I have spent the last 15 years as a real estate broker and executive at several real estate firms in St. Louis. My job was a two-sided coin. One side was to successfully grow companies, and the other was to serve and protect the buyers and the sellers who I had the good fortune to represent in their real estate transactions. If the deal started to go south, it was my job to help a hard-working and well-intended agent get that deal to the closing table. Real estate is, in a word, complicated. It is after all, where money, emotion, joy, and a little paranoia all converge on one single transaction. Home is where we live our lives, dream our dreams, suffer loss, raise our kids and pets, and hide from tornadoes and thunder. It’s where we have our cookouts and our knockout family brawls. Maslow had it right… “Shelter is one of our basic human needs,” and real estate pros are on the front lines of that endeavor.
One thing I have learned is that the home buying process can be memorable for all the right reasons if a good agent and smart client are in lockstep. In the Brooks Davis Blog, we are going to discuss those realities here in a series we will call WHAT EVERY BUYER AND SELLER SHOULD KNOW. If you follow this advice you are increasing the odds that you will have a memorable and downright enjoyable home buying experience!
Specificity is Key
I remember when I was a kid learning from Mrs. Lattimer, my fourth-grade teacher, the saying that sticks with all of us through life. To “assume” is to make an ass out of u and me.” You can assume it’s going to rain tomorrow and not water your lawn. If you’re wrong, you might have a few brown spots, and that’s not the end of the world. But assuming something in a real estate deal can change a joyful event into a hellacious ordeal, and can be very costly in the end. Thankfully, the solution is a simple one. Just follow these guidelines and make sure your agent does the same.
If you are buying or selling, write this on your bathroom mirror with shaving cream so you see it every morning…THE CONTRACT RULES! Simply put, if it ain’t in the contract, it ain’t no thang. If it’s not written down and agreed to by both parties, then it is simply an assumption, and remember what Mrs. Lattimer said about that!
Let’s look at some examples. Did you pick the house because you always wanted your kid to have a basketball hoop and there’s a state-of-the-art model attached to the garage? You better put that hoop in the contract in the section marked ‘Inclusions.’ In other words, put that hoop in the contract to guarantee the sellers don’t take it with them.
Here’s another. Did it say on Zillow that the washer and dryer and all appliances are staying? Then you better put it in the contract under ‘inclusions.’ List them with specificity.
Here’s why. The Residential Sales Contract overrides anything else in print (unless some other document specifically says, “This document supersedes and or overrides all other documents”, and both parties would have to sign that.) Remember, the sole purpose of the contract is to outline, in detail, what two or more people in a transaction are agreeing to.
Here is another example. If the seller has stated that the chandelier in the front hall is excluded because it’s from grandmother’s farmhouse back in the day (in other words, they are taking it with them), and the chandelier is one of the reasons you fell in love with the house, then that is completely negotiable in a contract. Put the chandelier in the inclusions section of the contract. The sellers may buck you on that, but many sellers will seriously consider leaving something if it is integral to your interest in the house.
The same is true for exclusions. Here are some examples. If you are not inclined to need the epic jungle gym in the backyard because you don’t have kids (or a spouse who is into extreme sports), make sure it’s listed as an exclusion. That means the seller has to remove it before closing (if they agree to remove it in the contract).
Or, let’s say you are closing in July, and it’s clear that the big oak tree is deader than the grandma who had the chandelier, specify in the contract that you want the seller to remove the tree prior to closing. If both buyer and seller agree, then it becomes part of the contract.
That covers INCLUSIONS AND EXCLUSIONS. Next, we will talk about how the contract is a living document, and changes can be made as the deal progresses toward closing day. Lots of issues can surface because of inspections, title, and survey issues, and all of them can be resolved through simple negotiation. But ALWAYS keep in mind… THE CONTRACT RULES, so all changes need to be in print and AGREED TO BY ALL PARTIES.
Feel free to reach out to Finnessey Davis + CO with any and all questions. We’re here to help!
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