Contracts are the basis for every real estate transaction. Contracts are also the first thing that a lawyer looks at when something goes wrong with a transaction. For this reason, it is very important for a real estate agent to have a firm grasp on contract law.
First the basics. There must be an offer and there must be an acceptance of that offer. This is called a meeting of the minds. Pretty simple right? Well, you would think but here is where it gets more complicated. No one should use a word or phrase in a contract unless they came up with it or unless they are aware of every implication which can be drawn from that word or phrase as it relates to the contract. Oh, and commas really matter. One comma can change the meaning of an entire clause. I have seen countless times where a supposed boiler plate paragraph was inserted which contradicted the rest of the contract and called into question the entire contract itself.
There is no shame in keeping things simple. One should not try to be impressive at this level of the game with flowery words or complex phrases, the meaning of which is not totally understood by the author. Be specific with who is entering into the contract. First, Middle, Last, (suffix, if applicable) of each party needs to be spelled out in the contract. Do not use "Owner of Record" or any type designation which does not specifically name the parties involved. As a real estate agent, you should be protecting your client to the best of your ability and if "Owner of Record" runs off with a earnest money deposit, John A. Smith needs to know who to name in the lawsuit to recovery monies. Make sure money is actually exchanged when an earnest money is given or received. I know this sounds stupid, but I have seen where agents have fabricated the existence of the earnest money deposit. Guess who got sued. The agent. Never take, "don't worry about that clause" as an answer. I have seen this as well and it became a problem they had to worry about.
Last and most importantly, if you don't know, ask someone that does.
Daniel A. Selwa, II, would like to announce the relocation of his real estate office to 302 Main Street, North Myrtle Beach, SC 29582. If you have a closing and you want it done right, contact Daniel A. Selwa, II.