When Realtors are permitted to practice law...

Real Estate Agent with RE/MAX Compass, formerly RE/MAX WHP 0524642

Realtors who don't possess a license to practice law should never play attorney. In Texas our contracts have blank areas referred to as Special Provisions. It's here that the principles (buyer and seller) can write just about anything they want. Here's a good example: "Buyer will have appraisal performed within 15 days of the the contract being executed or the contract will terminate and the earnest money will be forfeited to the seller." 

Here's a poor example, "Seller will make all repairs to the home above $500 or buyer can cancel the contract at any time and without notice. Seller agrees to forfeit all plasma televisions and beer in the fridge as consideration for liquidated damages."


Sometimes the clients can get carried away with a special provisions clause. Expectations should be sensible and certainly legal. 

But Realtors are not permitted to write anything they want in Special Provisions unless they are licensed attorneys. Factual statements, yes, but legal goobly gook, no. 


special provisions



But what if the buyer is a Realtor and the seller is a Realtor? Do the rules of Special Provisions still apply? Can the buyer (who is a Realtor) write something like this.... "If seller leaves any trash in the home during final-walk, buyer can terminate the contract without recourse and the entire earnest money will be refunded to the buyer. Seller will also rebate the buyer for the cost of inspections and appraisal in the amount of one thousand dollars. Additionally, the seller agrees to allow the buyer to post a "JUST SOLD BY BUYER AGENT BILLY" sign into the yard 10 days before closing. Buyer's agent can attach balloons to said sign. If SELLER IS HOME DURING INSPECTIONS SELLER AGREES TO A $500.00 price reduction."


Clearly the statement above is not a "factual statement" but more of a conditional threat with financial consequences. Let us also assume that both the buyer and seller are single. There are no spouses or other legal owners.


I learned the answer. I'll share it in a few days....



Posted by


Greg Nino
, Houston area Realtor®.
Helping residential buyers, sellers and tenants 7 days a week.
Available @ 832-298-8555 

RE/MAX Compass (Formerly RE/MAX WHP)





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Les & Sarah Oswald
Realty One Group - Eastvale, CA
Broker, Realtor and Investor

Waiting to see what is the correct answer. It is interesting to see how contract practices differ in different parts of the country. 

Aug 27, 2016 04:35 AM #1
Paul S. Henderson, REALTOR®, CRS
RE/MAX Northwest. - Tacoma, WA
Tacoma Washington Agent/Broker & Market Authority!

 Looks like number 11 was written for lawyers by lawyers Greg Nino 

Aug 27, 2016 05:41 AM #2
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

If we are at all concerned there could be some conflict as the the (we call them special stipulations in Georgia) SS, we have an attorney draft that portion of the agreement. But we have lots of "standard" clauses built into our state forms that work for most stuff.  

Aug 27, 2016 06:22 AM #3
Jody Wall

I want to see the correct answer.  However, if I were to get a contract with things like that written in it, Billy would be looking for someone else to do a deal with.  Furthermore if Billy were an agent, I would likely forward an examply of said contract to his broker and the board of Realtors with the question, "Can we do this as agents?"

Aug 27, 2016 08:19 AM #4
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

Greg ... those are the kind of land mines that agents create and ultimately step on.  They can be pretty painful ... and costly. 

Aug 27, 2016 11:06 AM #5
Doug Rogers
Bayou Properties - Alexandria, LA
Your Alexandria Louisiana Agent

What's super-fancy is when the agent misspells something. Punctuation is also a cool value add.

Aug 31, 2016 04:55 AM #6
Brittney Newton
Expert Prospecting - Lawton, OK
President, Owner

Goodness! I hope that this wasn't a costly mistake for you. I feel that contracts should be much easier to read and understand, and that the guidelines that were set weren't so gray sometimes. 

Here's an unrelated contract story for ya. A fellow realtor/co-worker of mine made the mistake of not putting how much comission she would be getting on a hud contract. The contract was signed and the deal was set to close with her not making a dime. Luckily, the deal fell through pretty quickly and she wasn't stuck working for free. It sucks learning lessons the hard way! 

Sep 16, 2016 08:56 AM #7
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Wow! Thanks for telling us about your Special Provisions clause. You certainly have to carefully read that section before accepting a contract.

Sep 19, 2016 10:18 AM #8
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Did you tell us . . . or are you keeping us in suspense . . . LMAO.

Oct 23, 2016 06:43 AM #9
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Greg Nino

Houston, Texas
Providing Real Estate Advice 7 days a week!
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