Contract `Standards' Are Many and Varied

Article excerpt

Byline: M. Anthony Carr

The question, "What is `is'?" may have elicited some guffaws during the Clinton presidency, but it's no laughing matter when it comes to a real estate transaction - especially the sales contract.

Most transactions with a Realtor involved will default to using a contract devised by the local Realtor association. (Keep in mind, not all real estate agents are Realtors, just as not every tissue is a Kleenex.) While consumers can draft their own contract, local and state Realtor associations have dedicated hundreds of thousands, if not millions, of dollars to develop their forms to keep their buyers, sellers and themselves out of legal hot water.

The Washington regional sales contract is five pages, and there are 49 other forms available for the sales contract. Realtors are allowed to write these contracts in this region, meaning, fill in the blanks on a standard form and institute handwritten changes as directed by the client. But many other jurisdictions require that lawyers write the contracts.

Nevertheless, there is no standard contract for real estate. Realtor associations on both the state and local levels maintain their contracts. Builders write and require consumers to use their own version of contracts.

Lawyers can write residential sales contracts for a fee.

And, there are programs and Web sites available where consumers can pay for contract forms. My word on these is if you need to sell a car or other property with a contract - go for it. But there are so many laws, rules and regulations that contracts require for real estate that buyers and sellers could be in for lots of headaches later if something goes wrong with an online contract form.

Gone are the days of a handshake and word of honor between buyers and sellers. In fact, the contract cannot really stand alone with required disclosures, addenda and contingencies that crop up in a real estate transaction.

If you've never seen a transaction file at the settlement table, it's truly a sight to see - more than likely, it will be about an inch thick or more. The real estate sales contract and all the residual forms are only a beginning of the transaction. Then there are the loan papers, which are usually completed before settlement day and add about another inch of paper.

Despite all the pages and pages of information a buyer or seller must trudge through, there are the tricky phrases and paragraphs that must be maneuvered to keep from falling into a legal quandary or money pit. …