IAR Legal Transactions Attorney Jeffrey T. Baker answered questions and coached REALTORS® on having “No Error Transactions” during his presentation at MREDPalooza on June 23, 2015 in Rosemont, Illinois. Here are some of the top take-aways and best practices from that session.
- Know your client. Who actually owns the property and has the authority to sign the deed? Does your client have power of attorney for the owners? Is a trust involved?
- Explain exactly how and where you will market the property. Pocket listings are acceptable, but are they in the client’s best interest?
- Educate the seller about disclosure duties. These include common law duties as well as those mandated by the Sellers Disclosure Act. It’s your duty to inform the seller, not to provide legal advice.
- Provide all disclosures well in advance of the contract being signed.
- Don’t hold onto earnest money checks. Cash them immediately – the law requires it.
- Changes to the listing agreement do not involve the buyer or the buyer’s broker. Listing agreements are strictly between the seller and the seller’s broker. Do not amend the contract.
- Avoid misunderstandings and protect your right to get paid by obtaining a buyer representation agreement. At minimum, provide a designated agent form up front to establish your duties to your client – this is required.
- Make sure inspection and attorney review language is in the contract.
- “If it’s not in the contract, it’s not in the sale.” If the buyer wants a particular piece of personal property included in the sale, include that property in the contract.
- Be clear about acceptance dates. Acceptance needs to be communicated promptly.
- Pay attention to deadlines and stick to them! Insist that both parties adhere to deadlines.
- Do not leave blanks in contracts. If using a form, write N/A or cross out parts that don’t apply and have both parties initial the change.
- TRID will change closings and how broker’s payments are reported. Get clients ready for closing 7-10 days before the proposed closing date in the contract.
- Respect personal privacy rights. Buyers should not take photos without the seller’s consent. Sellers should not record video without the buyer’s consent, although it is legal to do so. Recording audio without consent is illegal
Members of the Illinois Association of REALTORS® may consult the IAR Transaction Helpline at any time for answers to questions about contract formation, due diligence and closings. The IAR Legal Center is a resource for members of the Illinois Association of REALTORS® related to the laws, regulations and policies that govern the real estate industry in Illinois. Visit http://illinoisrealtor.org/legal for more information.