Almost Everything You Want to Know is Contained in the Purchase Contract

By
Real Estate Agent with RE/MAX Gold DRE #00697006

purchase contractsI'd say that 9 out of 10 questions received by Lyon Real Estate's lawyer could be answered by reading the purchase contract. Yet, very few real estate agents have ever read the purchase contract. They know which blanks to fill in (most of them, anyway), but I'm betting 9 out of 10 agents couldn't recite much less explain pertinent paragraphs in the contract. Yet, they ask buyers to sign purchase contracts. Does that make sense to you?

The first thing I typically do when I meet with new buyers is hand them our 10-page C.A.R. California Residential Purchase Agreement and Joint Escrow Instructions. Well, right after signing an agency disclosure. And I write on the first page "Paragraph 14-b1," point it out to them in the contract and explain what it means. (That paragraph, along with Liquidated Damages, are the most important elements, from a buyer's perspective.) I hope they take the time to read the contract before we actually fill it out and sign it, and if they don't, it's of their own choosing.

A few months ago, an agent in Midtown Sacramento wanted to give me a counter offer stating the buyer was purchasing the property in "as is" condition. We discussed this issue at great length because the clause was unnecessary. It's already contained in the purchase contract. After the listing agent pointed out this paragraph to his seller, the seller backed off.

I think buyers should ask whether the agent has read the contract. If not, it might be smarter to hire a different agent. (Agents: why not take a a purchase contract to lunch with you today and read it?)

Elizabeth Weintraub Land Park Real Estate Agent in Sacramento

Photo: Big Stock Photo

The Short Sale, by Elizabeth Weintraub, coming from Archer Ellison in January 2009.

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Elizabeth Weintraub is co-partner of Weintraub & Wallace Team of Top Producing Realtors, an author, home buying expert at The Balance, a Land Park resident, and a veteran real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown, Carmichael and East Sacramento, as well as tract homes in Elk Grove, Natomas, Roseville and Lincoln. Call Elizabeth Weintraub at 916.233.6759. Put our combined 80 years of real estate experience to work for you. Broker-Associate at RE/MAX Gold. DRE License # 00697006.

Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.The views expressed herein are Weintraub's personal views and do not reflect the views of RE/MAX Gold. Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice; it could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.

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Ambassador
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Elizabeth, even though contracts are promulgated by lawyers agents NEED to know what they say and the importance of the various paragraphs. They should be able to answer questions from their buyers about the meaning of the words.

Nov 29, 2008 02:19 AM #1
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C Tann-Starr
Tann Starr & Associates, Inc. - Palm Bay, FL

 

Featured @ Club Chaos

 

Nov 29, 2008 02:35 AM #2
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

That's true. I get addendums, duplicating paragrphs of the contract. It is all the time.

I also love when we send the offer, and the agent then tells us that we need to use another contract and some ofther proprietary forms "or they will not accept it". Who they? - The office manager.

-Is the office manager a principal to the transaction?

-Of course, not.

-How then can he/she even talk about accepting the offer?

And then I tell them that I do not work for their broker and office manager, so I do not really care much what they demand from their agents.

I always ask them why I need to use these forms. I am open to what they can say, I am ready to use it if they can explain me why, but they jus start whining that the manager will give them a hard time...

Nov 29, 2008 02:57 AM #3
Rainmaker
575,553
Terry & Bonnie Westbrook
Westbrook Realty Broker-Owner - Grand Rapids, MI
Westbrook Realty - Grand Rapids Forest Hills MI Re

Most agents are on auto pilot and assume they need to cove a question brought up by the buyer  when in fact it is in the printed portion of the contract. I just received a call from an irate agent that told me I had no right to remove his sign from the property. It had expired several days before and as I indicated the listing agreement specifically indicated all other sings can be removed.

Nov 29, 2008 04:18 AM #4
Rainmaker
1,928,220
Tom Braatz Waukesha County Real Estate 262-377-1459
Coldwell Banker - Oconomowoc, WI
Waukesha County Realtor Real Estate agent. SOLD!

Elizabeth

It's usually all there in the contract. What is not in a contract  correctly usually winds up in a Courthouse room one day.

All my best

Tom Braatz 

Nov 29, 2008 05:41 AM #5
Rainmaker
2,189,950
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

Hi Gary: Know what you mean. There's a difference between explaining the law and showing a buyer where to find the paragraph that concerns them in the contract.

Hi C: How cool for the feature. Thank you!

Hi Jon: Most of the addendums and disclosures are written to cover the agent's butt and, by extension, that of one's managing broker.

