Special offer

Special Stips Need All the Verbiage. Not, "Home Inspection Yada Yada Yada."

By
Real Estate Agent with Atlanta Communities Real Estate Brokerage GREC #208281

Agents really need to be careful when writing their own special stipulations.  Nothing in a real estate contract is implied.   You can't say, "Well, you know what I mean."  You need all of the  "if not, then what?" verbiage spelled out.

One recent example made me chuckle.

I received an offer on a condo listing of mine.  They had checked the box saying that they were buying it "as is".  But then they wrote a special stipulation as follows.

"Buyer shall have 10 days from binding agreement date to complete inspection."

I guess they thought that putting that in there made it contingent on an inspection and if there were issues, that special stipulation would allow them to terminate and get their earnest money back.  But it doesn't say any of that.  It just says that they shall have 10 days to do an inspection. 

When I received the offer, I called the agent to ask her why she wrote it up this wayinstead of just checking the "Due Diligence" clause in the contract. She said that that's how she likes to write it up.  She acted like she knew her stuff so I wasn't going to press the issue, especially when it pretty much made it a real "as is" offer for my seller. Her special stip says that they will do an inspection, it doesn't say anything about asking for repairs or being able to terminate the contract if they don't like what they find.

In Georgia, we have a really nice and easy Due Diligence clause in our contracts.  It spells out in detail that the buyer can do any inspections they want during this period and if for whatever reason they don't want to move forward, they can terminate the contract and get their earnest money back, no questions asked.  It doesn't get any easier or better for a buyer.

In this case, they did their  inspection and sent us a notice that they wanted $3000 in concessions.

I told her that it was "as is" and if they wanted to terminate that they should be prepared to lose their $6000 earnest money.

The agent told me how wrong I was about the earnest money because she had clearly written the special stipulation about doing a home inspection.  I asked her where in her special stipulation did it state anything about asking for concessions or getting earnest money back if they decided to terminate due to the inspection.

She came back with "It's implied.  Everyone knows what it means when you ask for an inspection."  She says that she does a lot of bank foreclosures and they are all "as is" with a 10 day inspection period.   I asked her if those bank contracts spelled out all of the details.  I told her that she might want to talk with her broker and get back with me. 

She got back with me and said that her buyer is fine with everything and is moving forward with the condo "as is". 

Don't go out of your way and make things more complicated than they need to be.  Just use the  contract the way it was meant to be used.  If necessary to make a change,  make sure you get professional legal advice.  Fortunately for her buyer, there wasn't anything wrong with the condo.  They were just trying to a better deal.  But what if there was something significant?  Her buyer would have been stuck.

 

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About the Author:  Tim Maitski has been a full time Realtor since 1999. He has sold several hundreds of homes in areas around metro Atlanta.  Tim started with RE/MAX Greater Atlanta and is now with Atlanta Communities Real Estate Brokerage.

 

Along with blogging on ActiveRain, he provides one of the best real estate websites in Atlanta at www.HomeAtlanta.com .

 

His proprietary  "Maitski Line Reports" chart out the absorption rates over the past 14 years in 37 different market areas.  Know when it's a good time to buy or a good time to sell.    

 

His online Property Tax Calculator allows you to compare property taxes in many counties and cities around the Atlanta area.  He provides the Atlanta MLS Power Search Tool that allows searches of homes using over 35 specific criteria.

 

Over the years, Tim has optimized his business so that he now can offer a huge 50% commission rebate to his buyers.  The more experience one gets, the easier the job becomes.

 

Tim also has a "Five Days to Sold" System that uses an intensive marketing blitz to create a showing frenzy that creates urgency and offers.

 

Tim is always looking to LinkIn with anyone who is interested in building their social network.

 

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Debbie Laity
Cedaredge Land Company - Cedaredge, CO
Your Real Estate Resource for Delta County, CO

I just had this happen recently. The buyer wanted a better deal and came up with issues on a bank owned house being sold as is. The buyer even signed the as is addendum. The asset manager was nice and let them have half the earnest money back...but purely to avoid any earnest money dispute.

Jun 23, 2011 04:36 PM
Leslie Ebersole
Swanepoel T3 Group - Saint Charles, IL
I help brokers build businesses they love.

Hi Tim: well, you should have know what I meant because everyone knows what the other guys meant when they did that.

I would love to see that get through grievance.....she was wise to have her client settle ;-).

 

Jun 23, 2011 04:37 PM
MichelleCherie Carr Crowe .Just Call. 408-252-8900
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Interesting news, you are right it's always best to "spell it out."

Jun 23, 2011 04:47 PM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Tim. Whatthe agent wrote is not even a contingency. It's just a statement. Is does absolutely nothing to protect the buyer. I guess this is why attorneys don't want agents writing contracts. Can you imagine standing in front of a judge trying to explain why you put that statement on a contract?

Jun 24, 2011 12:24 AM
Liz and Bill Spear
Transaction Alliance 513.520.5305 www.LizTour.com - Mason, OH
Transaction Alliance Cincinnati & Dayton suburbs

Tim, Always risky to start hand writing in things that aren't part of the contract!  Is there MORE than one way the phrase can be interpreted?  And more often than not, there is!  She and her buyers learned that lesson the hard way.  Write exactly what you mean or be prepared for the consequences.

Jun 24, 2011 01:43 AM