READ THE CONTRACT!

READ THE CONTRACT!

  I get so many calls from clients and agents asking me questions. Sure, I can just give them the answer, and ultimately, I do, but I also ask, “have you read the contract?” When was the last time you signed something you didn’t read? Think about it. I bet it was more recent than you remember. Did you click, “I agree” to something online without reading it so you could move on to the next step? Did you sign a car rental contract or a form at the doctor’s office without reading it? We are all guilty of it. I wonder what sort of issues we could get into from some of the legal documents we sign that we don’t read. We don’t know! Well, the legal ramifications of us not reading the 20 items before we click “I agree” to buy a song on iTunes is probably much less than they are on a purchase and sale agreement in real estate. When everything goes as planned and both parties do their part and the sale closes without incident, no problem. However, what happens when it doesn’t? Do you know how you can lose your earnest money? Are you sure? Do you know how you can keep a Buyer’s earnest money? Are you sure? Do you know how you can get out of a contract? Do you know how many days you have to apply for your loan? Did you know a Buyer needs to provide notice to the Seller that the appraisal has been ordered – and paid for? Do you know how long the parties have for inspections? What is a resolution period? When does it start? And how long is it? If you write multiple Counter Offers, do all the points on all the forms go into effect? Can I take the custom drapes that I had made for my Dining Room? What is a fixture? I can take the rose bush that was my mother’s that is planted in the backyard, right? I said I was getting a Conventional loan but changed my mind, does this matter? What are the things I have to pay for at closing? Wait a minute! I got to closing and there is a charge for Transfer Fee that I am having to pay for. What is that and why do I have to pay for it? What’s a performance deadline? Most of these items are answered in the Purchase and Sale Agreement. If you read it, you will know the answer to it. A few are more detailed and are things that only good agents may know the answer to (rose bush). These are just some reasons to...

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What is a Buyer’s Representation Agreement Anyway?

What is a Buyer’s Representation Agreement Anyway?

  You are in the market for a house. You find a Realtor. They are a family friend, or a referral from a friend, or you found them on the internet. You meet with them and they ask you to sign a contract to represent you. Wait, you haven’t even found a house. What is a Buyer’s Representation Agreement anyway? What does it mean, and should you sign it? First let’s look at the different types of Buyer representation agreements. (Disclaimer: This is for the State of Tennessee. You will want to check with your state to find out what types they use.) There are two main types with two sub-types. There are Exclusive and Non-Exclusive as well as Buyer Agency and Designated Agency. Exclusive Buyer’s Representation Agreement: This is an agreement that says the agent or company is the only agent or company that has the right to represent the buyer in a residential real estate transaction. Non-exclusive Buyer’s Representation Agreement: This agreement allows a Buyer to hire more than one agent or company to represent them in a residential real estate transaction. Buyer Agency: Under this type of Buyer’s Representation Agreement, the entire real estate company technically represent the Buyer. Designated Agency: This type of Buyer’s Representation Agreement will designate one agent in a company to represent the Buyer. Why would you sign them? Exclusive Buyer’s Representation Agreement – Buyer Agency/Designated Agency: A Buyer has one agent or one company working for them. Some buyers may think they will get more results if they hire more than one agent. In my experience, agents/companies tend to work harder for the buyers that are working with them exclusively. This type of agreement obligates both parties to each other which typically forms a loyalty from day one and will cause an agent/company to put every effort into finding the perfect property for the buyer, knowing that if/when they do, they will get paid. Non-exclusive Buyer’s Representation Agreement – Buyer Agency/Designated Agency: Some investors decide that this is the best agreement to sign because agents/companies may have access to different off-market properties. This may be true for some, however, my opinion is that a buyer will typically get the best service if the agent/company knows they have their client’s loyalty. Should you sign it? In the state of Tennessee, in order for an agent/company to work for you, there must be a written agreement, so, yes, you should sign it. However, the fact that you sign it, doesn’t mean you are stuck if the agent/company does not perform their duties. Either party may terminate the agreement. If you don’t feel you are receiving the best service, speak to the agent/company. If...

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