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newhomeseeker

Does this sound like a scam?

newhomeseeker
16 years ago

Unless I am not understanding this correctly, the listing realtor of a home I want to make an offer on is telling me that I can not bring her an offer drawn up by an attorney. That I HAVE to use her purchase agreement. She sent me this email

"It's our Board of REaltors Purchase Agreement that we have to use on ALL purchases, it was written and approved by the Board of Realtors Attorney and it has a copyright so it can't be duplicated. If you're serious, I'll have to complete the contract for you and explain and have you do the initials and sign where indicated - you'll also have to sign a lead base/mold disclosure/property condtion report as part of this contract"

Does this sound legit at all?

Comments (31)

  • berniek
    16 years ago
    last modified: 9 years ago

    NO! It's not up to the listing agent if the contract is written on a napkin or drawn up by an attorney, it's up to the seller to accept or reject or counter the contract.
    An attorney here (CO.) would probably use the state approved purchase contract and make modifications as directed by the buyer.

  • chisue
    16 years ago
    last modified: 9 years ago

    Yes, the realtor's demands are ridiculous. Consult a real estate attorney before you sign *anything*!

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  • feedingfrenzy
    16 years ago
    last modified: 9 years ago

    Maybe SHE has to use it on all purchases, but you certainly don't.

    Like bernie says, most attorneys would just modify a standard contract to suit the circumstances.

  • User
    16 years ago

    After consulting with an attorney, you will most likely end up using that form, but your attorney will add/delete clauses and modify others. Don't listen to this woman - she's clueless on this one. Remember, she's not a lawyer and buying/selling homes is clearly under contract law.

  • terezosa / terriks
    16 years ago
    last modified: 9 years ago

    She sounds inexperienced. I would contact an attorney AND her broker to let him know that you are not happy with her conduct.

  • newhomeseeker
    Original Author
    16 years ago
    last modified: 9 years ago

    She IS the broker. I don't know how much experience she has but she is retiring at the end of the month. She got mad when I told her I do not want to ask the sellers for an escrow account. That makes no sense to me! Why would I make my offer higher (because I'm asking them to hold some money aside for escrow in case of needed repairs) It's MY money so if I need to make repairs I would just pay less for the house and use the money I saved to make the repairs (if the offer is accepted) I don't care how much the sellers need to pay off their mortgage. That is not what I'm basing my offer on. THey can either accept or decline. I don't know the amount they need to cover their mortgage and I know if they want to accept my offer and its less than they owe they have to consult the bank about a short sale. that is totally up to them.

    On another note, she sent me the purchase contract. It is basically the standard form for my state with a few minor adjustments. I'm having an attorney look over the adjustments they made to it and also to add a few things of my own that I want covered. I will present my own form to the selling agent and if she says she can't accept it or anything else I am just going to walk. Too many red flags.

  • mariend
    16 years ago
    last modified: 9 years ago

    You might also contact the Board of Realtors for your state. Maybe there is something going on they need to know about.

  • sylviatexas1
    16 years ago
    last modified: 9 years ago

    most likely the contract is the one promulgated by the Real Estate Commission, a state regulatory agency.

    Real estate practitioners have to use that contract, unless the seller or buyer has had another one drawn up, such as would be the case with a member of the National Assn of Homebuilders.

    If I were the listing agent, I'd want the state promulgated form rather than a contract drawn by a buyer's attorney, since I am not an attorney & therefore I might not realize the significance of one clause or another that would give the buyer an advantage over my client.

    Realtors are *not* attorneys;
    we are not allowed to offer legal advice, & we are not expert in comparing details of one contract against another.

    Why would your attorney have a problem with a state promulgated form?

  • sue36
    16 years ago
    last modified: 9 years ago

    This is a silly game people play when they don't want to have to review an agreement they don't understand, or they have enough power to force their paper on the other party. Play her silly game. Take their form and have your attorney mark it up to his heart's content.

    I'm an attorney. When we purchased our land the broker gave me the standard form and I sent it back with an addendum of changes. All were accepted.

    Most brokers do not have the experience needed to review a contract written by and attorney and then advise their client on it, resulting in the seller then needing to have an attorney look at it (which they should anyway, but most don't seem to).

  • calliope
    16 years ago
    last modified: 9 years ago

    That sounds like excellent advice. As long as an attorney (if you want to use one) reviews it for you and makes sure you aren't getting in over your head.

