Do I Have To Read The Contract?

Hi Margaret-I don't know if parents still tell their children this but growing up we had it drummed into us not to sign anything we had not read or understood.  Good agents know this and take great pains to go over every detail with their clients 

Hey Margaret Rome Baltimore 410-530-2400, this post is spot on! 🎯 It's crazy how many folks gloss over those crucial details. Thanks for highlighting the importance of really digging into contracts! 👍

Good evening Margaret,

What a great topic! I always go through our contracts especially now with the change in  how the compensation is stated. I had another offer from an agent who had filled out compensation  wrong...she had her compensation in both places...seller contribution and broker to broker. Then she had me as the listing agent acting in Intermediary! Yikes..needs to be back for more training.

Thank you very much, Margaret, for sharing this story. Reviewing and explaining the contract can help avoid misunderstandings.

Good morning, Margaret... I don't go through contracts line by line with clients, especially with those who are repeat clients. But I do review in detail changes to our contracts since the last time they bought or sold and I do summarize all the key points.

It's very important to know the contract that we are asking our clients to sign, since there is a lot of legal language within it that can be confusing.

In NY attorney's handle contracts- though we now have the issue of the buyer's representation agreements. For the purchase/sale- while the contracts tend to be boilerplate- most of the actual details that matter are all custom in the rider.  The better buyer attorney's that I have worked with lay out the risks identified in the building/apartment. The seller side risks are usually more about the buyers situation. 

As far as the new buyer representation agreements- agents (at least in my firm) are using boilerplate agreements- very easy to understand. The complication- which I am working on this afternoon is in the instance where a seller (in this case and most frequently- a developer) is paying more than we asked for in the initial agreement. In this case, I am working with my managing broker to come up with a new agreement with language that permits me to accept the higher commission- but also doesn't obligate the buyer to pay the premium if they ultimately select a different new construction building that doesn't offer the commission that is higher than we initially agreed. I hate this type of administrative work- just a lot more friction for the consumer and more work on our end as well. Previously I would just tell the client- this developer pays this % and the other developer pays me this %- just so they knew- but that was the entire process- frictionless for the consumer. I am showing the client value in either instance- and ways to negotiate that they wouldn't have even thought was realistic- so far, they are happy to renegotiate and I get paid more. 

It is difficult to imagine not reading a document as important as a real estate contract. But alas, some just sign away with little or no regard to what is in the document.

I would say yes yes yes yes yes to everything and leave it at that and live to see success with my house if I were that person.

Years ago I was scared-off by our "suits" from explaining line-by-line because that could be construed as "acting as an attorney"... which we are not allowed to do.  We are told, that if our clients have questions or concerns about the contract we are to refer them to their real estate attorneys (we use attorneys on 99% of our transactions in our area).

But I like to make sure that my clients understand what they are signing, so while I do not go line-by-line, I do like to make sure they understand what they're signing.

The electronic signature process makes it much more common for people to sign things they don't read or understand. I would guess most people don't bother reading contracts or disclosures now than when they were discussed in person. I made sure my clients knew they needed to understand everything in the contract. And I was brought up to never sign anything without reading it. That being said, I admit I do not read disclosures when downloading new apps. But I should.

I do not know how many agents explain the contract Miss Margaret Rome Baltimore 410-530-2400 

I know that I do. An attorney client years ago instructed me to just send it and he will sign it. I asked him to indulge me for a few minutes because it is essential that I explain what he is signing. 

If I am ever asked, Miss Daniels, did you explain the contract to your client? 

The answer will always be ... YES, your Honor. 

My communication log notes the date, time and duration. 

This is such a great point, Margaret. I think we’ve definitely become a culture where, like Fred mentioned, we hear “just sign here…” so often that we rarely pause to ask what we’re signing. How many of us have been handed a clipboard at a doctor’s office and told to sign each line because “they’re just standard disclosures”—without ever actually reading what we’re agreeing to?

That’s why I love that your client felt comfortable enough to slow down, ask questions, and truly understand the agreement. It’s a great reminder of how important it is for us as agents to really know our contracts and be prepared to explain them clearly and confidently. It’s encouraging to see so many professionals in this community who are committed to building trust through education and transparency!

Hello Margaret - understanding the abundant documentation in a real estate transaction is important to a practitioner.   Isn't explaining it to the principal part of representation?  

ALL of the contract - what a great reminder for Buyers (and their Agents).  BUyers in our area are sometimes finding that they owe Tax Stamps, which is normally paid by the Seller - but hey they agreed to it!

Congratulations on the feature and I wish my agents would read the contract. Enough said.

I appreciate it when a client asks questions about the documents that need to be signed. It shows intelligence and caution and that, although they trust me, they still want to understand the process and procedure of either buying or selling a house.