The inspiration for some articles is an event, a lawsuit, a new form, a problem or a problem resolved. In this article, I am mostly repeating previous advice for those who are repeating bad habits or for whom the advice did not stick!
First on the list, do not meet with an investigator from the Commonwealth without first consulting your attorney. The Bureau of Enforcement Investigation (BEI) investigates complaints levied against real estate licensees. The investigation may lead to discipline by the Real Estate Commission that may take a form of substantial fines, suspension and even revocation of a real estate license. It’s no small matter! You may feel no threat because these investigators generally are nice folk who want to complete their tasks and submit their reports to the prosecutors at the Bureau of Professional and Occupational Affairs. You may, however, feel differently when they take the stand and testify against you. The investigatory stage is the place to begin your defense even when you don’t perceive a threat.
Number two on the list is be more specific in describing acreage. When a property is described merely by its address or tax number, there may be no recourse for the buyer when it turns out the actual conveyance is well under the acreage advertised. Representations, brochures, the MLS description and the like do not establish the quantum of land sold because the agreement makes clear (see paragraph 25) that it is the agreement alone that is binding. So, if the agreement describes the property only as 123 Rural Rd., and regardless if a tax number is provided, the buyer may have no recourse when it is 20 acres and not the 30 acres advertised. Add to the description in the agreement “….consisting of no less than 30 acres; this representation to survive settlement.”
Let’s stay with paragraph 25 of the agreement for the next tip. This provision precludes any promise or agreement between the parties that isn’t written into the agreement. What other promises is the buyer relying on that should be in the agreement; that the sump pump was installed “just in case” and never has been activated by water infiltration? That the solar panels are owned by the seller and included in the sale? I’m sure you can think of plenty of examples of representations that should be spelled out in the agreement.
This tip is brought to you by the sellers’ market many of you are experiencing. Don’t tell your buyers to waive contingencies. Yes, explain that in a competitive market there will be buyers who will take greater risk by waiving mortgage or inspection contingencies. Explain the dangers of doing so and that since it is the buyer who will be accepting the risks it must be the buyer who elects waiver and not you.
Now we go to listings. When interviewing, do you ask the seller to provide a recent mortgage statement, property tax records and the like? Do you ask whether there are any other liens such as IRS liens, equity loans, judgments that may exist? Its personal but it impacts your ability to sell and get paid!
Do you review the seller disclosure? Do so regardless of your representing the seller or buyer. Are all sections complete? Are the “yes” explanations clear and unambiguous?
Learn to count…..the days. No, holidays and weekends are not exempt…they are days to be counted! And when do we start counting? When the agreement is signed…so that a day later we can say “one”, one day has passed!
Lastly, for now, make good use of email. So much of what you do is by oral communication, and most of that is via phone. Whether talking to your client or another agent, it is always advisable to follow with a short confirming email. “We discussed whether you wanted to bring a contractor to see if the past termite infestation noted has caused any structural damage.” How else will you prove that you gave the advice?