The fast-paced society in which we now live, with information and communication accessible at our fingertips from the moment we wake up until the moment we go to sleep, requires a tremendous level of responsiveness. In this hurried environment, it is easy for certain things to slip through the cracks. The purchase, sale, and leasing of residential real estate is no exception.
A perfect example is when an unresolved issue requires the buyer and/or seller to delay the settlement date. This delay could be for any number of reasons, including financing, the appraisal, issues discovered during an inspection that require time to remedy, or resolving certain title issues. Regardless of the reason, it is important to remember to “get it in writing,” even if every party is in agreement.
In a transaction in which licensed real estate professionals are not involved, failing to get any agreement in writing can quickly devolve into a situation of “he said, she said.” For example, a deal is to settle on a Friday. On the Monday before, the buyer calls the seller to explain that the buyer would like an additional two (2) weeks to find alternative financing options. The seller does not oppose this, but does not agree outright. Neither party executes a written extension of settlement. If the seller shows up for settlement on Friday and the buyer does not, has the buyer defaulted under the terms of the agreement? Is the seller entitled to the remedies outlined in the agreement upon the buyer’s default? How can the buyer prove not just that the seller knew settlement was to be delayed, but more importantly, that the seller agreed to the delay? The simple solution: get it in writing.
For transactions involving licensed real estate professionals, not only could the deal fall apart if the parties do not have a written agreement, but it could also result in an ethics violation. Article 9 of the Code of Ethics and Standards of Practice of the National Association of Realtors® requires that whenever possible, “all agreements related to real estate transactions . . . are in writing in clear and understandable language expressing the specific terms, conditions, obligations, and commitments of the parties.” Additionally, “[a] copy of each agreement shall be furnished to each party to such agreements upon their signing or initialing.”
With the heightened demand for responsiveness, it is imperative to take a moment, slow down, and document your agreements in writing.
Want to know more? Contact our Real Estate Group.