Hi Terry: Ha. So proof they don't read listing agreements, either. :)

Hi Tom: Even stuff that's in the contract ends up in the courtroom. Of course, nobody is in court for very long on those things. They typically get thrown out or dismissed.

Elizabeth Weintraub Land Park Real Estate Agent in Sacramento

Nov 29, 2008 09:07 AM #6
Rainmaker
416,376
Mesa, Arizona Real Estate Mesa Arizona Realtor
Homes Arizona Real Estate LLC - Mesa, AZ
AzLadyInRed

Elizabeth...yup, read it, and I, too, provide a copy of the contract - even on my website for the "potential" buyer to read first. In Arizona, we also have a Buyer Advisory acquainting anyone buying a home here about everything they could possibly need to know. Fissures, bugs, critters, etc.....;-)

Pepper

Nov 29, 2008 09:07 AM #7
Rainmaker
1,142,260
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Are we supposed to read the contract? I learn something new every day:)

Elizabeth, I'm sad to say that I agree with this post. What's sad is that the consumer, when hiring a REALTOR(R), shouild be able to assume that that person knows what they are doing. The consumer should feel protected. But alas.....that is so far from reality. Scary!!!

Nov 29, 2008 09:35 AM #8
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Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

Do you really think it's 90% that have not read it?  I have to defend a little here.  Not only did every agent who works for me take a "contract class" this year and last year (as we had new GAR contracts) we also saw many many many agents from our friends up and down the street.  The class was very thorough and they went over the contract paragraph by paragraph.  And we always send it home with new buyer clients to read.  It's rare that someone signs and offer the first day, but if that happens we give them time to read it.  90%?  Can it really be?  I'm dumb founded if it's anywhere near that high.

Nov 29, 2008 10:08 AM #9
Rainmaker
413,205
Lisa Heindel
Crescent City Living LLC - New Orleans, LA
New Orleans Real Estate Broker

While Tammy may be dumbfounded, I see this all of the time - counter offers with terms that were already contained in the contract, addendums with items already in the contract...it's sad disappointing that so many agents don't take the time to be sure they understand what they are having their clients sign.

Nov 29, 2008 10:11 AM #10
Rainmaker
2,189,950
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

Hi Teri: So how many buyers do you suppose actually read the contract on your site? I know many don't read it when I put it in front of them. That's why I point out certain paragraphs and ask them to read those and, even then, some don't. In fact, I tell buyers to read everything they sign and can count on one hand the number of buyers who have ever taken the time at closing to read their documents.

Hi BB: It is scary out there. It's difficult for buyers to figure out if they are dealing with an incompetent agent or a seasoned pro because they aren't given any benchmarks.

Hi Tammy: Yes, I do believe that 90% of the agents don't read the contracts. They are the same 90% of agents who aren't producing. I'm betting your agents, though, are above average because they have YOU to guide them.

Hi Lisa: I also believe that some agents are too worried that they'll be wrong to take a stand when a buyer suggests verbiage. They are too focused on whether the deal might not close than to do what is best for their clients, which is to educate and guide them.

Elizabeth Weintraub Land Park Real Estate Agent in Sacramento

Nov 30, 2008 01:14 AM #11
Ambassador
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Elizabeth:  It's a shame to think that knowing our contract is such a trivial matter to some agents.  I know mine inside and out.  I love going to contract classes.  It is the instrument through which my clients express their wishes with regard to a particular transaction.  What's more important than that?

Dec 01, 2008 12:30 AM #12
Rainmaker
2,189,950
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

Part of the problem, Chris Ann, may be the fact that most agents can't remember what's in the contract because they fill out so few of them. I think stats say the average real estate agent sells 3 or 4 homes a year.

Elizabeth Weintraub Land Park Real Estate Agent in Sacramento

Dec 01, 2008 01:41 AM #13
Rainmaker
416,376
Mesa, Arizona Real Estate Mesa Arizona Realtor
Homes Arizona Real Estate LLC - Mesa, AZ
AzLadyInRed

Elizabeth, I doubt if many do read it, and I, too point out particular paragraphs and lines as they sign and date each of the nine pages. I don't know how many read it on my site at all, but it's there just in case. Fortunately there are a "few" that will educate the buyers, but others don't care I suppose. ;-)

I do think that buyers need to be a bit proactive though.....and ask questions and read what they are agreeing to do, don't you? At least some of the onus belongs to the buyer.....

Pepper

Dec 01, 2008 04:55 AM #14
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