As always, Fab agents write offers for our buyer clients to purchase homes.
Recently, we have noticed a recurring problem where the listing agents do not read and understand the entire offer. Thus, they present the offer to their seller clients inaccurately.
There are many clauses that may be added to an offer to purchase a home. A contingency for the buyer to sell their own home, a shed to remain or be removed by the seller, appliances to stay or be removed, or even a seller concession to the buyer.
Seller concessions may be worded as, “Seller to credit Buyer $5,000 towards buyer’s closing costs.” This helps the buyer as they will need to bring less cash to the closing table, but it effectively reduces the net proceeds to the seller.
For example, a $400,000 offer with an $8,000 seller concession, is effectively a net offer of $392,000 to that seller. That net number is the number that matters most to the seller. (Of course, in this example, the property must appraise for the gross purchase price of $400,000, and the seller will pay their conveyance taxes and broker commissions on that gross price).
Multiple times recently, we have seen listing agents fail to correctly explain such clauses and contingencies. This may harm their seller clients, as they may be led to believe they are signing a different offer than the one they actually have in front of them. This also causes issues with counter offers and negotiations, as the seller may now wish to change their offer, since they were not made aware of certain clauses.
It is true that as real estate professionals, we cannot give legal advice, nor can we interpret contract clauses; that is why buyers and sellers use closing attorneys in Connecticut. However, it is within our duties to understand the basic contracts and explain the terms correctly.
Before you hire a listing agent to sell your home, ask them about what type of contingencies and seller concessions are common in your market.
Then, take it a step further: Ask your potential listing agent to review a sample offer with you. If they are not familiar with the form at the time of listing your home, how familiar will they be if and when a real offer comes in?