Real Estate Purchase Agreement & Contract: Legal Document for buying and selling real estate.

A Contract of Purchase and Sale is not a contract if…

by Paul Cowhig, Advisor, Professional Standards

Prepared correctly a Contract of Purchase and Sale (CPS) is a powerful tool, but prepared incorrectly, it may be worthless — or worse, create expectations that never materialize.

For a contract to be enforceable specific items must be included. A blank CPS is just that, a blank contract–until you fill in the required information.

What ‘makes a contract’?

I’m not a lawyer, therefore legal advice from a lawyer is recommended for further clarification.  However, I want to address what I believe may void a contract if the correct wording is not included on your CPS.

Names of the parties

I’m not even saying the ‘Full Names’, I’m just saying ‘names’ but, technically it should be exactly what’s on the title search for the sellers, and use what’s on your buyers’ government issued identification.

Buyer and seller agents both, please pay attention

More often these days the Board is receiving listings that contain a Privacy Protection status, as well, some have an additional request that the seller’s name(s) be suppressed in Paragon (so there is no display of the seller’s name in the MLS® listing at all).

In some cases, even the title search provided under the document tab has the names redacted. This makes it very difficult for the buyer’s agent to properly execute an enforceable CPS.

Buyer agents: you need to obtain the sellers name and put it on the CPS. Without their name, you run the risk of making your contract unenforceable.

It may not be quite that simple to void a contract, but you are definitely at risk of it.

I am seeing contracts that have been sent with no information at all in the ‘SELLER’ section on page one; just a blank. I am also seeing where WEBForms® has auto populated the seller information with “Privacy Protected Call LR”.

I don’t think that’s a contract. You are relying on the listing agent to fill that part in after the fact, and frankly that’s not their job. Adding content to the CPS after the buyer has signed it, is a change to the contract and would require acknowledgement from the buyer.

If the names are not on the MLS® listing, check the title search posted on Paragon. If the names are redacted, do your own title search, or just call the listing agent and ask for the name.

Do what you need to do to write an enforceable CPS.

Listing agents: Don’t make it so hard

I get the whole privacy thing but let’s get real. If your client wants to sell their property, the buyer’s agent needs the names to write a proper CPS and that’s in the best interest of all parties. Don’t make it harder than it needs to be.

Buyers names too.

I recently went to a conveyancing lawyers office and asked the conveyancers what sort of things REALTORS® could do to make their jobs easier. What they said was,

“Please, if they could just be sure to include the full names and contact information for the parties to the contract.”

That was their number one complaint!

‘ Just having your license doesn’t make you a professional, it takes experience and education. Never stop learning and getting better.

A REALTORS® job is becoming more complex where details really matter. I was licensed in 1980 and I wrote contracts that were only one page, where typical wording would have been like this:

 “All cash for title free of all financial encumbrances. Subject to the buyer receiving satisfactory financing.”

That was it. There was no buyer agency at that time, no thought of having an inspection done, no Property Condition Disclosure, no checking the file at City Hall, nothing like that.

But that’s the whole point of this column. Today, clients expect a lot from REALTORS®, and so they should. Professionalism is key to both sides of the transaction. We tell our clients over and over again that they need a REALTOR®. The least we can do is write an enforceable contract.

If you’re feeling you may need help in writing a proper contract, talk to your broker about making that the next course you take. There are some great PDP courses available to you. Take advantage of the educational resources that you have at your fingertips. It’s your job to know these things.

Just having your license doesn’t make you a professional, it takes experience and education. Never stop learning and getting better. That’s how you become a professional in the first place, and constantly learning is how you stay a professional over the years.

Source: FVREB Professional Standards & Communications