    The last property contract I signed, I modified it until my realtor's eyes crossed and worded it EXACTLY how I wanted it to be worded to reflect my intent. I don't think they liked that, but it flew through.

  • feedingfrenzy
    16 years ago
    last modified: 9 years ago

    "If I were the listing agent, I'd want the state promulgated form rather than a contract drawn by a buyer's attorney, since I am not an attorney & therefore I might not realize the significance of one clause or another that would give the buyer an advantage over my client."

    While you might "want" the standard form contract, you can't refuse to present to your clients any legitimate offer you receive from a buyer no matter what written form it's in as long as it appears to include everything it needs to be a complete offer. That is a duty owed by the agent to the seller.

    It would be up to the seller, not you, to decide whether to accept the offer as written or decline or counter. If neither you or you client understands the language of the offer, the client always has the option of hiring an attorney to review and explain it.

    But I can't imagine why any attorney would write a contract to purchase real estate from scratch. Any lawyer would simply modify the standard contract.

  • newhomeseeker
    Original Author
    16 years ago
    last modified: 9 years ago

    Ok, so I advised the selling realtor that I am going to have an attorney make revisions to the blank contract she sent me. I want specific contingencies included such as the offer is contingent on my ability to obtain a loan for 95% financing at less than or equal to (a specific interest rate)
    Also a contingency that I can cancel the contract if the inspector finds anything that would cost over $500 to repair. And also a contingency that if an inspector finds mold in the home that I can void the contract (I am highly allergic to mold and there is no basement or evident water damage so there shouldnt' be any mold anyway. The realtor sent me this email

    "the following clauses are written in under the CONTINGENCY LINE: Most all contracts are written as follows:
    Contingent on Suitable Financing (must get approved for 5% down at a rate less then________ ). The home must appraise for the minimum sales price;* Addendums can be added to a Purchase Agreement - if you're working with one of the attorneys that does Real Estate they can tell you the same thing as this is only Purchase Agreement used by XXXX Board of Realtors.
    * also is a phrase used as a definition for suitable financing as the appraisal has to come in for the sales price or you can't get your loan or you have to come up with more money and 99% of buyers don't want to or can't.
    You can show our contract to any attorney I have no problem with that - the only way we can change or add to it is as I have listed above that's why there are lines under the Price and conditions. Maybe you want the attorney to phrase what you want for contingencies, but sometimes if it gets too complicated it doesn't help you or the seller. Once the contract is signed by both parties the we can't rewrite the orginal contract because a bank or representative says so; this is illegal and falls under the Fed Rico Laws we can add Addendums after it signed, but these have to be signed and agreed on by both parties."

    She is refering to two small blank lines in the contract under the heading "conditions and contingencies" There isn't even enough space on these two lines to type out everything I stipulated. THe realtor is telling me AGAIN that they can NOT accept any other contract than theirs. HElp!!!

  • feedingfrenzy
    16 years ago
    last modified: 9 years ago

    Don't let her bullying behavior get to you. She doesn't represent you in any way and is just trying to force you to do things her way. You are the buyer and you control the situation, not her.

    Do what sue36 said. I'm also an attorney and agree with her completely. Take her form to your lawyer and have the modifications made. Then present the offer to her. She MUST pass it on to her client and she no doubt will. After all, she wants to sell the place and get her commission.

  • berniek
    16 years ago
    last modified: 9 years ago

    "She is refering to two small blank lines in the contract under the heading "conditions and contingencies" There isn't even enough space on these two lines to type out everything I stipulated. THe realtor is telling me AGAIN that they can NOT accept any other contract than theirs. HElp!!!"

    Write in the 2 small lines "see addendum to contract dt. xx/xx attached" and have your attorney ad your contingencies etc.
    It is not that difficult to make this work using the state approved contract.

  • solie
    16 years ago
    last modified: 9 years ago

    I suspect that the realtor is NOT being bullying.

    Newhomeseeker, why are you even having this back and forth with her? Have your attorney discuss it with her.

    I suspect that either your attorney is trying to rip you off by selling you services you don't need (EXTREMELY unlikely). Or you are assuming that your attorney wants to write up a contract from scratch because of a misunderstanding. Why would any attorney want to do that? They would be more likely to inadvertently make a mistake or leave something out than if they just used the standard form. If your attorney is not local or is inexperienced he/she would probably be embarrassed to find out that you are insisting on this. Have your actually told your attorney that there is a recommended contract?

