was: "Hey, buying a house is not like getting a tattoo. It is not a lifetime commitment unless you want it to be. You may end up owning half a dozen houses in your lifetime.") 

 Sometimes the unexpected happens in a buyer's life. I had a case once where two weeks after we had an agreed-upon signed contract (well past inspections), the buyer-husband found out his wife had been having an affair. These were friends/nghbrs of mine that were renting the house across the street from me, and they were buying a large place with a four-car garage. Killed that sale. The "out" was easy enough; it killed loan-approval.
There are, rarely, cases where a buyer finds something much more to their liking and are willing to forfeit their earnest money. This does NOT mean that they were less than serious when they entered into the contract.

Lastly, whether an agent is experienced or new has very little to do with how GOOD an agent they are....  one can only hope that an experienced agent won't make the same mistake twice. Similarly, top producing agents are not always the sharpest crayons. There are plenty of struggling agents that I would prefer to use if I needed one, because they are sharp, and aware, and don't miss a trick. Most of us have plenty of examples of these new vs. old and top producing vs struggling agent scenarios.
We have several very sharp new agents here on RT (Kris in NY, and those two ladies in Arizona with the same first name which I can't recall, one was a nurse, and others...).  Some new agents don't have a clue, and some experienced or wealthy ones don't either. When you've been around a long time, you soon hear which agents in your community are okay, which are adversarial, which are ding-bats, which are devious, and which need watching. The newer agents don't have a track record yet, and that can be worrisome to us older-than-dirt agents.

There is no magic formula for determining which agents will be superb, and which ones you'll always have to clean up after.....

Lindy in Houston

 

Sometimes the unexpected happens in a buyer's life. I had a case once where
two weeks after we had an agreed-upon signed contract (well past
inspections), the buyer-husband found out his wife had been having an
affair. These were friends/nghbrs of mine that were renting the house across
the street from me, and they were buying a large place with a four-car
garage. Killed that sale. The "out" was easy enough; it killed
loan-approval.
There are, rarely, cases where a buyer finds something much more to their
liking and are willing to forfeit their earnest money. This does NOT mean
that they were less than serious when they entered into the contract.
 

Lastly, whether an agent is experienced or new has very little to do with
how GOOD an agent they are.... one can only hope that an experienced agent
won't make the same mistake twice. Similarly, top producing agents are not
always the sharpest crayons. There are plenty of struggling agents that I
would prefer to use if I needed one, because they are sharp, and aware, and
don't miss a trick. Most of us have plenty of examples of these new vs. old
and top producing vs struggling agent scenarios.
Lindy in Houston
 

---
 

We had a "special" circumstance in RI recently, where a house was owned by a
real estate investment LLC... our buyer made an offer on the property, which
was to be a short sale, which then went into receivership... same lawyers
handling both the third party handling of the short sale and now of the
receivership process. The listing agent, a very experienced agent in Newport
RI, said that this had no impact on the sale... but we could not get a clear
title, as the property was moving around too much. The listing agent would
not allow us to contact the receivership attorney, and as we could not
guaranty title, even though the search came up clean, with some liens,
because who knew what would happen in the receivership, and what was being
done in that respect, and also since the listing agent was completely
uncooperative, and even had attitude at our most experienced and
professional buyer agent, we could not in good faith recommend the sale to
the buyer. At first the buyer really wanted the property... good location,
potential, etc. but this faded slowly, and eventually we found them another
house... needless to say the receivership slowed the sale process down to a
crawl, and of course, the listing agent was using a third party handler, who
was as usual non-responsive.
 

The listing agent seemed to be of the opinion that once the contract was
signed our buyer was forced to buy... he even said that we should "forget
about the title issues for now, there are none... buy the place and you can
sue later if something comes up." &%@#$*!&!!
 

Finally, we had to get out of the deal, as our buyers had found another
property, this one was underground with receivership issues, and the listing
agent would not provide any assistance in figuring out the issues. We used
the lawyer clause, and recovered the earnest money.
 

Contractually, all was done as it should have been, and all parties remained
the same throughout the transaction.
 

Fortunately, there were "out" clauses in the contract that I took advantage
of... saving my client much aggravation and money...
 

