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What was the real estate agent thinking when they wrote this contract?

Ever read a contract that was so bad that every hair on you head stood on edge? With loads of new unsupervised agents in all our marketplaces it really pays to try to read contracts a second or third time to make sure you are presenting a real contract to your buyer / seller. As real estate agents, we really are serving the needs of our buyers and sellers, and we must make every effort to make sure we are looking after their best interests. It is the right thing to do, it is also the ethical thing to do!

Recently, I noticed a number of contracts that on first glance looked OK, but on a second take there were blanks, omissions, initials missing, dates missing, and ambiguous language. On a contingent upon sale of a residence clause, what if the date for closed on or before was missing? Could the contract be voidable? Swiss cheese has less holes in it than some of the contracts I've seen lately! It wasn't just one issue that came into question, it was many items.

I also came across another contract that had no earnest money, in the place where the amount of the earnest money check was writter TBD "To be determined" For seller paid closing costs TBD "To be determined" does not work well either. Think about it, would you give an endorsed blank dated check to anyone? The sad thing was the contract was written with the agent as a principal. A scary scenario.

Performance issues are interesting when there are conflicts with home inspections, appraisals. Think about it...You cannot have an inspection to be performed in 15 days if you are closing in 10. Ouch! That could present a few problems! The only thing that is worse than any of these issues, is if they are all in on contract!

I do not mind assist an agent in a deal like this, but my first allegiance is to my principal. It is their broker that should be assisting the agent with their first offer, reviewing the offer before allowing the new agent to make a major blunder at someone else's expense. New agents should ask when in doubt. There are always those that are willing to take the time to assist them. But they should start with their broker.

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Posted by Jim Crawford ~ Atlanta Real Estate-ABR E-PRO on 07/19/2007 07:19 AM

Comments (131)

real estate contracts, real estate ethics, voidable contracts, real estate contract look holes, real estate brokers, real estate responsibility

Originally posted at: Atlanta Real Estate | Atlanta Housing News for Real Estate: What was the real estate agent thinking when they wrote this contract?

Post is included in group: Realtors®

131 Comments on What was the real estate agent thinking when they wrote this contract?

JUL

2007

I am really appauled when I read what agents write in contracts -- especially when they attempt to write a contingency. The will state "sales is subject to X" Then they don't go on to specify what will happen if X does not occur -- One of my all time favorites in a contract for new construction stated "home to be completed in 90 days" But it didn't specifiy when the 90 days would begin -- it could be 90 days from the year 2020! Unfortunately, this ended up in litigation --

I used to coach new agents. I know at least one would get frustrated with my persistance that everything needed to be complete. I would like to add neat. I like to present a neat and organzied offer. I like to receive neat and organized offers - while not guaranteed it shows me that the agent is dilligent with paperwork and in getting the transaction to settlement. I know there is no monetary value to this, but it also shows me that the agent and hopefully the client is sincere with their offer.

Good Post, Jim. I wrote a blog one time about how it is when you have to do BOTH sides of the deal for half the money...and essentially, when you have someone like you are describing on the other side of the deal, you HAVE to watch both sides. Not fair, but ethical and in keeping with excellence!

Joan - I have to comment on your comment. I am an ex-software engineer and part of my career was spent in support. Back in the ice ages when I started programming, the basic premise of a basic section of "code" was IF abc occurs, THEN DO rst ELSE DO xyz. I constantly surprised that many of the programmers didn't use the ELSE clause and not only that, they were adimant that it was never needed as it would never happen. Never say Never. It's ok, this allowed me to do a lot of international traveling and even resulted in getting engaged.... It's amazing what you carry over from other jobs. When I have to do addendums and special letters, I always keep the if, then, else in mind - I've had lawyers compliment me on my completeness just because of this!

I would say that this needs to go out beyond just new agents.

I am scheduled to close on a listing tomorrow, where the buyer's agent - a seasoned veteran - skipped right over the inspection contingency. He filled in the right to remedy period, but with no date in the initial inspection box, then there is no inspection contingency. We accepted the offer, in part because of this (long story on a potential buyer getting cold feet over nothing).

He called two days later to set-up the inspection and I reminded him that he could do any inspections his seller liked but that they had no right to remedy, based on him not filling out the date.

His response, "I wish you'd told me."

Umm ... That would not have been in my client's best interest, so "no".

I lost a lot of respect for him at that moment.

Jim - I remember once telling a new agent he did not include a large enough dollar amount to cover his clients Home Owner Warranty. He said, it was no big deal. Of course, the client probably thought it was.

Sometimes you don't have to look far to protect your clients interest, the other agent did it for you!

JUL

2007

Jim, yes... there are some "doozies" out there. I say away with their licenses. They are not doing anyone any service.

While I was keeping up with a little Continuing Education requirements today covering contracts in Oregon. The following statement ( paraphrased ) came up that relates somewhat to your post. When writing a Contract try to stay focused on writing a contract that meets the needs of your client and that will also be easily accepted by the Seller when read through the first time.

I see contracts like that all the time. It never ceases to amaze me. And when I point out the blanks and errors, or if I correct them, the other agents just think I'm being too picky. They're doing a horrible disservice to their clients. And if they would just attend the classes offered at our Realtor Association, they'd see things a lot differently. I've attended the "Completing an Effective Purchase Agreement" class 3 times! I go every couple of years, just for a refresher, and to stay on top of the current changes to the FAR/BAR official contract.

