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A FEW TIPS & TIDBITS

It’s not unusual for an agreement of sale to go under multiple modifications before settlement.  Perhaps an inspection results in a financial concession followed by an another price modification after discovery of additional problems.  Putting the modifications in writing is required; clarity is also essential.  In the second Change in Terms you might state something like “Seller credits Buyer with $3,000 at settlement.”  Does that $3,000 represent the total financial concession or is that $3,000 concession on top of (in addition to) the previous $2,000 concession (also placed in writing)?  Why not be perfectly clear by saying “in addition to the $2,000 concession which was the subject of a Change in Terms Addendum dated March 30, 2021, Seller further agrees to a $3,000 concession bringing the total purchase price to $_____.”  It’s wordy but it’s perfectly clear and will not be the subject of a dispute or litigation.

Completely unrelated are issues arising from the sale of property by a trustee, corporation or some other entity.  Searching the quality of title held by individuals is relatively easy.  When property is owned by entities other than human beings, it becomes more complicated.  By what document was the trust established?  Do the corporate documents allow for the sale of real estate and, if so, by whom?  Title agents know the questions to ask and the documents that must be provided by Seller before settlement.  I am sure that most of you listing agents have relationships with title companies and can place a call at the time you obtain the listing to ask what documents and information you will need to present to the Buyer’s Title Agency.  Do this at the time of listing so that settlement is not delayed by last minute scramble to obtain what is necessary.  Further, you would much rather know about a title issue a month or so out than days away from settlement.

Lastly, I offer advice relating to this remarkable seller’s market.  I presume buyer agents are tired of writing 4, 5 or 6 offers for a single buyer, only to find all of them rejected.  You listing agents must also be tired of opening the doors for a parade of buyers, many of whom aren’t in a position to seriously compete.  Why not try a little old fashioned communication!  Listing agents, before your client takes a deal on the table, might you want to hear from a buyer agent who is drafting an offer with a stand-out purchase price and multiple attractive incentives?  And buyer agents, do you really want to write an offer when your buyer is not competitive?  Not every representation about other coming offers pans out as true, and not because a licensee doesn’t tell the truth.  An offer that was promised to be forthcoming may not be so and that may be attributed to any number of factors.  The bottom line is that taking the time to communicate provides material facts that can winnow out the very best deal quickly.  Talk to each other!

Copyright © James L. Goldsmith, Esquire, 2021

All Rights Reserved

 Mr. Goldsmith is an attorney with Mette, Evans & Woodside and serves as outside legal counsel to PAR.   A substantial portion of his practice is dedicated to providing advice and counsel to real estate licensees.  He and his firm represent and defend real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth.  Jim also defends Realtors® in disciplinary hearings conducted by the Real Estate Commission.  Jim was one of the voices of the PAR Legal Hotline for the first 27 years following its inception in 1992.