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From the Department of Redundancy Department…

by Goldsmith, James on

You tell me these are unprecedented times.

Folks are buying homes without ever having set foot in them. You tell me you’re fearful that when buyers’ remorse sets in, you will become the targets of their ire. We need more forms, you say.

Truth be told I have written “sight-unseen” disclosures and the like for private clients, though I believe we have all the forms we need in the PAR library. Let’s begin with paragraph 25 of the Agreement of Sale. Entitled Representations, it says what is essential to protecting licensees involved in a transaction. It provides, in boldface, that the property is sold in its present condition and that the buyer has inspected the property or waived the right to do so. It goes on to say that the licensees have not made an independent examination or determination of the condition of the property and its components. What more need be said?

I realize that by the time you get to paragraph 25, your buyers may be less focused than at the start. Take time to emphasize the section I’ve referenced in the preceding paragraph of this article (subsection B of paragraph 25), but also that part (subsection A) that says that oral representations and those found in other documents (seller disclosure forms, descriptive brochures, multi-list descriptions and the like) are not part of the agreement and not enforceable unless place in writing in the agreement. If inclined, have the buyer place her initials or signature by this paragraph to signify their review and understanding.

And yes, repetition can help. That’s one of the best reasons to use the PAR Consumer’s Guide to the Agreement of Sale, which walks your buyers and sellers through another way of explaining the terms in the agreement…with a handy-dandy acknowledgment form to be signed by the client. Another existing option is HUD’s “For Your Protection:  Get a Home Inspection.”  While required for use in conjunction with FHA loans, it underscores the importance of being an informed buyer, having inspections and can potentially be used (with appropriate explanation) in any transaction. But if still you feel your buyers are totally not paying attention and/or seem likely to blame you when things go awry, you can always consider using additional forms (preferably drafted by brokerage counsel!) that more specifically remind the client about certain things you’ve already discussed with them – like the fact that waiving inspections is dangerous and that the seller disclosure form and MLS descriptions are not warranties of property condition, and the like.

I end with kudos to the PAR Standard Forms Committee and those who have served on it for the 40 years of my involvement. Thanks for forms that withstand market changes and thanks for your steadfast diligence in providing the tweaks that keep them relevant.

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