Personally I think the listing agent involved was a real prize, and should
deal only with me from now on, so I can ride him on every deal he does...
mostly short sales these days... and I am sure many that are not "clean"
 

Our buyer was serious, but was shooed away from the deal by bad karma, bad
listing agent responsiveness, and bad circumstances... fortunately they were
able to come away whole...
 

Have a great day!
 

Best regards,
 

Paul Silver
Focus Professionals, Inc.

Eileen in response to my post says:

"In our market, 99.9% of all sellers use an attorney. In 33 years I've only had one seller not use an attorney...because he was loan officer and knew the docs and closing requirements".
 

I am not opposed to Attorneys at closing, WHEN NECESSARY!  In some states an attorney is required and I have no problem with that. Actually if the truth were known, I love it when an Attorney is present.  I sit there and observe.  If a person or persons are about to venture into the most expensive obligation of their life, why would they not seek legal advise prior to taking the plunge?  We probably wouldn’t be in the mess we are in to day if more people had sought legal council for the past 8 years instead of some EBA to protect their interest. Unfortunately we were licensed by our states to represent or NOT represent the differences of opinions between the transfer and value of property for consumers. The American Consumer is so confused with the process they don’t know who to trust or who to believe. Maybe that explains why 84% of the net surfers would rather go online than to call a “Professional”?   We were not licensed to practice law!  Many agents muddy up the transaction with a lot of stuff that isn't necessary when it comes to finding a meeting of the minds.  But to provide a clause that allows an escape from obligation all in the name of an ATTORNEY only convolutes the objective. What we have created is an opportunity to escape in the name of suspicion. If the customer (client) depending on your relationship is not comfortable but yet they sign the agreement, why offer an attorney escape clause after the fact? Did we do something wrong? I fail to see the logic of an attorney escape clause in the boilerplate of a standard real estate contract. What is the necessity?  A cooling off period?  If one or both parties do not want to execute the agreement there is only one of two recoarses, don't show up or specific performance.  Either way you probably are not going to get paid.  Why continue beating a dead horse?  PRINCIPLE?   

I recently had to get a client out of a contract on a condo. I had checked
the box that said the property was not in the flood plain and the buyers had
initialed the page. We learned that it was so they had no choice not to
give the em back. Seller's Agents need to explain what the seller is
signing and not just say initial here and sign here. Betty Grubb
Betty S Grubb
 

---
 

Hi Betty, can you explain what you mean here in some more detail? Were you
the buyer's agent? Listing agent? The fact that the property is in a flood
plain has an impact regardless of the check box, and might not need to lose
the buyer their earnest money...
 

Have a great day!
 

Best regards,
 

Paul Silver
Focus Professionals, Inc.

Editor's Note
I read it that Betty's client checked the box on the form contract, initialed the page,  and the seller then accepted the contract without noticing the checked box (that the property was not in the flood plain). The listing agent should have pointed this out to the seller before the seller signed. Thus the seller had to return the earnest money to the buyer.  Let's see what Betty says.John

Robert writes in part: My point is that the CLAUSE (Attachment) is
unnecessary in a Real Estate Contract in any state whether Attorneys are
required at closing or not! If a party or parites want to kill the deal
there are enough loop holes to drive a truck through in a Real Estate
Contract regardless of which state you are licensed in. Our job is to bring
buyer and seller together to make a deal not kill a deal. The job of an
attorney is to represent one party or both depending on which state you work
in. I think the clause is UNNECESSARY regardless of which state you work in.
FYI, we have a similar clause in our Florida Contracts. Excuse me for
calling your clause an ATTACHMENT. When I work with buyers or sellers, my
concern is for them to close not escape from their obligations. We don't
write contracts we fill in the blanks. Attorneys write the Contracts, that's
why the dumb clause is there. What's the point of having a Real Estate
License if all the consumer needs to do is get an Atttorney to void the
transaction?

---

I assume you mean that your goal is to close a deal that results in two
pleased parties... compelling one party to close when there are extenuating
circumstances does not service either the seller or the buyer... but I am
sure that is what you meant.

There are always possibilities that certain unknown issues can arise. This
clause is in place to accommodate those issues, and to protect the buyer or
seller from unforeseen issues. Compelling the sale is rarely in anyone's
interest...

Have a great day!

Best regards,

Paul Silver
Focus Professionals, Inc.