Wednesday, April 21, 2021

In the frenzied market facing REALTORS®, buyers, and sellers, occasionally we may accidently overlook something. Sellers’ agents, with an armful of offers to review with their sellers, may especially be at risk.

A while back, a member phoned wanting to make a complaint about another member “for slipping one by,” meaning adding a clause to the buyer’s third counteroffer to the seller, and “burying” said clause in a place where it wasn’t noticed when the seller’s agent presented the counteroffer to the sellers.

The sellers missed it too. Having signed a few documents in my time using form-signing software, I have to say, it’s pretty darned easy to miss something when the urge to click a box strikes you.

At a recent meeting of the BCREA’s Standard Forms Committee, we had a parallel conversation about creating a form for buyers’ agents to confirm they’d advised their buyers to make their offers subject to financing (or whatever), when the buyer hadn’t agreed. We created a truly lovely form that will be unleashed on all of you in May 2021, maybe just in time for the hot market’s cooldown.

"I probably didn’t endear myself to my colleagues at this meeting when I suggested that having a form was a classic response by our industry when faced with an issue; namely, “give me a clause to deal with that” or, “we need a form” to deal with the situation."

I voted in support of the form, but I did so with some sadness. Why? Because I felt as if we were again banging our head against the wall. Forms and clauses are fine and, I suppose, better than nothing. But if you haven’t explained them or the client says, “they buried that damned form in a bunch of other forms, and I didn’t realize what I was signing,” it becomes a mess. Now you have a form saying the buyer understands they didn’t want to make their offer subject to financing or inspection because there will probably 42 other non-subject offers, so if everyone else is doing it, why not your client?

It’s fine until it’s not, I suppose. Use this form and add as many “as-is/where-is” clauses you like. We’re agents, and the courts, Council, and our boards expect we’ll do our utmost every time to explain each and every form and its clauses to those with whom we deal so they can give informed consent.

Back to the member who phoned me. I felt really sorry for them. I have no doubt that, at 2 a.m., the member may have been bleary-eyed and not on top of their game. But that didn’t lessen their responsibility. Now, it would’ve been nice of the buyer’s agent to have pointed out there was a new clause added in a covering email to the seller’s agent. But, being nice isn’t the same as being an ethical requirement.

Folks, read the contract. All the way through. Every time. Then ask your clients to agree to it (or not agree if that is your advice). Then, using basic risk management, document your conversation in your file. If there’s a form, by all means, use it.