My REALTOR® friend, Patti, reminded me of one of the most basic rules of real estate; it takes two to sell and one to buy. This adage echoes what should be common sense and yet, it’s fairly common for us to receive listings and offers signed by other than the principal (the real purchaser or the seller) or a representative with proper power of attorney. When listing a property, REALTORS® must usually depend (initially) on real property tax records and information given by the seller. Suffice it to say that there are sometimes ownership surprises when the title report is received. In one recent transaction, the title report revealed a completely different owner than the one who accepted the offer and the person on title was different from the owner listed on the tax rolls. Luckily, we successfully untangled that one.
Commonly, title is vested in more sellers than initially disclosed. I recently read a legal opinion which indicated that clear written intent to sell should suffice as a seller’s agreement to sell. Here’s the problem. Listing and selling involve much more than simple permission. Among other things, it includes seller’s declarations regarding the property; inclusions, maintenance fees, utilities and the like. Sellers are required to make full disclosure, they are asked to assist with the sale and much more. A listing agreement is the express employment agreement between seller and their agent. Naturally, a sales contract, when accepted by all owners, may negate the need for a listing agreement but unless all sellers unanimously agree to the terms of the sale, problems could occur at any step along the way.
Sales contracts received without all required signatures are non-binding on the sellers who do not sign. It’s little more than an agreement to possibly agree. Buyers and sellers who receive offers acknowledged by a personal representative, whether it be the sales agent, a spouse or a friend, acting without proper power of attorney, should realize that such agreements have little validity. In the case of a sales agreement, Patti is correct. It only takes one signature. A purchase agreement might contain multiple names but it’s the person who signs the contract who is bound (even if it’s the real estate agent). Here are a few important guidelines about signatures. First, make sure the seller is really the owner. Secondly, make sure all owners have signed the sales contract or in the case of the buyer, make sure the person who signs is, in fact, the purchaser. Lastly, when dealing with absentee sellers (especially foreigners) or multiple owners, life is much simpler if someone has power of attorney. Escrow will want a specific power of attorney relating to the sale at hand. Escrow companies are happy to assist with this. When it comes time to sign, everyone on both sides of the transaction must definitely sign.
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