- A real estate transaction involves lots of paperwork.
- The contract provides some level of protection to both parties.
- It does not eliminate the possibility of problems.
A daunting document for agents and consumers alike, The Pennsylvania Association of Realtors’ agreement of sale has only grown in length over the years.
I wish I had more confidence that consumers fully understood what they were signing when they put pen to paper. Disagreements arising from real estate sales often involve assertions that the contract was not thoroughly explained. People should refuse to sign anything that is not crystal clear to them.
Consumers often complain that the paperwork has become too complicated. The documents we use are constantly reviewed at the state and local levels and most alterations reflect changing laws.
In Pennsylvania, we use a “fill in the blank form” approved at the state level. In addition, our Code of Ethics warns against “practicing law” so we are limited in what we can add to the standard form. The essence of the agreement is that it records the details agreed upon by the parties.
By making an offer, negotiating it and accepting a final version, both parties agree to perform certain tasks necessary to protect themselves as well as to satisfy the needs of the other.
Ironically, many of my older clients have commented that the current contract is less binding than a good old-fashioned handshake “back in the day.” Does a signed document really bind both parties?
Legally, I presume a properly executed and delivered contract is enforceable if a party wants to enforce it. But doing so, however proper it may seem, costs both dollars and time.
While I expect my client and the other principal to take the executed contract seriously, I have come to realize that all agreements, no matter how lengthy, detailed, or seemingly binding, are based on one simple word. That word describes what used to make a simple handshake so valuable: trust.
Once I return an executed contract to a real estate agent, I expect that agent, his or her client, and my client to live up to the responsibilities set forth within the agreement.
Anything that prompts a modification to the agreement should be properly reported and addressed in a timely manner.
Trust is expected. It can be reinforced or lost over the course of a single transaction. This unspoken promise carries forward as agents and consumers work together again and again.
Once lost, the path gets more difficult.