Market Condition Advisory

Real Estate Agent with RE/MAX Peak Properties

Back in the old days three to four years ago when everything in the real estate world was hunky dory no one thought or seemed to care about what the market may look like in a few years.  Life was good and if you bought real estate you could expect its value to increase.  Then quite suddenly conditions began to change.  The real estate market suddenly went south and property owners who had bought during those times found themselves in properties that were worth far less than when they had purchased.

Given the declining real estate market the past couple of years, The Arizona Association of Realtors in August of 2009 developed a one page paper entitled "Market Conditions Advisory".  The advisory is a form now used by many realtors when negotiating a contract to advise both buyers and sellers about potential future market conditions.  Buyers and sellers are asked to read and acknowledge by signing the document.

The form states in part:

•§  The real estate market is cyclical and real estate values go up and down. The financial market also changes, affecting the terms on which a lender will agree to loan money on real property. It is impossible to accurately predict what the real estate or financial market conditions will be at any given time.

•§  The ultimate decision on the price a Buyer is willing to pay and the price a Seller is willing to accept for a specific property rests solely with the individual Buyer or Seller. The parties to a real estate transaction must decide on what price and terms they are willing to buy or sell in light of market conditions, their own financial resources and their own unique circumstances.

•§  The parties must, upon careful deliberation, decide how much risk they are willing to assume in a transaction. Any waiver of contingencies, rights or warranties in the Contract may have adverse consequences. Buyer and Seller acknowledge that they understand these risks.

There is more to the document that I have not included in this article, but I think you get the point.  The intent is that all parties to a real estate transaction should understand the implications and risk of buying and selling real estate.  No one knows what the market will be like tomorrow, next year or in five years.  If you are interested in viewing the entire advisory I have posted a sample copy on my website at

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