Premium Legal Services without the Boston premium
Seek Counsel Before Signing Documents With Real Estate BrokerReal Estate
Posted in on March 14, 2014
Did you know that you may sign documents presented to you by a real estate broker that could bind you to either unfavorable terms or to purchase or sell a residential home before you even sign a purchase and sale agreement?
Real estate brokers generally encourage prospective sellers and buyers to sign two standard form agreements. These agreements are: (i) Exclusive Listing Agreement, almost universally signed by only the seller; and (ii) Offer to Purchase.
Although standard forms are useful setting forth the general parameters of a transaction, without the deletion of certain provisions and the insertion of desired contingencies, the parties may find themselves bound to a deal that they did not contemplate.
Unwanted results of unedited standard forms can include:
- The broker being entitled to a portion of the deposit money that is retained by the seller as liquidated damages is closing does not occur;
- The broker being entitled to a commission if broker presents an able, willing and ready buyer to the seller;
- Buyer being convinced to put down an unreasonably large deposit amount;
- Inability to negotiate desired terms in the purchase and sale agreement because they were not included in the offer.
You need to seek the advice of counsel prior to signing away preliminary documents for selling or buying a home. The revisions needed to protect your interests are minor and could save you money and prevent unintended consequences.