Episode 005 - Live and Die by the Contract
Clients hire us for many reasons, not the least of which is help with various contracts. Those contracts could be the purchase agreement, listing contracts, leases--or many others. While agents are NOT attorneys and should NOT give legal advice, your clients do have some expectation of guidance throughout the contract process. We give helpful suggestions on how to guide your clients to make better informed decisions.
SHOW NOTES
- 00:55 – Talking about contracts. Cate LOVES contracts.
- 01:30 – Contracts are important, and we are about helping you become a legendary agent.
- 02:30 – Clients hire us for many things. Not your pretty face. Access to MLS. They MOST want our expertise on a very complicated transaction.
- 03:35 – We are NOT attorneys but maybe can shed some light and save clients some money.
- 03:50 – Clients think they know about the law. “Uncle Fred told me…”; “HGTV” showed me how to do…
- 04:30 – Contracts are part of the reason clients hire us. Agents should tread carefully, unless they are an attorney.
- 05:00 – Definition of a contract: 1) Legal capacity (legal age and sound mind); Example: Elderly client with diminished mind. Example: Drunk client shows up to closing.
- 07:05 – 2) Mutual assent – both parties agree to the terms. Agreement of promises. Meeting of the minds.
- 08:05 – 3) Legal purpose – cannot enter an illegal contract. Trickery, forgery, non-disclosure, etc.
- 09:05 – 4) Consideration – the reason we are entering into this contract. Example: money, ownership.
- 09:40 – Some contracts are required to be in writing to be enforceable. Example: A lease for less than one year are not required to be in writing to be enforceable in court. This is called Statute of Frauds.
- 10:55 – Can you write a contract on a napkin?
- 11:25 – Verbal agreement, “handshake” agreement issues. Parol evidence rule. GET IT IN WRITING.
- 12:30 – “Ring” doorbell systems and other potential “personal property” items are getting more contentious. Is it a “fixture?” Write in the contract whether the item stays or does NOT stay.
- 13:45 – B: “You are not a legitimate agent until you've had to buy an appliance.” Agent “thinks” everyone was honest and being reasonable, but you get burned.
- 14:25 – Cate: What happens when agent goes on vacation? The contract is what everyone will lean on. Get notes and make sure everything is covered.
- 14:50 – How well do you know your contracts? Challenge: READ all your contracts, front to back. KNOW them! Get with someone that can walk you through them. Your clients are going to ask you about them. Do NOT gloss over them with your clients. Don’t do a disservice to your clients. Do not interpret since you are not an attorney.
- 16:45 – Read your contract in sections. Keeps it fresh in your mind. Jump around so it doesn’t get boring.
- 17:15 – Get with your accountability partner or another agent in your office to practice presenting an offer to your client. Practice, Practice, Practice. Know if forward and backward. Understand what it means.
- 18:15 – Other contract pieces: Addendum and amendment. Addendum means add to an existing contract. It does NOT mean change because you aren’t changing anything already agreed to. Amendment means amend (change, alter) an existing contract. This means you are changing a previously agreed to element of an existing contract.
- 20:10 – How a contract works. Offer and counteroffer process in creating a contract.
- 20:50 – A counter is a rejection of the previous offer and the offeror is under no longer bound by that previous offer.
- 22:50 – Rescinding a counteroffer. The counter is a rejection. Buyer can accept, but not required.
- 23:25 – The best way to handle many contract issues is to re-write the contract. “Don’t be lazy!” Digital contracts make it so much easier. “GET OVER YOURSELF!”
- 26:00 – If you make any change to a contract, your client needs to re-sign the contract. Don’t make a change AFTER they have signed the contract.
- 26:40 – If you are in a situation that is not clear, get with your broker and/or an attorney.
- 27:00 – I don’t like possibly, maybe, sort of, kinda okay is NOT okay.
- 27:15 – Valid, void and voidable contracts.
- 27:30 – Void = we don’t have a legal contract. In fact, a void contract is not a contract at all because it cannot legally be completed. Fraud, deception, forgery.
- 28:00 – Cate = “typical agent”. Voidable = one party has the right to cancel the contract. Example: not of legal age or lack of mental capacity.
- 29:45 – Valid contract = typical contract, has all the legal elements of a contract.
- 29:50 – Breach of contract. Suit for specific performance = court order to force a party to perform their contracted promised. Liquidated damages. Mutual release.
- 31:15 – Cate interjects her philosophical suggestion: “Let your client sleep on it.” Let them vent to you.
- 32:35 – You’re NOT an attorney. Know your boundaries. Ask your broker for help.
- 33:15 – Contract example: Closing costs. Watch your words when you write the contract.
- 34:50 – Your words matter!
SHOW LINKS
BETWEEN THE LINES LINKS
Email
briancleebtl@gmail.com
cate@craftsmanrg.com
Web
brianclee.com
catelee.com
realestatebetweenthelines.com
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