Q.  Recently I have had a couple sale agreements come across my desk for bank properties. In both cases none of the contracts were signed and the deals were sent to escrow with only buyer’s signatures. What is the proper procedure with files like this when an asset manager refuses or is not willing to sign any documents yet replies with a counter offer and their terms but no signatures?

A.  Banks and their asset managers often have no interest in complying with real estate licensing rules or even normal residential real estate practices.  Such rules and practices don't apply to buyers and sellers personally because they are not licensed.  Binding contracts for sale signed by both parties are a great way to get to a deed, but there is nothing in the law that requires people to have binding contracts if they don't for some reason want one.  Real estate licensees have a duty to advise their clients about the potential business (not legal) consequences of the deals they (the principals) enter into and keep copies of the actual documents the parties use in those transactions.  Most REOs require the buyer to sign the REO's forms when the buyer makes an offer.  Because the REO forms come after the buyer's offer, they are often thought of as (and sometimes even called) "counter offers."  They often are not really “counter offers” because they are not signed by the seller.  It's more like getting a buyer to sign a purchase order where the buyer agrees to purchase if and when the seller actually agrees to sell.  That isn't illegal.  Nor does it prevent opening escrow.  It just puts the seller in the driver's seat all the way to closing.  Buyers need to understand that without the seller's signature, it may be hard to enforce the contract.  In this regard, a follow-up email or letter to the seller through the listing agent saying "we understand we have a transaction and will rely on the terms of that transaction to make expenditures and forego other purchase opportunities" will help clarify the buyer's position.  You will want to log onto the Oregon Association's webpage at www.OregonRealtors.org and visit the Risk Management Toolkit to look at the new section entitled: "Dealing with REOs.”

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