Frequently Asked Questions
Why do some paragraphs in our contracts have a little arrow next to them?
This is a little helpful feature for REALTORS and Attorneys alike. Each paragraph marked with an arrow represents a section of the contract that has options or fill-in fields that must be completed and can change the terms of the standard agreement. Take a look at the Purchase and Sale agreement and see how much easier it is to peruse the ‘changes’, knowing that the rest of the language is standard! The only caveat is that you should always make sure that your clients go through the entire contract to understand the obligations that they are agreeing to before signature.
During an inspection period, my buyer client sent a P&S addendum to the seller asking for some work to be done at the seller’s expense. We didn’t hear back and now the buyer’s inspection period has expired. Where do we stand?
If both parties are of the understanding that the seller will not do the repairs and the sale is still on the table, then you are in the clear. If, on the other hand, either the buyer or seller thought that an unexecuted addendum was the equivalent to a termination of the purchase and sale, you have a whole set of problems on your hands. The standard addendum doesn’t terminate the purchase and sale agreement and lawyers and judges may need to sort out the details to see who is deserving of the deposit money.
Helpful hint – If you are representing a buyer and are in the process negotiating repairs or extensions of time during the home inspection period:
(1) Best Practice in all situations: Closely monitor the dates of your inspection contingency so that you will have ample time to submit a Termination in time, should you be unable to find a mutually satisfactory agreement.
(2) Option for when Buyers are Adamant – Consider if the repairs / contract extension is ‘make or break’ and if so, add language stating:
“If this addendum is not mutually agreed upon and executed by XX/XX/XX at XX:XX p.m., BUYER hereby gives notice of termination of the Standard Berkshire County Multiple Listing Service Purchase and Sale Agreement (“AGREEMENT”), dated for property, pursuant to paragraph of the Agreement.”
Remember though if you use this clause – the buyer must really, really mean it! It should be used only when the buyer is fully prepared to walk away from a deal if the seller doesn’t sign their addendum and agree to all of their terms – and the seller may very well walk away from the deal when presented with an all or nothing situation.
Who legally has to pay for a betterment assessment?
It is negotiable. Right now the standard Berkshire Purchase & Sale Agreement states that the seller will pay off any betterments, unless otherwise agreed upon with the buyer. Why? The Seller is the default ‘payee’ (throughout Massachusetts) because a betterment assessment is recorded as a lien on the property assessed by the municipality and it is natural to start there and leave room for negotiations – and many, many buyers make offers agreeing that they will assume the betterment costs since they will go on the enjoy the new sewer or road for years to come.
Seller’s agents will also want to have this conversation with the seller at the onset of your relationship – and language has been added to the Exclusive Right to Sell Agreement to help prompt that discussion. The seller can always disclose, up front in the MLS that the listing price takes into account a buyer assuming the betterment assessment – but you have to remember that any Purchase and Sale contract must also reflect that language change or you must alert your seller to the discrepancy.
I am working with a buyer client, and have presented them with the agency disclosure but chose not to use a buyer contract. Now the buyer wants to see a listing of mine and I will be acting as a disclosed dual agent. I have prepared the ‘Notice of Disclosed Dual Agency’ form for both the buyer and seller to sign. Is that it?
Not quite. There are two steps to acting as a disclosed dual agent: (1) Written consent and (2) Written notice. You can’t jump to notice, as you are trying to do in this case, without first having obtained your buyer’s consent. The law states that a seller and buyer must provide consent (with very specific language) and authorize you to work in that manner should a situation arise. Then, after a transaction has been identified that requires you to act as a dual agent, you must provide notice to both parties of your new role in that transaction.
(1) Best Practice: You should present the consent form at the time you sign the agency disclosure. (This would be the ‘Buyer’s Non-Exclusive Consent to Dual Agency Form’ found in your buyer folder.) You are promising to the buyer that you will represent them in their search for a home – now would also be a great time to explain what would happen if the buyer became interested in your in-house listing.
(2) Option for Consent & Disclosure – If, for whatever reason, you have not obtained written consent for dual agency from your buyer and you find yourself in a situation where they are interested in viewing a home listed by your firm, now would be the time to have them sign the ‘Buyer’s Non-Exclusive Consent to Dual Agency Form’ and confirm that you have the seller’s consent on file as well. This allows you to explain what dual agency is and specifies your duties and limitations. Then, you can have the buyer and seller to sign the Notice of Dual Agency form, which is simply a statement that dual agency will be your role in that specific transaction. In the interest of ‘real life’ showings, your buyer and seller do not need to both sign the same form – if you can get both together – that’s great, but you can also get forms signed individually and both together equal full consent. You should have written notice signed by both parties before you show the property, but legally “such written notice shall be given prior to the seller and prospective purchaser entering into a written agreement for the purchase or sale of residential property.”
