Is it your fault when they don’t read the fine print?

by Paul Cowhig, Advisor, Professional Standards

Many years ago when cellphones weren’t quite as universal as they are today, I was paying hundreds of dollars a month in cellphone bills to maintain my real estate business. I thought I was lucky when the service provider offered to charge me by the ‘second’ instead of by the ‘minute’ for my business calls.

So when the company offered me a contract for what I understood would be a smaller monthly bill, I was grateful. Until I read the fine print.

Turns out the new contract that I so readily accepted took me back to paying by the ‘minute’ for my calls instead of by the ‘second’. Ultimately the bills were actually higher than before! I was so choked. And to be honest, I am still telling the story today. Why? Because the company took advantage of my naivete. It hurt both my pocketbook and my trust in that company.

I’ve had too many calls from real estate consumers who call me up now to say they’ve signed documents they would have never signed had they really understood what they were agreeing to.

The fine print

When these people call me I always ask them, “Did you not read it before you signed it?” They are almost always a bit sheepish when they admit that, no they didn’t read it all and yes, they did sign it, but then they say, “But the agent didn’t really explain it to me.”

Now I am the first one to say that there are consumers who will say anything to get out of a contract they regret signing. I get that. I have very little sympathy for anyone who is trying to cheat you or go back on a commitment they knowingly made with you to buy or sell real estate.

What I’m talking about here are the ones who don’t really know how the process works and become overwhelmed and confused by all the paperwork and forms involved.  Those seem to be situations that may tempt some REALTORS® to say, “This is just all the stuff you need to sign to get me working for you. Don’t worry about it. I’ll look after you” and not fully explaining what documents they are signing and exactly what commitments they–and you- are making, and for how long.

Then the client goes home and realizes they have signed a 6 month Exclusive Buyer Agency Contract when all they wanted was information about some properties they were thinking about buying—or some version of that.

Crystal clear contracts

The purpose of contracts is to be absolutely sure the signing parties are crystal clear about what they are agreeing to and not agreeing to.

The REALTOR® Code and CREA’s Standards of Business Practice that all REALTORS® signed a pledge to uphold demands “Absolute honesty and integrity in business dealings”. Even allowing a consumer to sign a contract, without fully understanding what it is they are signing, is a failure of professionalism.

In CREA’s REALTOR® Code, Article 6: Written Transaction Agreements it says:

 REALTORS® shall ensure that agreements regarding real estate transactions are in writing in clear and understandable language, expressing the specific terms, conditions, obligations and commitments of the parties to the agreement. A copy of each final agreement shall be furnished to each party upon their signing or initialing and shall be dealt with in accordance with the instructions of the parties involved.

Can it be any clearer? As Realtors our job is to protect clients, not entrap them. And in my experience, they always remember the bad experience no matter how long ago it took place.