Wednesday, May 25, 2011

What Does An Offer to Purchase and Sale of Real Estate Mean in Simple English? Part 3

(Part 3)

Clause #10

is for you, the Buyer.  What it means is that about three or four days before closing, your lawyer or notary will call you and tell you right to the penny of the amount of money that you need bring in to close the deal. So it will be your entire purchase price, plus all your legal fees, and adjustments and taxes and things that we’ll discuss later minus your mortgage and down payment. You will have to bring that in as a certified cheque, bank draft, or lawyer/notary trust cheque. You cannot just bring in a regular cheque.

Clause #11
This clause is basically for the lawyers. It states that the lawyers will prepare the documents in a form that can be registered at land titles.

Clause #12
alks about time being of the essence. Basically, Mr. and Mrs. Buyer, this clause pertains to you. You must make your best effort to remove your conditions. In other words, the Seller is going to take their house off the market to give you time to do your due diligence, make sure you get your inspection done and you are happy with it. You also need to ensure you get your financing and you are happy with it. By signing this document in clause # 12, it means that you are going to do everything you can to remove all conditions as quickly as possible.

Clause #13
describes a situation where you have to trust your lawyer to take your money before you have registration of your new house. The Sellers have to trust their lawyer to give up registration before they receive their money. Basically, at some point somebody has to trust somebody, and it comes down to the lawyers acting under a trust arrangement in this situation. 

Clause #14
has already been covered.

Clause #15
is for you.  Clause #15 states that the costs of putting together the mortgage and conveyance of the title are your responsibility.

Clause #16 talks about risk. Simply put, if anything happens to the house or any of the included items like appliances or the furnace or the water heater up until 12:01 am on the Completion Date, it is the responsibility of the Seller. If anything happens anytime after that, it is your responsibility. 

So, if the house burns down or the water heater packs it in, or something happens to the washer and/or dryer, if it’s included in the contract, it is the Sellers responsibility up until 12:01 am on the Completion Date. It is your responsibility after that! Caveat Emptor (buyer beware). This is probably the most important clause in the contract from a liability point of view.

Clause #17 Basically what Clause # 17 says is that anyone who signs the bottom of this document is responsible for whatever is written above it.  If they pass away, their heirs become responsible for this contract.

Clause #18 basically underlines that the only details that both the Buyer and Seller can be held to is in this contract. We have to do our own due diligence to make sure that everything is verified. Here is an example-if the listing sheet says that there is a water softening system in the home and it isn’t there on Possession Date, you cannot sue the seller to buy you a water softener because it is not outlined in the Purchase Contract.

Clause #19 is about agency disclosure. There are three types real estate relationships. 
Single agency means that both the Buyer and Seller have separate Realtors from different companies. When there is a Realtor for the Buyer and a Realtor for the Seller, Mr. and Mrs. Buyer, my responsibility is obvious. My job is to get that house for you at the best possible value possible. It is the other Realtor’s job to look after the sellers.
Dual agency happens two ways. One situation is when both Realtors work for the same company and the other situation is when there is only one Realtor working for both the Buyer and Seller. 

In the last situation, the law says that I have to be fair to each person. In other words, if the sellers tell me that they will go to a certain price, I cannot tell you that and vice versa. I actually cannot disclose about price or personal characteristics or motivation. (Remember, you will already have reviewed and signed a limited dual agency agreement and the Working with a Realtor document, paying special attention to the dual agency portion.)

In this situation, there is only one Realtor representing the Buyer and the Seller. There is an obvious conflict of interest. What the law and both of these documents state is that, as a Realtor, I have to back off when it comes to three different pieces of information. They are price, personal characteristics and motivation. In other words, if you tell me that you’re going to make an offer of $440,000 on a $450,000 house but then you tell me that, if you have, to you will go to list price, I can’t tell the Seller that. If they tell me that they want you to come up to $445,000 but if they have to, they will accept your offer of $440,000, I can’t tell you that. I have to be fair to both parties. (“Are you O.K. with that?” I asked that question. You said, “Yes”  (most people do).  You had already signed the Limited Dual Agency Agreement, and Working with a Realtor before we even wrote the offer, of course.  I am sure you understood what dual agency meant when we reviewed it together.  This is a topic I would ensure you did understood.

Century 21 Assurance Realty (Kelowna)
Cell: (250) 859-5990
Office: (250) 869-0101
Fax: (250) 869-0105
Visit my WEBSITE
Follow me on TWITTER
Follow/LIKE me on FACEBOOK

Follow my BLOG

PS. Your referrals to friends and family are always greatly appreciated and rewarded.

No comments: