I am entering into a contract to sell my house. I have heard that it doesn’t make any difference what is set out in the contact, because my attorney can change it all. Is this true?
First of all we need to establish at what point you are concerning the sale of your property. It sounds like you are talking about a purchase offer not a listing agreement. These are two different items. A Listing Agreement, is a contract entered into between the Owner of a piece of property and a Licensed Real Estate Broker. This contract sets out the terms under which the Broker will market and sell the property. It will include some of the following:
– asking price for the property
– condition of the property
– how long the listing agreement is for ( 3 months, 6 months)
– compensation to the listing/selling Broker/Agent
– special conditions that would effect the sale, such as “must be sold ‘as is'”
The Listing Agreement establishes the relationship with the Broker and is generally not reviewed by the parties’ attorneys. The Broker will usually use a standard form provided to the Broker by their local Board of Realtors, so it has been approved, if you will, by the Broker’s Attorney. The Owner certainly has a right to have their attorney review this contact, but that is rarely done.
The second item is the actual Purchase Offer on the property. This is the contract that is entered into between the Buyer and Seller of the property. The contact is presented by the Broker or Broker’s Real Estate Agent to the Seller and the Seller’s Agent or Broker. It contains the terms under which the potential Buyer is willing to purchase the property. As an Attorney I have heard from several clients that they have been told that “you can have your attorney change everything.” This is a dangerous undertaking.
First of all Attorneys rarely address the actual “selling price” of the property. That is not our expertise, and that is why you are paying 6% to 7% commission to a Real Estate Broker, price is their expertise. Let them do their job, and listen to them. Secondly, and far more importantly, if your attorney changes even one item on the purchase offer, the entire offer is now open for review. Your attorney has basically set out a “counter-offer” to what has already been agreed upon. This “counter-offer” must now be presented to both sides, and both sides must agree to the change. If both sides do not agree, you have no contact.
You can see why attorneys are therefore hesitant to make any changes to a contract, unless they view the oversight substantial. I have modified offers, such as when a Rochester realtor brings me a contract for Buyers of Wayne County property that “forgets” to set out that a septic and/or well test will need to be run. (Rochester doesn’t have a lot of septic systems you see, so they don’t always think the way we do out here). We will also address the contact if its terms are ambiguous, such as “includes all appliances” – now what does that mean, do we throw in the toaster and blender with the stove and refrigerator?!
Under certain circumstances an Attorney can simply dis-approve a contract. Then there is no counter-offer, the contact is simply dead, and the deal is done. The Attorney will only do this after communicating with the clients, and finding out that they will have a substantial problem with the buy or sale. The reasons are not set forth in the disapproval, the contact is just killed.
If a Buyer or Seller has questions about terms in the contact, talk to their attorney before they sign the contact. Most Attorney’s are more than willing to take a client’s phone call, or meet with them in advance to go over the terms of the contact, or explain what the terms mean. Your house will probably be the largest investment you will ever make in your life. Take time with it, and if you have questions ask your Broker, Agent or Attorney. No one wishes to make the home buying and selling experience anything less than the pleasant experience it should be.
As always this is a general answer, to a general question. You should always consult your attorney about the specific issues that surround your specific needs.
If you have a question for Attorney Kukuvka, please forward it to: Cynthia M. Kukuvka, Attorney at Law, 330 E. Main St, Palmyra, NY 14522 or cklaw@verizon.net.