The Importance of Reading Your Forms

Most PAR legal articles focus on a specific issue and offer up some actionable information for your practice. Today’s legal article is different. There are no detailed FAQs or deep dives into ethical conundrums, and there’s really just one actionable suggestion:  

Read more.  

Specifically, read more forms, and read more educational information about those forms. 

I get it — reading takes a lot of time, and your time is at a premium. Plus, many Realtors® have different learning styles and prefer methods like videos and podcasts over just reading. But you’re in a business where the words on the page matter. The specific words of a contract create a binding legal relationship between the parties, so it’s important to know exactly what those words are to best represent your clients and your brokerage.  

Why bring this up now? The last five years or so of the post-COVID market saw lots of buyers trying to strengthen their offers by waiving and otherwise avoiding contingencies, which means as many as 30% of agents have never seen a market with substantive negotiations over things like the mortgage and inspection contingencies of the Agreement of Sale, or the various sale and settlement contingency forms (did you know we have four of them?). This means newer agents may not have received extensive training on those issues, and experienced agents may have forgotten a lot of what they knew.  

To take a simple example, we’ve had several recent calls that went something like this: 

• Caller: Yesterday, my seller accepted a buyer’s offer that included Form SSP. Today, they got a much better offer and want to terminate right away, but I’m not seeing that in the form.
• Legal Hotline: Correct, because it’s not there. If your seller wanted the right to terminate immediately on getting a new offer, you probably should have countered with a different contingency form. 

If you’re seeing forms you’ve never seen before or haven’t used in a while, the ideal time to research those forms is before taking them to your clients, so you can explain them properly. Ideally, some of that research occurs before you call the legal hotline. Sometimes that reading means you don’t have to call us at all (because the best hotline calls — for you and for us — are the ones you never even need to make), or the calls can be shorter and more focused if there are just a couple of details you need help with.  

To be clear, there’s no criticism here — the hotline attorneys have to do the same exercise. I’ve been here for nearly 25 years, but a few months ago, I had to review all four of the sale and settlement forms for a refresher, since I haven’t talked about them for quite some time. And this is why the hotline attorneys generally pull up copies of whatever form we’re talking to you about, so we can read along and quote specific language instead of just going from memory and possibly misquoting something.  

(Side note: This is why we ask you to leave a somewhat detailed voicemail message. “I have a contract question” gives us no chance to think through your question before the return call. “I have a question about how my buyer can get their deposit returned when there’s a dispute with the seller” will get you a quicker and more detailed answer and/or a copy of an article that explains the answer.) 

So here are a couple of suggestions to consider: 

• Look at your recent transactions and talk to your fellow agents to see what scenarios are cropping up with unfamiliar forms, then find the PAR forms, guidelines and educational articles for a review and discussion. 
• Do a close read of a form you’ve used a million times before (like the Agreement of Sale or seller disclosure), to see if there’s a change you might not have been aware of or a clause you’ve never paid much attention to. (Pro tip: With something long and familiar like that, it can be easier to focus on content if you read the paragraphs in reverse or random order.)  
• If you’re a broker, do both of those things with your agents in sales/training meetings. This lets them crowdsource information, experience and tips for use of certain forms … and helps ensure they all have a similar (and correct) understanding of the forms.  

I’ll say it again – we know your time is at a premium, and this will take some time. But the time it takes to do periodic small refreshers will be far less than the time (and legal fees) it will take to address things like the potential ethics complaints and/or lawsuits from clients who feel you did not represent them appropriately in their transactions.