    Let your attorney look over the recommended contract. If it's the standard contract then you should use it. Just make whatever changes you need to. You can always staple on an extra page. What do you have to gain by alienating this realtor?

    Honestly, you are getting way, way worked up over nothing.

  • sylviatexas1
    16 years ago
    last modified: 9 years ago

    "you can't refuse to present to your clients any legitimate offer you receive from a buyer no matter what written form it's in as long as it appears to include everything it needs to be a complete offer. That is a duty owed by the agent to the seller."

    of course.

    but I'd make sure the seller knows that the contract isn't written on the TREC promulgated form & that I am not an attorney & that she'll need to *pay* an attorney to evaluate the way the contract compares to the standard one & that the standard one is available to the buyer & her attorney.

    Again, I can't see a reason for the contract to be an issue to this buyer;
    her attorney doubtless has access to the standard forms & will know how to add exhibits to the "contingencies" paragraph...

    although there probably isn't any need to do so, since the contingencies that concern her are covered in the standard contract;
    if the buyer pays an option fee for the right to terminate, she'll have the opportunity to check for mold & repairs, & the financing contingency is a standard one, addressed in the state-promulgated form.

  • newhomeseeker
    Original Author
    16 years ago
    last modified: 9 years ago

    The problem with this is I've made an offer before (using the form for my state and making modifications and I've never had a problem with that. This realtor is saying that SHE has to fill out the contract and all I can do is read and sign it. That I could pay an attorney to modify the contingencies and word them the way I want but according to her that is just a burden on both the buyer and seller. NOpe, not in my opinion. I want to be protected. The form she wants me to fill is NOT exactly the state form. Modifications have been made to it. For example the financing contingency says "buyer's ability to obtain financing". Nothing about suitable financing or a certain interest rate or %. Financing could mean that a bank is willing to give me a loan at an 10% interest rate or they are willing to give me a loan for 80% of the purchase price. Under the way the realtor's contract is worded, I would have to take that loan as it is a bank offering me financing. I am not paying for an attorney so the sellers and or their realtor can understand the purchase contract I give them. If it is that difficult to look over something that contains some different wording then they can hire their own attorney to interpret it for them.

    My whole problem with this is the SELLING realtor's INSISTANCE that I have to use THEIR form and no other is acceptable and that the realtor HAS to be the one to write everything on said form and all I can do is sign it. That is ridiculous to me. This realtor is not MY realtor. She is not representing me. She is not looking out for MY best interests so why in the world would I trust her to write the purchase offer for me?

  • feedingfrenzy
    16 years ago
    last modified: 9 years ago

    solie and sylvia

    You might want to read the OP's other thread (link below) to better understand the situation and why the OP has gotten so upset with this agent.

    I did misspeak myself when mentioning a commission since the agent is getting a flat fee. I would think she'd want the OP to be represented by either his own agent or an attorney because she ought to know her dual agency creates in inevitable conflict of interest.

    Here is a link that might be useful: want to make an offer

  • mandogirl
    16 years ago
    last modified: 9 years ago

    If she's being that difficult about her being the only one who can fill out the form for you, then it sounds like it might be time to walk away. I know I wouldn't have the time or energy to put up with such nonsense and would be willing to wait for another great house to come along. Unless you can get someone to deal with her for you (buyers' agent, attorney), it sounds like every step of this deal is going to be a battle with her.

    Do you know who the seller is? Any way to contact them on the sly and let them know how difficult their agent, who is supposed to be FACILITATING the sale, is being? I would be angry if I were the seller. Selling today is hard enough without your selling agent alienating your potential buyers.

  • terezosa / terriks
    16 years ago
    last modified: 9 years ago

    Legally she has to present any offers, even if it is written on a napkin.
    The standard forms are proprietary, and can only be used by those who belong to the board or organization that pays for them. An attorney would need to be a member of the organization to have access to and use the forms.
    Naturally the agent would prefer that the contract be written on the standard form that she knows and understands, but it is not required. If she doesn't understand the contract she should advise her clients to retain an attorney to review it.

  • sylviatexas1
    16 years ago
    last modified: 9 years ago

    Thanks for the link, ff.

    It does sound like there's a lot more going on than what contract form to use.

  • brickeyee
    16 years ago
    last modified: 9 years ago

    Have your attorney review the contract and wither mark it up or rewrite it.