Lisa Hill

I see so many mistakes on contracts, it's really sad sometimes. When I was in "basic training" with my broker, he hammered into us that the PA real estate contract was going to me our tool to make money - and we better master it.

I don't mind an occasional clarification or even an oversight, but there are some awful contracts being written out there. Have you noticed, the worse the contract, the harder it is to talk to either agent or broker?

Jim, you are right on! Our compliance auditor consistently find these kinds of careless errors on purchase agreements that are submitted to our transaction team. Possession is the number one box that is missed on the purchase agreements that we review. How can you miss possession of the property? Some of the purchase agreements we receive look like they were written by the Agent's pre-schooler with crayons.

Jim,

I'm not sure which is scarier-those contracts or your graphic :)

I just had one where it was expired before I received it. You imagine how many other problems there were with the contract.

One I see frequently goes something like this:

Written July 1

To close August 5

Days to get loan commitment 45.

Someone needs to buy a calendar

Jim - I loved the one " earnest money TBD". This is just too sad. I'm surprised that the broker or manager would not have someone look over an offer before it is presented. It reflects poorly, not only on the agent, but the company as well.

Good post Jim. In the last 2-3 years I've seen more and more of this. I too sometimes feel like I am doing the work of both sides with the pay of one. I think what is happening is people are getting their state license and hitting the street. We all know that getting your state license doesn't totally prepare you. The next step is getting with a good company that puts you through the good final training program. That's where you learn to dot the i's and cross the t's. I think that's the step they are missing.

Jim,

Thanks for the post. The good thing is that this market will eliminate a good number of the rotten apples. Those that survive are trainable. We have to call them on their errors, it is the only way they will learn.

Imagine how bad it would be if there was more to it than filling in the blanks on a standard contract. I have see this as well and I believe a lot of it involves agents who should not be agents. You don't have to be the sharpest knife in the drawer to be a Realtor but you do have to have a minimally "sharp edge."

There should be more courses on contracts and how to fill them in properly, specifics etc.. I get a chuckle when I see a $100.00 deposit to bind a P&S! Are they out of their mind? You can't even buy a car with $100down! Then the buyers agent says "oh.. but its 100% financing. I say great!. They can get their earnest money back at closing ( if the seller isn't including closing costs). Who in the world would take a P&S with $100. down?

Jim, I rarely see a properly written purchase offer. I make it a habit of redoing the entire contract when my sellers counter offer. I just type up a whole new deal. It's a shame i Have to do that but my sellers and I will not use contracts that have blanks and time frames or contingencies that don't make sense. ALL contracts should be written as if you have to stand in front of a judge and defend it. Now that's a scary thought!

I am so not supprised.

The quality should be going back up soon. Many Boards are bracing for their membership to drop off greatly. Lets just hope that many of these people who do not renew their membership are the ones you are talking about.

Sometimes we leave the close date open as a negotiating tool. If our buyer doesn't care when the close happens, it can make the sellers feel more in control. For us, it has always worked out to our buyer's advantage. We give the seller the close date they want and do a little better on the price. Now, this only works if the close date really doesn't matter. Sherry

Wow! I did not expect all these comments! Excellent! The scary thing is that sometimes you get a contract with all of the above issues in just one day! LOL! We recently had 2 offers like this! One was so bad, that in all the years in real estate we had, we had to advise the seller to just out right reject the offer. YOu also kinf of wonder what is going on when you try to contact the agent that submitted the offer, and they never even respond! Stage fright? Guilt? Who knows what they are up to???

Some tools to have when writeing a contract:

A calendar
A calculator
Some common sense
Signatures and initials where required or at strikes outs
Fill in the blanks and where the blank does not apply put in "N/A"
A broker to review

Jim, it really is scary isn't it? I've seen some real amazing offers myself (especially ones where not only did the price leave quite a bit to be desired, but the terms were awful and the agents seem mysified when we turn them down), but the TBD is priceless!!! Why not just put the total price of the house as TBD? Wow!!!

Chris it is kind of scary. A lawyer in Atlanta told me that TBD can void a contract or make it voidable. It depends aon where it is placed.

Interesting. I have seen and "done" some contracts like that. Just $1000 for the offer and no money down. Yes, and also 100% financing. Guess what? Most of those deals would not be 100% financing. Only 90% max.

On "short sale" the buyer put $3000 down, tomorrow the buyer will put addition $10000 to the title company. But we still don't have a signed contract by bank. Shell we put this $10000 tomorrow just to prove- our buyer is serious?

Hey Group, Have had the pleasure of working with Jim and Ellen. Jim practices what he is preaching! In addition, he is professional and a very nice guy. Hope we work together again soon.

Sometimes when that happens you just bite the bullet and know that you'll be "doing" the whole deal. In those cases, when I have a listing, I have my client counter back on a new contract with our terms. It is just easier and nothing gets overlooked.

I had dealings with a feller who snickered derisively when I requested initials, dates, and details in various places in the paperwork.

We went under contract, and then his buyer terminated, likely from lack of guidance. The termination paperwork handed the earnest money to my folks on a silver platter, as he was that unconcerned with diligence. They waived claiming it, being wonderful people and not terribly contentious. The goal was to sell the place, and we did within another 72 hours.

