Read the Contract...Licensed Agent: Why you need an Exclusive Buyer's Agent
Read the contract...licensed agent; Why you Need an Exclusive Buyer's Agent
There are several contracts to sign when buying a Tampa, Florida home.
Purchase contract; closing statement; terms; addendums; and more addendums.
Nothing too difficult to figure out.
So why is it that many agents that are involved in a Real Estate Transaction just don’t bother to read or understand what the contract really says…they should know it. Absolutely!
Problems occur when there is Lack of Training and Understanding
When the Listing/Seller's agent does not know what the purchase contract says or means.
There is no excuse for anyone with a Real Estate License not to know what the basic FAR-BAR residential contract states. “Far-Bar” stands for the Florida Bar contract, written by Florida attorneys.
These contracts are revised only every few years, so it is not difficult to keep up with the changes when they do come up.
There are Realtor contract classes that they can go to learn, and there are also online classes that they can visit at their leisure. Most of these classes are free, so all agents just need to do it!
The biggest problem comes when a buyer offer is submitted and the listing agent either mis-reads the terms, or does not understand the legal requests. Therefore, they just choose to do “what they think” rather than referring to what the contract actually states.
Problem is, the listing agent might give the seller bad information....or simply put their own negative spin on the buyer's offer. Although the Realtor code of ethics says that all listing agents must submit all offers quickly and objectively, that is not the norm. Many listing/sellers agents start out by putting their own personal feelings into the negotiations.
Purchase contracts are not a personal negotiation...a purchase contract is strictly business. It is a legal agreement between the buyer and seller, only.
While agents not understanding the terms of contract can be the norm, it is not always a problem until there is a request from one party to another party to perform under the terms of the contract. Then the dispute begins. Mis-information leads to conflict...this is a difficult time to try to educate a broker that does not know what the contract says...ugh, I hate it!
Recently, I had a listing/sellers agent insist that we MUST use their title company. When I pointed out that the bank contract says just the opposite, they responded with “ err, ahhh, hmmm…, but that is not what we do…”
The bottom line is that it does not matter what anyone WANTS to do, or FEELS like doing…the contract controls.
Both the buyer and seller must follow the same contract...so both the seller's agent and the buyer's agent need to be knowledgeable and understand the contractual terms that both parties agreed to.
Agents also need to stop acting like it is up to them to control any decisions. Contrary to what some may think, the agent is not “party to the contract” so brokers need to butt out of buyer/seller decisions.
"Exclusive Buyers Agent is a Firewall Against other Agent Mistakes"
Terms of the Contract is a Road Map for Both Sellers and Buyers
Every contract contains the “instructions” about what is expected in the purchase agreement. Everything in the contract is negotiable between the buyer and seller. Here are some typical terms to negotiate:
- Purchase price
- Date of signing the contract
- Date of closing
- Place of closing
- Escrow deposit amount
- Inspection due date
- Who pays for repairs
- Financing deadline
- Proof of loan approval
- Who pays for title insurance
- Closing costs
- Pool equipment
- Misc. furnishings
What is negotiable in a home purchase contract?
Everything is negotiable, before the contract is signed by both parties. After a mutually accepted and signed contract, buyers and sellers both have to agree (and sign) any changes in order to make the changes valid and enforceable. Buyers and sellers can agree to any terms they want...there is nothing off limits, as long as it is agreed to and signed by both parties. ( Buyer and seller)
Is Florida a “statute of frauds” state?
Yep...sure is. Statute of frauds means that a contract must be in writing in order to be enforceable. Verbal agreements mean pretty much nothing. This is required in order to eliminate fraud in real estate transactions. If it is not written and signed, it does not exist as a term of the contract. This eliminates the famous “he said-she said” disputes.
Who has control in a Florida Real Estate Contract?
I believe the buyer has the upper hand and here are my top reasons:
- The buyer is the one who is making the offer, so they are the one to submit the price and terms that best suit them.
- The buyer is the only one who gets to choose to cancel the contract. (unless of course, they breach the contract)
So let me expand on this…a seller's real estate agent should read the contract and know exactly what it contains so they become aware that not much in the contract is a seller's option.
The seller is at the mercy of what the buyer thinks the property is worth or who is paying the closing costs, or who is required to fix the deficiencies.
The seller is not calling the shots. (except for the price) The seller can either accept, reject or counter the buyer's offer.
If the seller is unreasonable, the buyer simply moves on to buy another property...and the seller’s next offer may not be as good as this one.
- Contrary to popular belief, the seller does not get to kick the buyer out of the contract. The contingencies in the contract (inspections, appraisal, financing etc.) are for the benefit of the buyer and not the seller. This is not a seller's choice...
- If the inspections reveal too many deficiencies, the buyer can ask the seller to fix it, or lower the price, receive a closing cost credit or cancel the contract and get a refund of their escrow deposit. The only choice the seller has is to try to work a deal with the buyer, or start over with a different. (Don’t forget the property deficiencies will still be there for the next buyer and will need to be disclosed).
- If the property appraisal is short, the buyer can ask for a price reduction, put more money down or go buy something else. Again, the seller's only choice is to try to work a deal with the buyer. The next buyer's appraisal may be even lower.
- When issues come up, many listing agents love to pressure the buyer to agree to things that are not acceptable by saying…”well, the seller will just cancel the contract”. Really? Not so…please read the contract.
So, how can a buyer get the best deal?
Hire an Exclusive Buyers Agent (EBA) from a Buyer Brokerage Office.
That alone will determine your home buying satisfaction. EBA’s only represent homebuyers and never sellers. They do read and understand the contracts and will help you become an informed consumer while at the same time they will be 100% on your side.
Most Florida brokers work as Transaction Brokers which is only a middle person with no loyalty or fiduciary duty. Forget what a Transaction Broker claims or tells you. Instead, read the legal definition of what they cannot do for you...no loyalty, no full confidentiality and no full disclosure... that’s the law. Don’t be bamboozled!
Florida is a state with no mandatory agency disclosures...which means brokers do not have to tell you that they work for the seller and not you. That means their job is to sell the property for more money. How unfair is that? That is only a benefit to the broker who will get double commission.
Yes, it's very misleading, because most home buyers assume that the agent that is acting like their best friend is working for them...not true. This is why every Florida homebuyer needs their own true advocate...an EBA.
Informed homebuyers when given a choice will choose an Exclusive Buyer Broker that works in a Buyer Brokerage office. An office that never represents sellers, which eliminates the conflict of interest.
Call Buyers Broker of Florida for a no obligation, no pressure, complimentary phone chat about your best buying options 727-202-9130. You will be glad you did!