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By Josh Myler
Good real estate agents pride themselves on their knowledge and experience. One attributing factor for this is their openness to learn and their desire to stay ahead of the curve. They understand the importance of continuing their education to help bolster confidence and, in turn, encourage self-reliance.
Working as a team is crucial. It is useful to bounce ideas off of one another, and of course, we do so at The Agency. But let’s not forget that the sum is only as strong as its constituent parts. The old adage holds that knowledge is power. In more tangible terms, it can mean credibility in the eyes of our clients, opening-up a blind-spot and avoiding a potential pit-falls. And it may just keep you out of court.
Recently, I attended a California Association of Realtor (C.A.R.) educational course, and I wanted to take a minute to highlight some of the points covered in that meeting.
The course covered a lot of ground in the (relatively fast) four-hour period. The subject material explored many elements of the RPA and delved into the many connecting forms (e.g., the AD, NSP, NBP, RDN and several others). NOTE: If you don’t know what these acronyms stand for, that’s your first sign that this course is something you’re going to benefit from.
Here are a few course take-aways:
- Familiarize yourself with the 2010 changes to the agreement – There are many. A detailed (red-lined) version of these changes, is available on the C.A.R. site.
- A comprehensive understanding and clear communication of contingencies is critical – Contingencies are one of the most significant considerations of any transaction. Making sure that all parties involved are not only aware of what contingencies mean, but also how they operate, can be critical to the success or failure of any deal. An example of this is when you are representing a Buyer and you are determining the timeframe within which your Buyer must get full loan approval (the loan contingency period). When negotiating the contract (prior to Acceptance), you want to be certain that you leave your Buyer and their loan officer enough time to collect all the necessary deliverables to obtain full loan approval through the bank’s underwriting department, prior to removing the loan contingency.In a climate where most banks have innumerable conditions and restrictions, which are ever-changing, it is important to be aware of how much time is needed. And it is crucial that you communicate this with your Buyer and ensure that they understand fully the variables and consideration involved. Additionally, if your Buyer is vying for a property in a field of multiple other competing Buyers, it may be beneficial to adjust the timing of your contingencies to suit the Seller’s requests. Again, it is best to discuss any type of strategy with your Buyer (and their lender/financial advisors) and make sure you are on the same page.
- Disclose, Disclose, Disclose – A Seller is obligated to disclose known material matters whether the circumstances arise (or become known) prior to, or during, escrow. Imagine a situation where you are representing a Seller, who believes they have disclosed all material facts about their property, and the Buyer has, in turn, removed all of their contingencies. Then, in the late stages of the escrow, a material fact affecting the property arises or becomes known. As a result, there can be a delay in the closing of the escrow or even a cancellation of the contract (allowing for a return to the Buyer of the initial deposit). An experienced agent will be ever-present in their transactions, and they will continuously check in and communicate with their clients and ensure that everyone is on the same page as they navigate through the process.
- Understanding Terms [Definitions as used in the RPA (Page 6. Para. 22)] – There are a number of terms and phrases that are germane to the business of buying and selling real estate. One example is how the term “Days” is defined within the RPA. In some circumstances, the number of days (within which to remove a contingency, for example) includes weekends and holidays (calendar days). In others situations, “Days” translates to mean only business days. Understanding this distinction in critical to determining when certain duties and obligations are to be satisfied (e.g., contingency periods).
As realtors, we need to uphold the standards of excellence and professionalism. In the process of attaining that end, we must remain open not just to reminders, but to reinvention.