That feller still has no idea how he exposed his clients to a several thousand dollar loss for nothing other than his careless ignorance.

I still have his card...from the convenience store job that is his full-time gig.

Don't even get me started on this - the date lineup was so bad here in Florida, the latest version of our FAR contract had to have a cleanup paragraph to overwrite what agents couldn't do themselves - get those dates to line up and make sense. Of course, the dates are insignificant in comparison to the write in addendums- I could write forever on this topic but I will add only one more thing. I used to call the other broker or manager to suggest that they review the contract with the agent thinking this might be one way to make bad contracts better. Most of the time the broker either didn't care or didn't know. We just fix them in the counter offer now - I give up.

Not filling in a contract accordingly is sloppy.

On a sales contract I make effort to work with the other agent to get all the details straight before sending the contract onto the attorneys for approval.

Some agents seem to prefer leaving it up to the attorney's to iron out any wrinkles. Of course any modifications or addendums to the contract makes it a counter-offer and everyone would have to agree. My philosophy, don't make twice as much work for yourself.

Jim,

The scary thing is that I have received offers from agents that have been in the business for a while and their contracts are still incomplete. I received some disclosures from a seller and their agent not to long ago that were filled out completely wrong. When I confronted the selling agent he just denied that he filled them out wrong. It gets really frustrating when your doing their work too!

Thanks for a god topic Jim. Surely this area is one that needs attention for in-house training, continuing ed, etc. Our office has a local attorney review the current contract each year and then gives us examples of poorly written offers, etc. Just may be the best training we get.

This is a definite "5" post. Thank you all for your comments. I am a staffer at a local association and I'm forwarding the link to our Pro Standards department. If you all are having this same complaint, perhaps we can add a class or a series of newspaper columns to help some of our <ahem> less experienced agents write cleaner contracts.

I also have to comment on the photo. Young Frankenstein is one of my favorite movies, thanks for plopping all those great movie quotes in my head for the rest of today. Ah sweet mystery of life I found you....

Mainstreet Logo

The contracts are sometimes difficult to navigate and I don't think there can be too much role playing or training on completing or explaining them. I've read clauses that in 20-30 lines, don't say anything. Agents whose eyes glaze over when asked questions represent ignorant clients, because the clients haven't had access to or any opportunity to know about all the clauses.

Many buyers and agents like to compose contingencies full of 'legalese' --(does this make them feel smarter?) The one that first got to me was "contingent on finding acceptable financing." A backdoor you could drive a motorgrader thru! And they did.

Hi Jim

Great post

It is unbelievable what you see - where are the brokers?

does anybody check their agents contract anymore?

It is scary

and getting worst not better

anne

agreed! the most common omission that I see in GA contracts is the closing attorney. By leaving it "TBD" it also creates a loop hole to get out of the contract

I just wrote an offer last night for a property that my broker has listed. Although everyone else in town has RAVED about my contracts and how well I do, and he has looked over them, I'm terrified! I do think it is important that new agents find a broker who WILL work closely with them to ensure success. I have heard stories from classmates of mine, and I am SO thankful I have the broker I do. He's here to help, and I love that! :)

I think they need to teach contracts in more detail in class!

Here's a pet peeve of mine: An original offer is made, say, July 1. Financing approval is due, say, July 20, and closing to occur on or before July 31. Negotiation takes until July 12 before the parties have an agreement. The buyer is not easily approvable for financing, the approval date is now only 9 days away, and the lender is stuck in the middle. Yes, a calender would help, and so would a conversation between the buyer agent and the loan officer before the offer is made. Bottom line: Don't use a firm date for financing commitment, but use a time line such as "21 days after signed agreement".

I always have my broker look over my contracts , its help to have the second pair of just incase something is wrong.

Jim, I have seen some of the ones you are talking about. I can think of a few contracts that were written by veteran agents that were unreadable and many blanks were left out. Then they were angry that I brought it to their attention. We learn everyday in this profession.

I have seen some of the craziest things when it comes to contracts. Another agent in the office recently recieved an offer where the buyers asked to keep the Shower Stall in the master bath?

I had one when the buyers asked to have the foundation inpsected for termites, this would have been done anyway except that the home was on slab.

I can go on and on. But I do not just blame new agets as there are plenty of seasoned ones out there that do the same thing.

For the new agents it due to lack of training or supervision by their brokers. My broker requires that all new agents submit all offers to him for review before submission. Then once he is comfortable with their ability to write them up on their own he has them stop.

Absolutley read it even if it is an experienced agent. We all make mistakes and it is up to us to review before presenting. I was just told to remove insulation from the crawl space vents on a listing inspection. Guess what there are NO vents.

Herbs comment about being "easily accepted by the Seller when read through the first time" really says it all!

I will counter a poorly written contract with all corrections made, even if the substance is essentially the same. Simply to protect my clients!

All of the comments about brokers reviewing contracts are right on the money.

I work with a non competing broker whose primary responsibility is training and contract review. She sees every contract and uses a check list that is returned to the agent with questions, concerns and suggested changes. I now use the same check list when writing or receiving contracts and that has pretty much eliminated any oversites on my part.

I try to be tolerent of new agents, remembering some of the help I got when I was new, and help them where I can. However there are a few experienced ones out there that seem to be just too lazy or in too big of a hurry to get it right.

