Don't just think you know the contract.....really know it!!

By
Real Estate Agent with Realty Executives

This may come off as a bit of an rant and I'm sorry.  I was speaking with another agent today, who seems to think he knows it all. 

There is a common misconception that an As-Is addendum to a property means that the sellers will make no repairs.  This is simply not true.  If you read the contact (at least here in AZ) all an as-is addendum does is voids the section in the contacts that hold warranties on the property. It also makes no warranties as to the zoning and other uses of the premises.  No where in the contract does it state that the buyer gives up their right to negotiate repairs or credits for repairs on the property.

I got a call from an agent today who represents the bank of a foreclosed property that one of my clients has an offer on.  Right off the bat we knew of several issues with the property..(holes is walls, pet soiled flooring, painting, cleaning etc.)  We elected to do an inspection and found several other issues with the property that we were not expecting (the house is only 3 years old).   We sent notice to the bank asking for repairs or credits for these unexpected items.  The agent called me back and acted like I didn't know what I was doing, because the property was sold As-Is.

I informed him that I have been doing this for a while and knew the contract and the As-Is addendum well.  I explained that signing the addendum did not take away our right for inspection negotiation.  Obviously the bank is welcome to deny our requests, but nonetheless, we have the right to make them.  He told me that he strongly disagreed with my way of thinking.  I then replied...you don't have to agree with me, just read the contract and the addendum.  Well, he hung up in a huff and I have not yet heard back from him.

My problem is this, we are the professionals in this business.  We should know what our documents say.  This agent should have stated in the contract....."Seller will not make or negotiate any repairs to property" along with the As-Is addendum.  But he didn't and obviously he's never read the addendum.

I feel much better now that I've gotten that off my chest!!

Thank you.

 

Comments (9)

Lynda Eisenmann
Preferred Home Brokers - Brea, CA
Broker-Owner,CRS,GRI,SRES, Brea,CA, Orange Co

Nora,

Good info. I can't begin to tell you how many people in CA have difficulty with our purchase agreement. It's the foundation of the entire contract. Realtors should know it, inside and out, frontwards to back. It's the one thing I really get on my soap box about with agents in my office.

Sep 08, 2007 04:57 PM
Renee L. Norton
Birmingham, AL
Thanks for sharing this.  I have show some bank owned properties today.  I know my client will want an inspection and the ability to get out of the contract if anything major if found to be wrong, should she decide to make an offer.  I haven't started reading the addendums yet, as the banks typically have their own.  I'm waiting to see which, if any, she elects to make an offer on.
Sep 08, 2007 05:03 PM
Brian Brumpton
Keller Williams Boise - Boise, ID
Boise Idaho Real Estate

Nora,

I agree with you, there is not near enough time spent teaching agents how to write contracts or what each peace means.  As far as the short sale issue, the bank does have the final say and I've never seen them agree to repairs.  The price negotiated on the property should reflect the deductions made for needed repairs.  While you have the right to request them, your contract most likely will not be accepted by the bank and they may have been the point the other agent was trying to make. 

Sep 08, 2007 05:08 PM
Nora Adkins
Realty Executives - Tucson, AZ

Lynda & Renee  - Thanks for your comments.

Brian - You are right the bank can say no...but who knows, we are in a different market right now and I think the banks will begin to work with us more then in the past.  Unfortunately the other agent in this deal was trying to be difficult.  His job is submit it to the bank and let them make the decision, not argue with me over our right to request it.  Thanks for your comments.

Sep 08, 2007 05:14 PM
Bill Sauneuf
John L. Scott Real Estate / Yelm - Mount Vernon, WA

Its amazing how little so many agents know about the contracts.  They are the agreement and the agents that put them together often barely have a clue as to what they say.... Very scary!

Glad you know your contracts and glad you stuck to your guns.  If the agent continues to push an irresponsible point, you might call the agent's broker or have your broker do a broker to broker chat to straighten things out.  If it can be done without too much of an insult...

Good luck!

-Bill
Bill@Sauneuf.com
http://www.Sauneuf.com

 

Sep 08, 2007 05:45 PM
Konnie Mac McCarthy
MacNificent Properties, LLC - Cobb Island, MD
Broker/Owner - VA & MD "Time To Get A Move On!"
You  are so right...that is the one of the first things I was told when I became an agent...know the contract...but it is a good reminder to all of us to know the contract....
Sep 09, 2007 12:56 AM
Nora Adkins
Realty Executives - Tucson, AZ

Bill - Thanks for the comments.

Erica - I have worked with some banks that have given credits for repairs.  Inspections cost about $200+ so I don't like doing them until I know that we are in contract and aren't going to get beat out by someone else.  Thanks for your comments.

Sep 09, 2007 03:11 AM
Anonymous
Anonymous

I am appalled daily by the ineptness in our business.  The problem is that any one can get a license, all you have to do is pass the test, and you get more than one chance to do so.  I think a college degree should also be added as a REQUIREMENT, a minor in Business law would'nt hurt either!  Most folks would not bother to get into the business if this were the case.  I myself am drawn to law, I have a passion for the legal aspects of law and documents.  I'm like, I wish I had gotten into law...then again, I guess I am.  8 years in the RE business, Jacksonville, FL is my market (moved here from N Michigan in 98)!  Godspeed ya'all!!

Aug 13, 2008 12:06 AM
#9