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How Well Do You Know Your Contract

 Contract

 

For new and seasoned agents, there is something to learn with each transaction. Going over the contract with your client line for line each time you write, will teach you the ins and outs of the legal document quicker than anything. You will be continually answering their questions, and most of the time, those answers can be found right on the printed page. 

 

When receiving a contract for a seller or writing one for a buyer, I like to go through the entire offer line by line. I ask them to take the time to review the forty to fifty pages and make a list of questions.  In our Maryland contract, the first ten pages, alone,  have sixty bold paragraphs. 

After review, we go through each page line by line. Sometimes it is quick, and sometimes it can take an hour or two, depending on the client's knowledge and in-depth questions. Make sure the person signing knows what they are putting their binding signature on. When a problem arises, we refer back to the contract.

How well do you know your contract?

 

Margaret Rome

 

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Comment balloon 40 commentsMargaret Rome Baltimore 410-530-2400 • January 10 2020 01:13AM

Comments

Margaret- this is excellent advice for not just new agents but seasoned ones as well. By doing what you suggest, you are educating your clients so they know what they are signing and you're reeducating yourself!  

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) 2 months ago

Margarete great question and in our litigious state of California you better know your contract or you will pay the consequences, Endre

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) 2 months ago

Morning Margaret.

I go over each section, explaining it as we go.  I know the paperwork very well.

Posted by James Dray, Exceptional Agents, Outstanding Results (Fathom Realty) 2 months ago

Good morning, Margaret Rome, Baltimore Maryland I know the contracts very well, but when there was a legal issue, their attorney was contacted.... that kept me out of court for 42 years.... 

Posted by Barbara Todaro, Marketing Agent for The Todaro Team (RE/MAX Executive Realty ) 2 months ago

Good morning Margaret. When active in Florida as a managing broker, worked in an area with 3 contracts in use. I taught contracts for the company so I knew the contracts by the line! Enjoy your day!

Posted by Wayne Martin, Real Estate Broker - Retired (Wayne M Martin) 2 months ago

In our age of electronic signatures, it is so easy to send a contract over with a quick summary.  I much prefer to sit down and go through the contract line by line.  I try to do it before we even write any offers so the clients know the process early.  

Posted by Raymond Henson, SRES, GRI, Realtor (eXp Realty of California, Inc. (lic. #01878277)) 2 months ago

Hello Margaret - knowing and understanding your state real estate agreement and related information is key.  It's not something that occurs once and it's done but it's an ongoing learning process.  Even for seasoned industry professionals.  

Posted by Michael Jacobs, Los Angeles Pasadena 818.516.4393 2 months ago

Kathy Streib Exactly, educating your clients and yourself. Our contracts can change in a matter of days. As buyers and sellers ask questions, we are able to point to the answer in the contract or suggest they speak with an attorney.

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

Endre Barath, Jr. In any of our litigious states, we need to know the contract. 

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

James Dray Of that, I am sure you do. 

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

Barbara Todaro Forty-two years and out of the courts is a darn good record. I'm only at thirty. :)

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

Wayne Martin I would have been honored to take a contracts class with you!

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

I'm like you, Margaret.  I like going through the contract line by line with clients!

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) 2 months ago

Raymond Henson  Old school that works to keep everyone in the know. I could write a book on contracts written that the clients had no idea what they were signing. 

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

Michael Jacobs It is an ongoing learning process for all of us, you and me included :)

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

CONGRATULATIONS Margaret, on having this blog FEATURED in the Old Farts Club group!  

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) 2 months ago

Myrl Jeffcoat, I sure hope everyone is still taught to do this! 

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

And thank you for the honor of being featured in OFC!  Myrl Jeffcoat 

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) 2 months ago

Thank you, Kathy Streib 

 I love what you do each week to highlight our blogs.

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

Great advice and practice. 

Often our clients will say, "we trust you, we'll just sign." And we say, thank you for the trust, but it's important to know exactly what you're signing. These contracts are quite complex - and binding. Let's just take some time to make sure you're comfortable with everything. 

Posted by Debb Janes EcoBroker and Bernie Stea JD, REALTORS® in Clark County, WA (ViewHomes of Clark County - Nature As Neighbors) 2 months ago

Debb Janes EcoBroker and Bernie Stea JD  

It is wonderful that our clients do trust us! And we have to continue to earn that trust by doing the right thing.