Hey Jim,

Boy you are so right on with this one! It's one of my biggest pet-peeves in the biz. Being in a hurry or stupidity is no excuse.

Sorry to say I see contracts like this all to often, at times when an offer comes in on a listing, or worse yet at an arbitration hearing of a mediation. I do them for our AOR and the State. I think the only place worse to have your contract scrutinized would be in a court of law standing before the judge.

I'm a fairly new (2.5 years) agent, and I get paranoid about my contracts. I also get compliments... One the other hand, I've had some "experienced" agents that left some pretty big holes in their submissions and counters. Everyone makes mistakes. Heck, I came up with three typos in the blog post... ;^)

But, seriously there are a lot of times when people make mistakes and don't adequately protect the interest of their clients.

Remember that if you are a REALTOR, you are bound by a code of ethics. While you have to protect the best interests of your client, you also have to deal honestly with ALL parties in the transaction. Not asking for clarification when there is an clouded issue in the offer might be just like trying to install "gotchas" or escape clauses into the contract so that your client will have an excuse to breach.

When presented a poorly written offer (and I have been) I try to communicate to the other agent that there are problems and questions that need to be addressed. Of course, when dealing with a "disappearing agent" that seems to fade into the woodwork the day after the offer is accepted, and only re-appears to collect the check, I try to get them back on track to assisting their client before I complain to their broker/board and commission.

Sometimes dealing ethically with all parties means that I have to help the other agent. I hope to never be on the receiving end of that help, but I hope that if I need it, I'm not dealing with a "gotcha" agent, but rather one that wants everyone to win.

I've had agents in my office accuse me of being "difficult" with the offers that I write. The thing that gets them? I throw in a clause that the house must appraise to the sales price. I don't really understand why this is being difficult. It protects my client if for some reason the house does not appraise. Why should they be on the hook for more if the bank feels it's not worth the sales price in the contract?

Wouldn't it be nice if real estate agents were required to go through an Apprentice Program before being turned loose?

every single day

I can't believe what people come with up with on a daily basis

Wow again I am stunned at the response here. I wrote this a little bit to vent. I never offer real specifics because I am a firm believer in making things work. FYI the deals that I had like this are now closed. We got through all the issues without rubbing the agents nose in it. No I am not their trainer or mentor, but the other agents all too often cannot contact their brokers for advice...and even their brokers do not have enough experienced from closed deals to advise them. The best thing to do is just converse with the other agent, tell them your client has some legitimate concerns that need to be addressed, and then lay them out perhaps with an explanation. I find for the most part, the agents are very appreciative of your help, and the deal actually can close without an issue. It is correct to get all of the items addressed before you get into a deal so there are no surprises as the deal moves forward.

Kool Aid What I am really appalled at again is the lack of assistance from the brokers with a new agent writing their first few deals. In the past brokers really played more of an active part in a new agents success. They showed up on listing appointments, contract reviews, contract presentations etc. Today too many brokers hold BS drink the Kool Aid pep rallies that are meaningless. Brokers need to come in from the golf course, and become a proactive force in their business. There is more to being successful broker than recruiting, and letting agent's fall flat on their face.

This should NOT happen. If an agent receives an offer that is not complete, as in TBD, send it back. It usually takes two agents to complete a contract. Agents should not present or even entertain contracts that are not complete.

This is simple risk reduction. Brokers need to have quality control.

One thing I know for sure, a well written complete contract is much more likely to be accepted.

Lenn I agree fully!

The last contract I sent back was written by the broker--no witnesses, no dates with signatures, and no list of additional items, i.e. appliances, window AC, etc.

This stuff has become so common place as there has been an influx of new agents joining our ranks in the hopes of capitalizing on the real estate boom we just went through in many part of the country. Many of these agent were trained on the fly as everyone was so busy and just brushed over the "basics". I see so many poor agents in the business now than I ever have.

I remember when I had started with my first company, The owner would not allow any contracts to be submitted until the broker had a chance to review them first. Then after that was completed, she would sit us down and go over general contingencies, etc and where/how to place them to protect out client. It's so important to have this done right. I can only imagine what could happen if you overlooked something on a submitted contract/

I think a lot of new agents do not fully understand the complexity of the contract they are writing. They are just so happy to have a warm body in the seat across from them that they will write anything on that piece of paper just to get them to sign it. Ultimately the managing Broker is responsible fro this agent but we all know too well that the oversite is generally pretty lax at many offices.

With so many areas having "fill in the blank" contracts on a computer, there is no excuse to have a contract not completely filled in with correct information. And for leaving closing costs as TBD... what?? That could be $1000 or it could be $10,000!! Why would a buyer's agent think the seller's agent would allow that? As always, more education among our co-workers is needed.

When I work with the Seller I don't mind helping the buyer's agent get the contract right. It's my duty to the seller to make sure the deal gets done so I make sure the contract is written correctly. All the while keeping my client in mind.

When I work for the buyer I try to be as exacting as I can. Simple as that.

I'd try to help but usually some agents don't want the help!!!!!!!!!!!!!!! I would have had the seller reject or counter every blank.

After much inquiry I have found the answer to MOST CASES. In MOST of these cases, the agent writing the contract is merely trying to place an offer. As if they'd call you and say, "Hey, will your client take $100,000 for the house? They will? Okay good, I'll write up the contract." Instead of calling and asking, because they know that most agents will just respond, "Send me a contract and we'll find out.", they essential are doing it through the contract.

When first presented with a contract with a bunch of blanks, they are essentially asking, "How does the price look?"

Of course, savvy agents realize that the "other stuff" in the contract can make or break a deal just as much as price, but not to these agents, ESPECIALLY IF THEY ARE REPRESENTING INVESTORS!

Just my thoughts.

LOVE the photo. Have never seen TBD in a contract in 17 years.

Just came back in to check the comment thread here - Jim I love the Kool Aid remark - I laughed so hard I almost fell off my chair . I don't play golf and I don't drink the Kool Aid - but I do enjoy a good laugh every now and again - thanks

Wow! It's amazing the number of realtors that have the same problem. I agree with Sharon - realtors should go thru an aprenticeship before entering the real estate field. Our office policy is the contract is given back to the agent to complete if turned in without all blanks being filled in. Makes for a better closing.

We have the same problem in my market...Monterey, CA. I hope that with this changing market we are having, it will clean house a little bit and some of "those" agents will find other jobs.

Thanks all for the comments! If you think the contract is fun wait until you see the counteroffers, The contract is just the beginning of the fun! The counters could make you do a double take! It is like you have 2 choices, Door #1 or Door #2,..I'll take Door # 3!

Cute picture-I had to do a double take.......and yes, Door #3 is a good choice.

One thing this thread did was make me decide to go to our other office,tomorrow morning, sit with each agent and have them show me their latest contracts........

Scary things in here, and sure hope I don't need any heart medicine tomorrow!

This has always been a big pet peeve of mine, but I've learned to use it to my advantage. When I see the weakness of the other agent, I use it to my client's benefit when negotiating. I don't know about you, but I always do a little research on the other agent before I accept an offer. I want to know who's going to be working the other side of the transaction (or in some cases, not working the other side of the transaction).

Turn lemons into lemonade!

Wouldn't you be mortified is something like this happened to you? At least, I would. Our contracts here in the Hilton Head, SC area are pretty straight forward as well as abbreviated. Makes for much easier contracts.

I know I would be "mortified" that's why I am going to do a spot check tomorrow.

Oh, and as a side note, all my agents have been in the business for Years.........but i have found errors in their contracts in the past. The biggest error I have found is being too wordy on some things, which can leave us liable. I have to continually remind some that we are not experts in certain fields, so don't write like we are. Be careful, be careful, be careful, can't say it enough times apparently.

I have a friend who sells millions upon millions of dollars worth of expensive homes every year. And he has for well over thirty years.

His standard procedure is to put in the seller's name, the buyer's name, the price and the closing date, then draw a line down the pages striking out every other paragraph of the pre-printed earnest money form we use in Texas.

He then says, "Sign here." The clients say in horror, "Why in the world did you do that?" He responds, "You're either going to buy the house or you aren't, and he's either going to sell the house to you at that price or he's not. What's the rest of this junk got to do with it. We'll work it out."

He never shows up at the title company on closing day. He leaves that chore to his favorite escrow officer -- a woman who has done almost every one of his closings over the years.

I'll venture to say there aren't 2% of the members of Active Rain who have ever once had as good of a year as my friend has had.

What does this mean? I don't know. I just thought it would be an interesting commentary to go along with your blog.

I was the business manager for a realtor whose contracts were illegible, full of misspelled words -- and full of contradictions etc. After 17 years working for lawyers, primarily in contract law, I know how important language and wording is! One simple word can change the entire contract!!

Funny thing is this realtor thought she knew it all -- she wrote my employment contract and left a huge hole in the contract -- she breached the contract. I have a lawsuit pending against her for breach of contract. This could end up being a very costly mistake on her part.

When in doubt, ask someone who knows -- your broker, a seasoned agent, a lawyer -- better safe than sorry!!

When I write a contract, I check - and double check - to make sure everything's covered and I'm looking out for my client's best interest!

JUL

2007

Jim,

Your post is a good reminder to all of us how important a clear contract is. And one that makes sense. It has happened that we have sent a contract or two back for revision because there is no loan program that would fit the vague language in it. Contract writing should get more attention in the continuing education requirements.

It's sad when contracts have a lot of holes. Thanks for the post.

Wow...doesn't sounds like a lot of fun. I am not newer but still ask questions.

You're right, Jim.

The buck stops at the top! Brokers, or branch managers acting on behalf of brokers in large companies, need to provide the oversight that is required by law. But who has ever seen that enforced? As a branch manager and/or broker during the course of my career, I saw paperwork that looked like that swiss cheese you mention.

Just try to go back and get TBD changed to a specific, or get an initial, or (this is one of my favorites) substitute a current form for an obsolete one in a contract.

No wonder realtors are in the basement of consumer's confidence! As many fine professionals as there are in this industry, all it takes is one bad real estate experience for a consumer to trash our entire industry to anyone who will listen.

Thanks again for all the responses. I'm sorry I did not get a chance to answer each of you individually. Business has really picked up in the last few days, and I am in several negotiations.

I love all the comments. Here area some thoughts that I've gained from them.

As agents we have individual responsibility to make sure the contract, dates, verbiage are in good order and easily understood terms for all parties.
No ambiguity.
In A slow market there is no rush to fill out a contract so you can sit back and do nothing! Real estate is not a race.
Brokers need to play a bigger part in new agents careers.
Brokers have a responsibility to review contracts before tendered.
Brokers need to let their agents know that they are available for them 7 days a week!

