Offers on Outdated Forms

  BROKER RISK MANAGEMENT

 WEEKLY PRACTICE TIP

 Offers on Outdated Forms

Q:  I am a listing agent and just received an offer on a purchase agreement form that is ten years old.  The buyer’s agent is a part-time solo broker and this is the only form he had.  The form clearly is missing several paragraphs that should be in the contract.  And even worse, the agent wrote several sentences in “Other Terms and Conditions” that are, at best, very confusing.  My seller wants to take the offer because it is full price.  How can I clean up this mess?

 A:  This situation comes up often with small and part-time brokers.  Also, a similar problem happens when an out-of-area broker uses a purchase agreement form not used, or generally understood, in your area.

 First, discuss the problem with your seller explaining the need to clean up the offer. 

 Second, rather than try to write a VERY long counter-offer cleaning up the language and trying to add all of the missing required paragraphs, you have a couple of options: 

            1.  Reject the offer and supply the buyer’s agent with a blank, current Purchase Agreement form (or the Purchase Agreement form used in your area).  Ask buyer’s agent to re-submit the offer on the new form.

             2.  However, the better approach is to draft a new Purchase Agreement, on the proper form, based on price, terms and conditions which are acceptable to your seller.  In the “Other Terms and Conditions” paragraph write: 

 “A.  The offer dated _________, 200__  is rejected.

  B.  Paragraph number __ regarding expiration of offers is superseded by the following:  This offer shall be deemed revoked unless the offer is signed   by Buyer and a copy of the signed offer is personally received by seller or listing agent by ________________, 200__ .”

                Then have your seller sign this Purchase Agreement and deliver to the buyer’s agent.  This essentially constitutes an “offer to sell” by your seller.  If buyer then signs the Purchase Agreement with no changes and delivers it to you, you have a ratified contract. 

                Buyer could, of course, issue a counter-offer to you by signing the offer, writing under their signature “Subject to Counter-Offer” and delivering the signed Purchase Agreement form to you, the listing agent, with a completed counter-offer form.  In such case you then proceed exactly as you would in all other counter-offer situations. 

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