    Even 'standard contracts' have problems.

    The Virginia 'standard' says that 'all systems will be in normal operating condition on conveyance'.

    What it should say is that 'all systems will be in the same condition as on the date of contract ratification'.

    I have already had one person try to come back and say a repair had to be made on a defect that was noted in the disclosure and apparent at the inspection.
    A series of outdoor receptacles no longer functioned since the cable was not buried deep enough (only 6 inches for UF cable) and had been damaged by frost heave.
    Luckily the resident attorney (my wife) proceeded to eat them alive.

  • sylviatexas1
    16 years ago
    last modified: 9 years ago

    Here, if the contract includes the right to terminate, the buyer can call for repair or replacement of non-functioning items that were disclosed, & if the seller refuses, the buyer can terminate the contract.

  • may10777
    16 years ago
    last modified: 9 years ago

    This is not to be construed as third party interferrance into a contractual relationship because there can't be a contract without first an offer and in our state which is a "buyer beware" state, that offer has to be accompanied by some earnest money or else it's not legally binding and only then can a meeting of the minds take place (an agreement reached -contract stage)
    This appears to be a communication problem so heres some food for thought.
    Yes, the Realtor is to present all offers to the seller. And she will. But I would not advise anyone to write it on a napkin. Not even a white house napkin can provide a person the protection she is offering. The association paper is there to protect the public *not* do them in. The public includes the buyer, the seller and every one involved... not just the buyer. In other words it covers a lot of already explored territory; they keep up with issues based on cases and outcomes to protect the public. Is it perfect, NO. Because when you think everything that can happen has already happened something new will pop up.
    So, if one wish to write it on a napkin go ahead, but the realtor must advise her seller not to sign off.
    Most of the time the agent holds the pen... But she does not provide the answers. That has to come from buyers and sellers. She fills out the paperwork from questions asked on that form. It covers a lot. Ask for a blank copy and pre-read it, then ask questions on any topic not understood.

    Sometimes buying foreclosures require signing specific paper put together by Real Estate Attorneys in another part of the world. And there are variances in state laws. Where there is a variance in any association or seller required paper work it has to adhere to the law of the state where the transaction occurs.

    A lead base paint disclosure is a good example of buyer protection; It is required by the FEDERAL GOVENMENT (not the local association) on any home built before 1978 and has to be filled out by the seller (they are asked if they have any knowledge of it in that home, when they list) and a publication is given to the buyer to read over and and the buyer must sign to acknowledge they have been informed that there is a possiblitie there could be lead based paint there. If you have concerns about lead base base you can have an inspection. Many FSBO are not aware of this requirement. But ignorance of the law is not excuse for breaking it.

    Association paper varies from Sate to Sate and from even from one County to another. The reason is they have different problems in different areas of the Country. An example may be radon gas. While I've never heard of it here, some places have a lot of problem with it so to protect the public there will most likely be something in that associations paper recommending an inspection for it. If a buyer does not wish to pay for the inspection then the agent may attached an addendum to the contract signed by the buyer that he or she choose not to have one. That might be OK if the buyer has lived in the house all his or her life and trust there is no problem.
    The same applies to home inspections, septic tank inspections, termite and wood infestation inspections. Or, a buyer can buy "as is" waving all inspections. I would never do that. You can always buy "as is" but I do recommend this "For your protection, have a home inspection". Then if it meets your expectations buy "as is". Many sellers are selling "as is" today simply because they don't wish to get caught up in a nick-picking wish list to then have a potential buyer change their mind. The next contract that comes along may have other nick-picking ideas.
    Then another topic was brought up; note key words ready, willing and able. Here are examples of how an agent has brought a buyer which is ready, willing and able to buy to the closing table and at the last minute perhaps the seller can't sign away the house his grandma left him or the title closing attorney cannot close because the seller does not have recorded ingress and egress (a road) to the property. At that point a commission is owed to the agent who brought the buyer whether it was the listing agent, a transaction broker, or a buyers agent. That agent had performed his or her job. The law is that he or she is to be paid. But first there is an offer...then there has to be "a meeting of the minds" if an agreement is reached which produces a contract. I don't think any agent ever made any money where there is not even an offer on the table, so therefore they cannot possibly have a contract to go to a closing table! Sellers have sometimes changed their minds and caused buyers to loose the cost of inspections and other and yes they can sue for specific preformace which forces the other party to perform the action set forth in the contract. On the other hand a seller may wish to sue for specific performance if they gave someone a contract which results in them taking if off the market and loosing other opportunities to sell and the the buyer doesn't execute the contract. I suspect more of the latter may be seen in the near future.