I learned a great deal from your post AND from the responses....thank you for the terrific, thought provoking post. I am going to share with our broker....so...some ideas are kept in mind while training new and experienced, alike. Happy Selling! Pamela

Thank you Pamela! Sometimes simplicity is the best frame of mind when writing a contract. This is a good topic even to bring up at an office meeting. The subject matter does not just apply to a new agent. If I have doubts or questions I bounce it off my broker or other agents or a real estate attorney.

Jim, I hope this is ok, but I am using your post and my response for a blog today. I don't know if that is considered "kosher" but I'm doing it. (forgiveness is always easier than permission, eh?) In essense, this is what is in my blog today on your issue. I link back to your orginal blog a couple of times. I really hope that is ok with you. Here is my local Association take:

Like all of you I was disappointed and a bit upset to hear of agents who don't fulfill their duties as professional REALTORS®. Granted, my association is in suburban Chicago and you are in Georgia, but the underlying issue is proper training of an agent and then supervision of the agent in the field.

Our association has brokers who on insist on training their agents themselves as well as brokerages who send their agents to Mainstreet Organization of REALTORS® (MORe) for training. Regina Jordan, our Education Director tells me "The contract is discussed the ½ day of orientation and the MORe Education Department also offers a RB746 - Elements of a Contract, 3 hr. c.e. elective course. It deciphers the sales contract from top to bottom."

Additionally, (behind our firewall, members only) we have an on-line tutorial that an agent can access 24/7. If you happen to be a MORe member, sign onto our site, click on the tab marked "Contracts & Forms" and the third or fourth link down is the tutorial. This .pdf document will explain each blank that you click on, guiding you through all the pages and option.

Of course this does nothing for an REALTOR® who is lazy and just doesn't do his or her job. In those instances I spoke with our Professional Standards Director, Kate Sax. Ms. Sax read this post and sent me this message:

"I suppose that you can file badly written contracts under Article 1 of the Code. Here at Mainstreet we have a tutorial and CE classes to help agents master the skills of contract writing. Most of all, agents need to stress the extreme importance of an attorney in contract negotiations with rogue or ill advised parties."

Check with your local association and see if they too have an online resources that you can use in training REALTORS® out in the field.

Jeff thank you ...well stated!

Hi Jim,

You are too funny. I have a friend that recently made a grave mistake on winforms and wrote a listing contract for only 1 day. The real sad part is the sellers wanted to cancel and she had no ground to get a commission!

Hello All,

It is nice to see so many brokers and office managers weighing in on this issue. Training, training, and more training. I remember when I first started and we had a mandatory contract training. It was five days eight hours a day and it was line by line.

All of my new agents are trained on a one on one basis. I give them this time to make sure they know what is and what is not acceptable. All contracts must be on my desk for review within 48 hours of acceptance. At this time, even seasoned agents know I am going to read and check the whole file. If there is something wrong it is fixed at this point. Missing initials can happen.

We also do a check after closing. Most local brokers will do this and the agent does not get paid until the file is complete. This is the only way to motivate some people, gladly I have never had to resort to this.

It all comes down to training. If in doubt, come to the broker. That is stressed, as another agent is not a broker and the advice they give could be wrong. All of my people can call me anytime or walk in to my office. I have an open door policy. I want to help them and of course stay out of court. I have not yet had to go to court on any contract written by one of my agents and hope I will never have to.

Just curious, do other areas use Winforms or any other program like this, such as California does? Every approved form from the CAR is there and up to date as of the day by using Winforms online.

Thanks,

Shawn Nichols

Even as a new agent I have seen contracts that were a bit scary. I was taught to make sure every line has something filled in but sometimes see contracts with lots of blank spots.

As a newer agent I must admit I had problems in the past getting guidance to help complete contracts correctly - I am glad my current broker is willing to help with my questions - it takes a lot of stress out of my life.

Tina! Wow! An agent recently sent me a contract with a lot missing...the software has a a flaw and drops a lot of data when re-edited! Scary isn't it?

Shawn there is a review policy in place in our office ...all of the required items in needed must be in file to get paid!

Rita no one is to new or too old to ask questions! You have a good broker!

JUL

2007

Obviously an issue of great concern. So many comments, what else is left to say... except I've seen some contracts that I felt sorry for the clients on the other side.

Carol I feel the same way! How can an agent such as this be a buyer's agent? I mean come on... I recently entertained an off like this, we talked to them, fixed the contract which now became a counteroffer... and now the agent is no where to be found at all. I cannot even begin to figure it out!

That is a "sticky" situation. If only I can phone you one this one.

JUL

2007

Maggie there are o many situation in real estate like this, that the names have to be withheld to protect the innocent! LOL! I learned a long time ago restrength of tongue and pen! LOL!

GREAT POST JIM!!!! Love the picture too!!! Very appropriate!!! All we have to say is....It takes all kinds!!! We often wonder how some people make it in this business with the way they do things!! Thanks for sharing!

Rick and Lynn, you are more than welcome. I am a firm believer that if you can sell real estate for 100 years..."that you'll never cease to be amazed at all that we see!"

