….or it should be.
In NC, a Broker is not allowed to draft a contract. We are given State written contracts where we fill in the blanks according to our clients needs. Our clients do not always know what their needs are which is why they turn to professional real estate brokers for assistance and advice. For this very reason it is very important that buyers and sellers use full time, professional REALTORS (members of the National Association of Realtors) to assist them in this process. You deserve to work with a professional who is serious and committed to high standards.
Sometimes these standards fall short with even the best of agents. Since the NC contract is “fill in the blank” it’s set up to be a “black & white” document. It’s either this or it’s that, there are very few grey areas. However, once inspections are done we start hitting some murky grey and it doesn’t need to be that way.
There were three sales this year where I represented the seller and the buyer was represented by a very good buyers agent. However, in these three contracts the wording on the repair requests was murky grey. In the name of brevity and trying not to draft too much of a contract, they requested that the seller refer to the inspection report, items 6.2(a), 7.1 and 9.4(b). That’s all the requests said….please refer. On one report, item 6.2(a) said “possible problems with the piers supporting the floor joists in the kitchen area. Recommend further inspection by a licensed general contractor”. Raise your hand if you see any problems. First, the “Repair Request & Agreement” is asking my seller to refer to a report. It’s not asking anything beyond that. It’s not asking for my seller to repair anything. Second, if we then assume (never assume!) that they wanted us to do what is on the report (further inspect it), that would mean the seller would hire the inspector to get their opinion on a very important structural detail of the house. Do you see a conflict of interest? What if the sellers inspector says it’s ok? Will the buyer agree to that? Here is a scenario, what if the seller hires an inspector who says everything is a-ok and the buyer accepts that. A year later the pier collapses. What happens? We all get sued. Everyone and I mean everyone GETS SUED. The buyer should always do their own inspections, then the request can be made to the seller with specific recommendations for repair and hopefully an estimate for that repair. Knowing the cost of repair gives you leverage when negotiating these repairs.
Let’s say 7.1 refers to termites that were found in wood laying up against the house. Did you know that the best remedy for this is to spray the entire house? Does the report say this? Probably not. If your “Repair Request & Agreement” does not specifically say that the remedy is not only removal of the wood but also to spray the entire house for termites, do not assume that the seller will make the leap that this is the request. Spell it out. Black and White. If it’s not spelled out, don’t be surprised when they refuse to spend the money once it’s explained to them.
Let’s say 9.4(b) refers to an appliance or a furnace that “needs further inspecting”. The request should then state that you are requesting the appliance or furnace be serviced by a licensed company and any and all repairs made. You might think it spells it out in the inspection report but those reports are notoriously grey. It’s up to the Broker to ensure that their request is understood without question.
Moral of the story, you cannot go in to too much detail when you are dealing with inspection reports and other requests that come up in the course of a real estate contract. As a Broker, your clients rely on you to get this right and save them money. The more grey areas you leave open, the more money that gets left on the table….every time.