Why isn’t there a box to check as a dual agent on the Agency Disclosure?
Dual agency arises when there is a conflict caused by representing both the buyer and seller. At the first personal meeting with a home buyer or seller you have not promised them any agency relationship. How can you start off by disclosing that you are in a conflicted agency role when you have never disclosed to them in writing that you would be representing them as their agent in the first place?
When you sign an agency disclosure, you are disclosing who you represent; either the seller or the buyer. If a buyer is meeting you to view one of your listings – you represent the seller. This buyer will be a customer, with whom you owe no fiduciary duties. If the buyer met with you without a particular property in mind, and you decided to represent them you could complete the disclosure form as their Buyer Agent and should explain how your role may become limited (dual agency) if they are interested in a property listed with your firm.
It would be a great time to obtain their consent to represent them in a dual agency role right then as well – then if the situation does arise, you need only provide notice that it has taken place. Remember too, that to be a ‘legal’ dual agent you need (1) obtain consent and (2) provide notice, to both parties – which is another reason why it is impossible to use the agency disclosure form to make this disclosure.
I work in a Designated Agency office, so I never have to be a dual agent. Right?
Well, yes and no. Dual agency is any occurrence where you represent the buyer and seller in the same transaction. As a Designated Agency firm, this happens less frequently, since it only applies to those clients that you have been named as a Designated Agent for – not all clients of your firm.
For example, you’ve entered into a buyer agency relationship with Buyer Bob and you’ve personally taken a listing from Seller Smith. You’ve taken your buyer to see several properties and now Buyer Bob would like to see your listing owned by Seller Smith – now you have a few options.
- You can refer your buyer to another REALTOR that has no relationship to Seller Smith so that you can remain a full advocate of the seller, or
- You continue to work with your buyer, but therefore must act as a dual agent for both Seller Smith and Buyer Bob. (and obtain written consent and provide written notice, as is standard for any dual agency relationship)
Now, Buyer Bob wants to see the listing of your office mate, Seller Jones. Since you were not named as a Designated Agent of Seller Jones, and because you work in a designated firm, you are free to represent Buyer Bob fully, and the other agent can fully represent Seller Jones fully – as long as you provide ‘Notice of Designated Agency” to both parties, letting them know that you will be their full representative, but that a member of your firm represents the other party and your Broker will now be in a limited role (dual agency). The two forms that we provided you for Consent and Notice of Designated Agency is complete and you do not need to provide dual agency disclosure for a broker acting in the limited capacity – it is included in your Designated Agency forms.
The Exclusive Right to Sell Agreement states that I must submit the seller’s information to the MLS within two days. When does that start?
The language actually reads that the information will be submitted “within two business days of the seller’s signature”. This means that
Seller’s last signature is on…
- Monday ………………….. submit it no later than ……….. 5:00 p.m. on Wednesday
- Tuesday ………………….. submit it no later than ……….. 5:00 p.m. on Thursday
- Wednesday ……………… submit it no later than ……….. 5:00 p.m. on Friday
- Thursday …………………. submit it no later than ……….. 5:00 p.m. on Monday
- Friday …………………….. submit it no later than ……….. 5:00 p.m. on Tuesday
- Saturday …………………. submit it no later than ……….. 5:00 p.m. on Tuesday
- Sunday …………………… submit it no later than ……….. 5:00 p.m. on Tuesday
My Seller does not want his listing placed in the MLS. What do I need to do to prevent getting fined?
The seller will need to sign a ‘Refusal to List’ form along with the Exclusive Right to Sell Agreement. Send both of these signed documents to the Board Office in the standard 2 day time frame shown above and you will be all set.
What happens if my seller wants the listing in the MLS, but not for a couple of weeks until they are ‘ready’?
The seller will also need to sign a ‘Refusal to List’ form along with the Exclusive Right to Sell Agreement. The ‘Refusal to List’ form has a second option about delayed dissemination, where you actually specify a date that the seller wants the MLS listing to begin. In this instance, you will need to send both of these signed documents to the Board Office in the standard 2 day time frame shown above and you will be responsible for entering the listing and photo on the day that the seller has designated..