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What does the contract say?

By
Real Estate Broker/Owner with Cornerstone Business Group Inc 0225086119

If there is one thing my agents hear me say over and over, it is, "What does the contract say?" We're in a business that is dependent on all players responding to details laid out in a contract. Over the past year, I've seen more agents outside of my office try to ignore what's in contracts, or they've tried to change the meaning of clear language in contracts and often that is days before a closing.

One of my agents called yesterday saying that the buyers on one of her listings want additional work done on the property that is closing today. Of course, I immediately asked, "What does the contract say?" She read it to me. I then asked what the sellers did in response to the contract, and she relayed what they did. The complied with the contract.

I did encourage her to share with the buyer's agent that the buyer-clients would be in default if they didn't follow through with the contractual terms. They had no right to demand additional items be done once everything was agreed to and signed by all. They were not entitled to not close due to new things they wanted. The issues they wanted changed were already addressed in the contract and dealt with. I think they didn't like the outcome of what they agreed to, and they wanted it different. Sadly, what was done, was what they asked for and it was done exactly as agreed upon by all.

I had to pull the "the contract says" card on a buyer's agent on one of my listing just two weeks ago. The buyers are whining about a few things that they were not entitled to, just days before closing. They were threatening not to close unless my client did XYZ. I did encourage the buyer's agent to get control of her clients before things got ugly, and I promised her that it would get ugly, and they complied. I hate having to do business like that. Buyers and sellers need to let the contract speak when they have a disagreement. They both signed the contract in the beginning of the deal. Let it be the guide to the end. 

The bottom line is, we are in a business that is dependent on contracts and contractual agreements. Once those contracts are signed by all, they are binding unless everyone agrees to a change. If one party is not willing to change something, the contract stands. What does the contract say? 

Comments(34)

Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

It’s in the contract 99% of the time and when it’s not is the time it’s really a problem. I’ve gotten surprised a couple times too, Tammy,

Tammy Lankford,

Mar 05, 2019 09:37 PM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

Absolutely, the contract has the answer(s)!

Mar 06, 2019 03:52 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Funny you should mention that, Mike. I can't tell you how often I've had to utter those very words about what the contract says!

Mar 06, 2019 04:02 AM
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Mike. This is wonderful and smart. It is pretty simple and straight-forward actually. Well done.

Mar 06, 2019 06:01 AM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

"What does the contract say?"  I've used that sentence multiple times over the years.  There will always be those who try to circumvent the contract, but the contract is the contract!

Mar 06, 2019 04:14 PM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

CONGRATULATIONS Mike, on having this blog FEATURED in the Old Farts Club group!  

Mar 06, 2019 04:15 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Mike:

Well said! It's always interesting how referring to the wording in the contract that's been agreed to, in writing, tends to simmer things down when they get dicey. Seems some forget what they agreed to!

Jeff

Mar 06, 2019 08:51 PM
Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
Retired New Hampshire Home Stager

Bottom line...literally!

It all falls back on the contract!

Congratulations on a well deserved feature!

Mar 07, 2019 06:36 AM
Beth Atalay
Cam Realty and Property Management - Clermont, FL
Cam Realty of Clermont FL

Hi Mike, I'm amazed to see how many agents don't read the contract. We have them in place for a reason. Congratulations on the well deserved feature!

Mar 07, 2019 06:43 AM
John Wiley
Fort Myers, FL
Lee County, FL, ECO Broker, GRI, SRES,GREEN,PSA

I think that one of the most neglected areas of an agents training is the in-depth study of the contract.

The contract is the everything about the transaction. It is a legal document. I am surprised more agents don't have their license revoked because they do not properly use the contract.

Thanks for a great post.

Mar 07, 2019 09:10 AM
John Van Hogen
Keller Williams Realty Professionals - Hillsboro, OR
Serving Sellers / Buyers / Investors 503-680-9390

As Tammy and Beth said, it's amazes me how many agents I've interacted with who have/do not read (or explain to their clients?) the transaction documents.   

Mar 07, 2019 10:13 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Mike Cooper, GRI  Buyers tend to get bossy and unless we keep control of the situation things can get ugly. They are under stress and instead of packing and doing what they should be doing their minds start to wonder. Just hung up from one of my clients who want to know exact figures for closing. Closing is forty-five days away.

Mar 07, 2019 10:54 AM
Mike Cooper, Broker VA,WV

Well said, Hannah Williams.

Mar 08, 2019 12:31 PM
Melissa Spittel
Coldwell Banker Residential Brokerage - Westminster, MD
"Achieving Results Together "

It's amazing how some buyers, sellers and/or agents treat the contract like it's some sort of "guide". I always make it clear to my clients that it is a binding agreement. "What does the contract say" is the perfect title for this blog post!

Mar 07, 2019 11:18 AM
Debb Janes
Nature As Neighbors - Camas, WA
Put My Love of Nature At Work for You

The contract is the holy grail. What's in writing and what is agreed to is what happens. Period. 

Mar 07, 2019 11:31 AM
John Henry, Florida Architect
John Henry Masterworks Design International, Inc. - Orlando, FL
Residential Architect, Luxury Custom Home Design

Contracts are useful if both parties have equal weight.  Contracts are routinely broken when one party has 'staying power' over another in court, even if they are in the wrong.

Mar 07, 2019 01:12 PM
Sarah Layton | Copywriter & Inman Star Contributor
Best Real Estate Writer, a Layton Media brand - Bradenton, FL
Offers VIP Blogging, Content or SEO Strategy Days

I used to work in title where I would handle dozens of new contracts every day. I can't begin to tell you how many agents who despite having been in the business for years or decades clearly had NO IDEA what the contract said or how to fill it out! It was one of the most disturbing parts of that job. 

Mar 08, 2019 05:25 AM
Mike Cooper, Broker VA,WV

Sarah, I see it all the time too. It's horrifying that people who are working in a contractual field have no idea what the contract says. 

Mar 08, 2019 12:29 PM
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

I say this as well!  And before I take buyers out looking, I go over the contract line by line so they know what to expect. Then when writing the offer, I again hit the important highlights re: deadlines, inspections.

Mar 09, 2019 09:41 AM
Mike Cooper, Broker VA,WV

That's a smart approach, Mary.

Mar 09, 2019 10:32 AM
Elyse Berman, PA
LoKation Real Estate - Boca Raton, FL
Boca Raton FL (561) 716-7824

Mike Cooper, GRI I learned that from my brokers early on.  One would say, "know your contracts" and the other always said, "it always goes back to the contract."  

Mar 09, 2019 04:47 PM
Dave Rosenmarkle
Highland Realty, Inc - Fairfax, VA
33 years of providing fully satisfying service!

It's nearly impossible to be or go wrong if the full substance of the transaction is guided by what's in the contract. Period.

Mar 19, 2019 11:04 AM
Krista Jenkins, REALTOR®
klm Real Estate - Lubbock, TX
Residential sales and retail & office leasing

Some parties do seem to gloss over the "legally binding" part.

Mar 19, 2019 04:06 PM