Andrew Wetzel's Musings

May 26, 2017

What is the basis for any Real Estate transaction?

Filed under: Uncategorized — awetzel @ 4:42 PM

The PAR (PA Association of Realtors) Agreement of Sale has grown in length over the years and is quite a daunting document for many agents and consumers. I wish I had more confidence that consumers fully understood what they were signing when they put pen to paper. Disagreements arising from Real Estate sales often involve assertions that the contract was not thoroughly explained. I think people should refuse to sign anything that is not crystal clear to them and it basically says that.

Consumers often complain that the paperwork has gotten too complicated. The documents we use are constantly reviewed at the state and local levels and most changes are the result of changes in the law. In PA we use a “fill in the blank form” approved at the state level. In addition, our Code of Ethics warns against “practicing law” so we are limited in what we can add to the standard form. The essence of the agreement is that it records the details agreed upon by the parties.

By making an offer, negotiating it and accepting a final version, both parties agree to perform certain tasks necessary to protect themselves as well as to satisfy the needs of the other.  Ironically, many of my older clients have commented that the current contract is less binding than a good old-fashioned handshake “back in the day”. The real question is whether a signed document really binds both parties?

Legally, I presume a properly executed and delivered contract is enforceable if a party wants to enforce it. Doing so, however proper it may seem, has a cost both in terms of dollars and time. While I expect my client and the other principal to take the executed contract seriously, I have come to realize that all agreements, no matter how lengthy, detailed or seemingly binding, are based on one simple word. That word describes what used to make a simple handshake so valuable. The word is TRUST.

Once I return an executed contract to another agent, I expect that that agent, their client and my client will live up to the responsibilities set forth within the agreement. Anything which causes the agreement to need to be modified should be properly reported and addressed in a timely manner. Trust is expected and it is reinforced or lost over the course of a single transaction and it carries forward as agents and consumers work together again and again. Once lost, the path gets more difficult.

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