Make Every Deal a
Pro Tips & Winning Strategies
Did you know the #1 cause of home sale lawsuits is related to mistakes on the Seller’s Disclosure? Failure to disclose known defects exposes your client, you, and REILLY, REALTORS® to legal liability, so remember this rule of thumb: Disclose, Disclose, Disclose!
Instruct your seller to complete their Seller's Disclosure to the best of their knowledge and belief.
NEVER complete or help your seller complete their Seller’s Disclosure.
Read the Texas Association's article 12 Things You Should Know About the Seller's Disclosure and then encourage your seller to purchase Sellers Shield, a helpful resource that also provides your seller with litigation insurance.
Disclose, disclose, disclose!
Email provides an important documentation trail you may need down the road, so be sure to deliver any contracts, addendums, important documents, or important advice to relevant parties via your REILLY, REALTORS® email account, even if you are also providing the information in person. For example, if you had a great verbal conversation with another agent or your client about expectations, document it in an email like this: “Sally, it was great talking to you today! As we discussed, ....”
Be extremely careful about offering your opinion on matters where you are not a subject matter expert to avoid exposing yourself and REILLY, REALTORS® to unnecessary risk. If a client has a question about a subject that you are not 100% sure and qualified to answer, you should always put in writing that the client needs to seek the advice of an expert.
Be Careful with Opinions!
Document important communications
Or if you are delivering important information via email, like an IABS Form, document it in an email like this: "I look forward to helping you. By the way, please take a moment to review the required TREC IABS form when you have a minute by clicking this link..."
If there is ever a question related to a conversation or delivery of a document, you'll have a record of it.
As a REALTOR®, you are expected to be an expert in the process of buying and selling real estate, so you should be an expert on the process and use the correct terminology! Be careful to use the correct terms to avoid confusion. For example, don't say we have a contract or deal if you don't have signatures - at that point, you are still in the offer stage. Another common misunderstanding is thinking Title has to have the contract for it to be enforceable. Once all parties have signed during the Acceptance/Delivery stage and everyone is notified, you have a contract!
Executed Date Noted & Effective Date Established
All Parties Notified - You have a contract!
Your listing? Mark it as Pending in the MLS!
A counteroffer negates the original offer or counter, so be careful in a tight market! Learn how best to negotiate for your seller.
Understand the contract process & terminology
While verbal negotiations of contracts can be a quicker way to reach an agreement, verbal agreements are not enforceable for the sale of real property.
Only written agreements, signed by the buyer and the seller, are valid. The best practice is to put it in writing!
Only signed contracts/amendments are enforceable.
Time is of the essence when negotiating. If documentation is not signed by both parties, there is nothing to enforce.
If your buyer submits a counteroffer, the original offer is null and void and without the seller’s signature, there isn’t a contract to uphold.
Don't make VERBAL AGREEMENTS!
Never make promises on behalf
of your client(s).
Always write agreements on a contract or amendment! If you are negotiating verbally or via text or email, until you have a signed contract, you should use a disclaimer such as: “E-mails or texts sent or received shall neither constitute acceptance of conducting transactions via electronic means nor create a binding contract until and unless a written contract is signed by the parties.”
What does we have a deal mean, anyway? The better thing to say is "we have a contract!” And of course, you can only say that once all signatures are in order. Let the signed contract or amendment speak for itself!
Never say "we have a deal!"
Do not commit your seller to anything!
Put the onus on the buyer to submit a new offer.
Whenever you are negotiating on behalf of your seller, convey what your seller wants from the buyer without making a formal counteroffer to the buyer. The best way to do this is to use the "Seller's Invitation to Buyer to Submit a New Offer" (TAR-1926 Form). The form makes it clear that your communication is NOT a counter offer, but rather a list of items the seller would like to see on a new offer.
Use these Tips when Negotiating for Your Seller
If the subject property is a home built before 1978, a signed Lead-based Paint Addendum is required BEFORE the contract is executed! Additionally:
The seller must sign first because the seller has the obligation to provide information to the buyer regarding any known lead-based paint and/or lead-based paint hazards, including any records or reports the seller has pertaining to lead-based paint/hazards. Your buyer must sign AFTER the seller!
You must provide the EPA’s “Protect Your Family from Lead in Your Home” pamphlet. Be sure to send the pamphlet via email so you have a record of delivery!
Have the addendum signed before you execute the contract! All sections must be completed (checkboxes in B, C, and D) and signatures from all parties are required (buyer, buyer’s agent, seller and seller’s agent).
understand the Lead-based paint addendum
If you are working on a deal where the appraisal is a potential issue, rather than include an “appraisal clause” in the contract that obliges the buyer to increase the down payment in the case of an appraisal shortfall, we encourage you to consider alternatives such as:
Handle Potential Appraisal issues The Right Way!
Increase the down payment on the initial contract up front to handle the anticipated appraisal shortfall. If the appraisal comes in fine, you can always write an amendment to change the down payment back to 20%.
Include a phrase in special provisions that simply states, "Buyer to order appraisal and deliver copy to seller within 10 after days of executed contract date." While this doesn't necessarily obligate the buyer to put up more, it moves the issue to the beginning of the transaction usually during the option period and keeps it from becoming a last minute issue.
SPECIAL PROVISIONS & APPRAISAL CONCERNS
If a seller insists on contract language to obligate the buyer to put up more, please do the following:
1. Write an email that advises your client to review the following language with their attorney. This language was written by our attorneys but TREC has stated that you can not "re-use" attorney approved language and any additions to the contract must be reviewed on a case by case basis. Here's the language:
In the event the property appraisal is less than the sales price, the buyer will contribute additional down payment of up to $XXXXX to satisfy the lender's down payment requirement.
The key to this language is that it puts a limit on the amount the buyer is required to put up in the case of an appraisal shortfall.
2. Upon the client's direction, add the lawyer reviewed and agreed upon language to the contract in Special Provisions.
Intermediary relationships exist if you have a situation where you or two agents within REILLY, REALTORS® represent both sides of a transaction. An intermediary relationship only occurs when our represented buyer wants to see or buy one of our listings. If an intermediary relationship exists, you must:
Have both parties complete the TAR Intermediary Relationship Notice, TAR Form 1409.
You must also have written consent from both parties which must state who will pay the Broker and, in conspicuous bold or underlined print, set forth the Broker’s obligations as an intermediary.
understand the intermediary relationship
We created email@example.com to make it easier for you to keep track of your deals, so please help us make Quickbase as complete and accurate as possible!
Incomplete documentation or mistakes on contracts, amendments, or other deal files can open you and your client up to unnecessary risk. You can avoid many problems by thoroughly reviewing your documents before finalizing them! While a missed detail may not seem like a big deal, it can make you look unprofessional, nullify a contract, lead to confusion requiring the court's input, or result in disciplinary action with TREC.
Use Docs@Reillyrealtors.com and avoid common mistakes!
Blanks on the Contract
A contract with missing signatures, initials, or details is unforgivable! Paragraphs with checkboxes that have not been selected are not enforceable. Missing contact information (including broker info!) can make it difficult for parties involved in the transaction to communicate important info. Take the time to protect yourself and your client - review the details of all required deal documentation!
Increase your success with these habits!
Acquire leads any way you can! Work to constantly grow your network and ask for referrals!
Stay connected to past clients.
Communicate often with clients, and explain things along the way.
Know everything you can about your neighborhoods.
Always work to earn your clients' trust and act in their best interests.
Maintain positive relationships with other agents.
Take the high road and show respect to all parties in everything you do!
adopt the 7 habits of highly successful realtors®