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

One of the reasons I took the classes to be Certified Risk Management qualified was because of the contract and my lack of knowledge being new to real estate. Outstanding question Margaret Rome, Baltimore Maryland and one I believe many cannot answer.

Posted by Leanne Smith, Relocation to NW AZ with elbow room & more freedom (Dirt Road Real Estate) 2 months ago

Leanne Smith Great reason to take this course.  We cannot learn too much about our contracts and all of the subtle changes!

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

Our contracts change all the time.  It is som important to stay on top of them and making sure you understand them.  And speak them in layman's terms.

Posted by Cindy Edwards, CRS, GRI, PMN - Northeast Tennessee - 423-677-6677 (RE/MAX Checkmate) 2 months ago

Margaret:

Contracts are far too complex to not spend the time reviewing them in detail and answering questions. And after the fact saying you weren't aware doesn't cut it...it's in the contract you signed.

And ours changes some every year!!

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (eXp Realty of California) 2 months ago

Cindy Edwards For sure! Make sure you understand the contract and make sure that you can explain it in layman's terms. Good comment!

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

Jeff Dowler, CRS Great comment...And after the fact saying you weren't aware doesn't cut it...it's in the contract you signed."

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

Thanks to Kathy for highlighting you post! I am very glad I read it. Great advise and information. I, too, agree that the more time spent reading through and explaining the contract the quicker and more educated you yourself will be in understanding and interpretting it. 

Posted by Michelle Enciso, Exceptional Service for Exceptional People (Pikes Peak Dream Homes Realty) 2 months ago

Good morning Margaret Rome, Baltimore Maryland ,

You are so right..knowing our contracts inside and out is so important for our clients. Our contracts are promulgated contracts drawn up from our Texas Real estate Commission. We have an addendum that covers everything! Not near as many pages but every year or two their are changes and tweaks that we need to know. Explaining what your clients are signing is imperative and definitely keeps you out of the courts!

Posted by Dorie Dillard CRS GRI ABR, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.750.6899) 2 months ago

Excellent advice Margaret.

I've been in signing situations where I was simply asked to sign...no explanation or details. It's hard to trust someone who doesn't take the time to explain and confirm your understanding of the agreement.

Posted by Sharon Tara, New Hampshire Home Stager (Sharon Tara Transformations) 2 months ago

Michelle Enciso  Good comment..."the more time spent reading through and explaining the contract the quicker and more educated you yourself will be in understanding and interpreting it.'

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

Hi Dorie Dillard CRS GRI ABR I have been thinking about you!

This is so true..." Explaining what your clients are signing is imperative and definitely keeps you out of the courts!"

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

 

Sharon Tara I remember working with an attorney selling his home. He asked if there was anything in the contract that I thought he should read. You know my answer!

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

Our contracts had some big changes at the first of the year. Some just don't make sense. And some are more efficient. But every contract needs going over carefully, always. 

Posted by Gwen Fowler-CRS- 864-638-3599 SC Mountains & Lakes--, Gwen Fowler Real Estate, Inc. (Gwen Fowler Real Estate, Inc) 2 months ago

Gwen Fowler-CRS- 864-638-3599 SC Mountains & Lakes-- Every contract needs going over and carefully!

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

It is SO important to do this and make sure buyers and sellers understand what they are signing.  Even then, it's sometimes confusing and hopefully they will ask questions.

Posted by Georgie Hunter R(S) 58089, Maui Real Estate sales and lifestyle info (Hawai'i Life Real Estate Brokers) 2 months ago

Georgie Hunter R(S) 58089 Forty some pages...yes, of course, it is confusing. Even if you memorized the entire contract and all addenda, there would still be changes and questions that are answered in the contract.

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

Hello Margaret,

In our market of esign technology and relocation buyers, sit-downs for review of docs becomes increasingly challenging, esp. after a day of showing in 2 or more counties and buyers have a long drive home....as can happen in the sparsely settled areas of the country.  

Depending on client and esp. with first-time buyers I might include the Buyer Guide to the Agreement which explains paragraph by paragraph.   You are so right about explaining the contracte in plain language.  That is an art in itself.

Posted by Kris Collis, Associate Broker, Professional Results you Expect 702-574-8102 (Smart Way America Realty) 2 months ago

Kris Collis, Associate Broker Those sit-down reviews can be done over the phone. After a long day, a guide for a buyer to READ is not quite enough. Explaining in plain language is, as you say, an art in itself. 

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 2 months ago

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