    When an agent lists a house she becomes the sellers voice. She will present all offers but it has to be reduced to writing! The seller is to refer back to her anyone who makes an inquiry. If another realtor goes around that listing agent to the seller he or she is in violation and could lose his or her license. That's a whole new can of worms.

    One last thought and that is if a person retains a lawyer to help with a real property transaction by all means hire one who has a real estate licence. Because they all charge for every call and every letter to and from you and on your behalf. But many of them cannot pass a real estate exam. Just because he did a good job of aunt Sally's divorce does not make him an expert on real property matters!

    If it were me I'd seek my own representation in the form of an ABR (Accredited Buyer's Representative). They represent the buyer not the seller and around here they are usually compensated from the selling side because the listing fee pays many people. The way it it works is the listing fee is divided between two agencies then a portion of that is paid in commission to the realtors who performed the work. I'm not sure how flat fees work but whatever is agreed upon.
    I hope this helps. I need to get back to my gardening.....then worms. Good luck to all.

  • brickeyee
    16 years ago
    last modified: 9 years ago

    "The association paper is there to protect the public *not* do them in. The public includes the buyer, the seller and every one involved... not just the buyer. In other words it covers a lot of already explored territory; they keep up with issues based on cases and outcomes to protect the public. Is it perfect, NO. Because when you think everything that can happen has already happened something new will pop up."

    And of course the RE association contract is copyrighted and ONLY available to those who pay to join.

    And I have yet to see one that is updated on a regular basis.
    They cannot waste all the already printed ones you know.

    Any decent RE attorney (NOT a general lawyer) will have a contract as up to date as the RE association, and usually more up to date.

    Lead notices are not part of the sales contract itself, but required disclosures on separate forms.

    I rarely need to use an attorney for simple RE purchases and sales, but when dealing with banks I always use one.
    They have a nice way of circumventing lots of the crap the banks likes to try.

  • berniek
    16 years ago
    last modified: 9 years ago

    "And of course the RE association contract is copyrighted and ONLY available to those who pay to join."

    Not ours, and they are State contracts, have fun, they are even pdf writable.

    Here is a link that might be useful: Real Estate Commission-Approved Contracts and Forms

  • sylviatexas1
    15 years ago
    last modified: 9 years ago

    I haven't bought printed forms, of any kind, for many years.

    Everything's online, & everything's updated immediately, any time the Commission makes a change.

    The Lead Disclosure, as well as the Seller's Disclosure & many other addenda, is referenced on the contract, with a block next to it for a check mark;
    buyer and or seller just check any addendum that is to be made a part of the contract.

  • feedingfrenzy
    15 years ago
    last modified: 9 years ago

    Most of what is in any standard real estate contract is in the public domain and not subject to copyright protection. This includes almost everything in a Realtor's association standard ontract.

    The only thing a copyright in such a document might protect is the exact layout and wording. And that would only be true if the exact wording and layout is sufficiently original to merit protection.

    If a realtor's association takes the state commision's approved contract and simple adds their impremieur to it and items like the Association's, address and telephone number, and a copyright claim, that wouldn't prevent anyone from legally using the document by simply removing these trivialities from it.

  • brickeyee
    15 years ago
    last modified: 9 years ago

    Many states have no 'state approved' form.
    The forms are drawn up and owned by the private Realtor associations for use by the members.

    I would view it as a waste of state money to have even formulated such a contract.

  • mary_md7
    15 years ago
    last modified: 9 years ago

    When I bought my first home, I called my parents' real estate attorney. He advised me to go ahead and let the agent use the standard form for our area (with which he is intimately familiar) but add a contingency of 2 business days for attorney review. He reviewed it and marked up a few clauses; the agent and buyer were fine with his changes.

  • feedingfrenzy
    15 years ago
    last modified: 9 years ago

    "The forms are drawn up and owned by the private Realtor associations for use by the members. "

    True, but only to the extent that what's in them is original and not in the public domain. The truth is that most standard form contracts contain very little, if any, original language. The only thing original about a private RA contract is its formatting, layout and imprimatur so that's the extent of what's protected by the copyright.