Jim,

I did not get to every response to this post, but many I did read seem to agree that the broker over this agent should be playing a much larger role in supervising the agent. In a HOT market (2004-05), this contract would never get out of the starting gate. As we work thru the "slower" market, there should be plenty of time to "get it right"... Do ya'll in ATL have the same surplus of agents that we have here in PHX? That is probably a big part of it. Not an excuse, just a cause.

JUL

2007

Patrick we do have a major surplus of agents in Atlanta! The number of real estate agents has increased 300% in the last 3 years. We've gone from 12500 agents to 45000. Yes, that is a big part of the problem a lot of new and part time agents. That is all the more reason that the brokers need to get involved with these agents.

my first year my broker had to check every listing and sales contract i wrote i could not believe the mistakes that i made. he used a yellow high lighter my first few had more yellow than pen ink i still triple check everything i write up or contracts that are proposed to my clients i thank my old broker for doing this and even now in my office other agents come to me and ask questions on contracts even though i have only been an agent a couple of years

John. That is where it all starts! I remember years ago I went into a field I knew nothing about, and I used to force myself to make loads of notes and draw diagrams! Several years later, I had a great reputation and and received several employee of the year awards.

Our numbers declined last year up here in Nova Scotia. We still have lots of mistakes by new agents, and our broker does review all the new deals. My favorite (showed up last week) was a water test clause. - No date for completion or satisfaction. I fixed it up immediately , but if I hadn't ...??

Paul! We have to assist the new agent when doing a deal. All too often the brokers are not doing their job! How's things in Nova Scotia? I was a featured Internet real estate speaker in Halifax at the Atlantic Connection last September. Nova Scotia is so beautiful!

Didn't read all of the posts (phew, there's bunch) but one thing I learned some time ago is that just because you have been in the business for a lot of years, doesn't mean you know what you're doing.

When I started in this business, in 2001, I had a seasoned agent come to me with a poorly written contract, then had the gall to tell me he was right because of his years in the bus. I used the above phrase to put him in his place. We've done several deals together since and he REALLY watches his contracts with me.

JUL

2007

TBD is a voidable portion on a contract in Tennessee. If you do not know the date our stae's statute says to reference the information into an addendum where the particulars can be spelled out. So in the case you wrote about your client could have signed the offer and then used the TBD as a voidable reason to walk away...so could the other side that's the danger with that acronym.

Don this is true! Tenure does not esynonymous with experience, knowledge or performance.

Jackie!! I agree! TBD is voidible just about anywhere! It is antamount to writing someone an endorsed blank check

JUL

2007

The amount of agents that simply cannot fill in the blanks properly is amazing! I wish more offices had better practices when it comes to training, supervising, and mentoring new agents.

Kim

I recently talked to an agent that wanted to write an offer on my listing and close the deal many months away! I asked what about the lock? She asked "what is a lock?" When I mentioned it makes a big dirrerence in rates she did not understand at all. What bothers me more is this person is supposedly representing someone! Their loss BIG TIME!

JUL

2007

Makes you wonder why higher education isn't required for a license.

Larry higher education should be required! Let's face it when most real estate laws were written the average home in the 1970's was about 40 or 50K! Today homes can average 350-450K! That is two totally different scales of comparison. An analogy pointing out the differences of this shift in importance... if it were a crime would be petty theft or grand larceny!

My favorite is when the agent writes in "Best Prevailing Rate" for the loan terms, or better yet, no loan terms at all.

Doesn't it just slay you? Think of the poor buyer! Wow! I got stuck years ago with the best prevailing rate in new home contruction that finished out at 15.5%!

I have haeard from areferral that I gave in Virginia that the New contracts are a nightmare. We are bless or cursed as you might say to have evry form none to man in a contract because of the intense legal issues and legal profession that is strong in California. We have 65 forms and we do not see anything rarely written by agents anymore. It is all done for us and we are jumping through hoops to cross every i and dont every t and met every contingency date. we even have a form to remove all contingencies and lists the contingencies and we have an addendum to the TDW that our Lawyers require in our oofice that list every possible crack and stain on the inspection..California real estate is about as tight a contract that you can get but it works to erase the gray areas.

Thanks! The lawyers have real estate agents exactly where they want them! Lawyers want to be the ones that write the contracts, and interpret them! In New York City where I was first licenses, a real estate agent cannot write a contract. I could only take a binder and give the client the names of at least 3 lawyers...closings by the way took forever, No standardized contracts, 6 months or more to close a deal! Ant the buyer or seller got taken to the cleaners with the most expensive closing costs in the nation!

AUG

2007

Great post - TBD for earnest money? Wow! Who would sign something like this? This amazes me. Florida is not an "attorney" state so to speak...However, I always recommend that a client have contracts looked over, but many people don't want to pay the cost associated with the attorney when they don't have to. I agree with the post that says - take their license- so many realtors are not doing a good, thorough job for their clients.

Rebecca Dean - Selling Naples - Bonita Springs, FL

Rebbecca I blame the brokers! They have turned in to requiters. Years ago a broker would sit down and walk you through your first deal, help you write it, present it, counter it, negotiate it and even go through your first walk through and closing! Today most of the brokers are out on the golf course, and wearing a recruiter hat! They do not review any contracts, and if you call them with an issue they are annoyed! They are annoyed because they have no actual experience themselves in selling homes. The quality of the real estate profession has really degraded in the last few years. Very sad.

