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Legal IssuesCan two words change an entire Agreement of Sale?
The PAR Hotline fielded an interesting call last week regarding disclosures, inspections and the Agreement of Sale. The buyers’ agent received a counteroffer, signed by the sellers, that made one seemingly small change to the offer – the sellers added the words “As Is” in the Special Clauses paragraph of the Agreement of Sale.
The buyers’ agent wondered if adding these two simple words threw a wrench into her clients’ offer and prevented them from walking away from the deal if they were dissatisfied with the results of the various inspections. Can these two simple words wreak havoc on the Agreement of Sale as we know it?
It depends! If the buyers selected Option 1 for their inspections, they still have the right to buy the property if they are satisfied with the inspection results and they can still terminate the deal if they are dissatisfied with the inspection results. But if the buyers selected Option 2, or if the inspections revealed some minor inconveniences that the buyers want the sellers to repair, what happens?
The first question the diligent buyers’ agent should ask is what do the sellers mean? ”It’s obvious!” you cry. But is it? Read paragraph 34 and stick the words “As Is” in that big blank space. The sellers PROBABLY mean they are only interested in selling the property in its current condition (“As Is”), but it never hurts to be sure. Back to the real question: What does this do to the Agreement? It doesn’t change anything. This means that under Option 2, you as the agent need to be aware of your buyers’ responsibility to submit a written corrective proposal before terminating the Agreement. OR you can contact the sellers’ agent and ask them if the sellers will agree to terminate the Agreement and return your clients’ hand money without the need of taking those steps. The contract is clear as to who has what obligations.
As a side note, do the words “As Is” prevent your buyers from asking the sellers to make corrections? Heck no! Who knows, they may be willing to incur a couple of hundred dollars of expenses to correct some minor things in order to sell their house… especially in this market!
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Karen Miller, Esq. is an attorney with Caldwell & Kearns and serves as general counsel to PAR. A substantial portion of her practice is dedicated to providing advice and counsel to real estate licensees and representing and defending real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. She routinely counsels employers on employee relations issues as one of the voices of the PAR Legal Hotline. |
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