Unconditional Offers ~ Informed Consent Acknowledgment
By Brian Madigan LL.B.
We know that there are risks associated with the unconditional Offer. The question from the perspective of the real estate agent is how to minimize them.
First, the issue needs to be identified, discussed and recorded or noted by the agent in some way. That information needs to be placed in a file.
Second, an e-mail summary of the issue should follow. A response is not necessary, but it demonstrates that the client was aware of the issue, well in advance and at a time when they were not under pressure.
Third, there should be some sort of form or document that will confirm the final decision.
That document could look something like the following:
Buyers’ Informed Consent Acknowledgement
Authorization to Submit Unconditional Offer
To: ABC Realty, Inc., Brokerage
Property: ________________________________________
The Undersigned acknowledge that they have been advised by _____________________________ of the substantial and material risks associated with the submission of an unconditional Offer, which upon acceptance by the sellers will result in a firm and binding Agreement of Purchase and Sale.
Failure to complete the Agreement in accordance with its terms will expose us to the loss of our deposit and a claim for any damages sustained by the sellers in addition to the deposit.
The Undersigned acknowledge that they have had the opportunity to obtain legal and financial advice and they are nevertheless prepared to proceed.
The Undersigned hereby authorize ABC Realty Inc., Brokerage and ________________________ to submit an unconditional Offer on the above property, without the following suggested conditions:
Financing – Mortgage Approval _____
Financing – Satisfactory Appraisal _____
Home Inspection _____
Compliance – Zoning and Building By-laws _____
Other __________________________ _____
The Undersigned with full knowledge and consent, elect to proceed with the submission of an unconditional Offer, accept the risks associated with such, and agree not to make any claim as against the sales representative, broker or ABC Realty Inc. arising as a result of such decision.
Dated at Toronto at ______(am/pm) this ______ day of ________ 2012.
___________________ ____________________
witness Buyer
___________________ ____________________
witness Buyer
Comment
The Form is far from perfect, but it does show that the matter was discussed in advance. And, that’s the fundamental purpose. It also reinforces that the deal is firm and there is an exposure to the loss of the deposit plus damages.
In situations where disputes arise, clients and customers will often indicate that they never understood those risks, and further may often claim that the risks were never, ever explained.
The document is “time sensitive”, so the actual time should be inserted. Each of the suggested conditions which are omitted should be initialled.
Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through RE/MAX West Realty Inc., Brokerage 416-745-2300.
www.OntarioRealEstateSource.com
Comments(5)