AUG

2007

Jim,

The real problem is that agents writing up these contracts, don't understand the contracts in the first place. Contract Law should be focused on a little more... The Las Vegas Board of REALTORS has a great program called RRG taught by Nevada Real Estate Attorneys--> http://www.lasvegasrealtor.com/rrg/default.asp - more boards need to implement a similar program and managing brokers should certainly be required to go through programs like this.

Paul and Michelle I fully agree. In Atlanta we have something very similar. Unfortunately, there are too many new agents, and part time agents that the broker they are affiliated with...deems the 45 hour state licensure course is enough. That is totally wrong. I see contracts that have open ended contingencies, blanks all over the contracts that are not filled in or struck, missing signatures and dates, and totally ambiguous verbiage.

All I can say is thank god for my broker! She is always available to answer questions or help me where needed. I have learned a lot from her and still learning more.

AUG

2007

Jaqueline There are really a lot of great brokers! Just some have turned it into a production line.

Maybe amuzing & baffling but scary to say the least! I wonder what the stats are on how many RE Agents have actually taken the time to read every word (fine print & all) of the contract. Take the time to understand each section so you can go over it with your Client and provide your Buyer or Seller the representation they deserve. Our broker in GA required every agent attend a 2007 contract training class at the 1st of the year. Education and knowledge is powerful!

I had someone call me today, angry with their Agent about their contract and said the agent didn't explain the contract terms to them and they didn't receive a full copy of the final accepted/binded agreement. Oops...Buyer wasn't sure what they signed. After listening and letting them calm down a little, assured them they had a good agent and suggested they need to communicate better.

In Buying and Selling Real Estate, Your Agent Matters! Exceed their expectations and you will have a lead for life!

Patsy, I think it is fair to say most haven't! Thank you for sharing! You are a true professional!

AUG

2007

Jim - I am amazed that it's not just agents. I'm dealing with a Broker that continues to amaze me. Not only NOT returning calls nor faxes to the office; the phone rings then goes into voice mail that is FULL! The initital offer received was hand written and eligible and on his own made up agreement from who knows where. This is the type of practitioner that gives us the BAD reputation. All we can do is do our job the best we can and keep giving our clients the best possible service they deserve.

Linda I agree, it is importnat to serve our clients interest,but it comes to the point I do not like doing the other agents job. In that case, I think that is the way they want it!

Thank You, it had to be said!

It is fine to make mistakes as a new agent, anyone in real estate who says they havn't are lying. Making a mistake is one thing, presenting that mistake to an other agent is absolutely avoidable. Brokers would be wise to mold their new recruits, looking over the first couple of transactions. Both ways, the new agent should ask for assistance and want to take advantage of the knowledge their broker has to offer. Great Post.

JC Wood - RE/MAX Aerospace Realty

Brevard County Real Estate

I am a fairly new agent and I have to say I shake my head often at some of the things that goes on. Bad handwriting, blank fields, no return calls, the list goes on. Just because this is a competitive business doesn't mean we have to make it harder on one another. The reality is we are all in this together trying to make one deal at a time. When the frustration is the other agent...that is when my blood starts to boil.

Jody it is tough! I fully agree, there has to be a spirit of professionalism, and cooperation.

AUG

2007

That is a sad, but true, commentary on the current state of affairs in the real estate industry. The number of agents in Austin has almost QUADRUPLED since I got into the business about 11 years ago. Some of the contract mistakes are astounding to me. Worse, there are still far too many lenders that will take advantage of buyers who don't know any better.

Jason, you also reminded me that as a buyers agent... the buyers agent should be making sure everything is perfect for their buyers! Leaving blanks empty ....etc???? Does not make any sense!

AUG

2007

In North Carolina we just released a new contract. I attended the update class and I was astounded by the number of agents didn't even know about some forms. If they didn't properly complete the old forms how are they going to grasp all of the new changes. I find a lot of old agents get lax and forget things. IMO.

Tracy great observation! Whenever they introduce new contracts and you go to those sessions, it is astounding how many agents do not understand anything, and even the old contracts! It is beyond scary!

This is an all too common practice here as well. You can tell which agents got licensed when the market was hot just to capitalize. Hopefully this market will weed out some of it.

I nearly spit out my kool aid when I read some of these posts!

I see this stuff happen all the time and am amazed by it. I dealt with a broker earlier this year who called me two weeks after the option period ended begging me to get my client to agree to extend the OPT because he forgot to advise his client to get an inspection. In another case, a contract was received from a broker who wanted me to show the property, attend inspection, review the inspection report and write the amendment because that broker was going on vacation the next day for two weeks! An offer once came in with a cover letter giving the seller a 24-hour deadline to respond. When we responded, we heard nothing back--I called the buyers agent and left messages to no avail. Nearly a week later, the agent called wanting to schedule the inspection. That agent had gone on vacation and just assumed that we executed a contract in her absence and because MLS showed the property to be OPT she thought it was her client who was under OPT....Dit-duh-duh!

Makes me want to mix vodka with my kool aid sometimes, but there's too much work to get done!

Most of the time things run smoothly but these events certainly stand out.

David and Kristin You are right!

Amanda we just closed a few deals in Atlanta where the buyers agent never even knew we needed originals. Instead of an amendmendment, they re-wrote the entire contract without asking anyone. Scary. BTW, the agent also works a full time job in a fast food place. It was beyond comprehension the mistakes that were made!

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