Bill Decker of Decker Wealth Management was recently discussing a contract issue he had with one of his vendors, the issue being whether Decker should be allowed to purchase additional product at a certain price.
We’ll call the product widgets in order to protect the guilty.
The vendor’s position was that he did not have to provide widgets, and Decker referred to a particular paragraph in the contract that specifically specified that Decker had an option to purchase more widgets.
Finally, the vendor admitted he “sold all of the widgets to someone else.”
“My sister lives in Milwaukee,” was Decker’s retort.
“Huh?” asked the vendor.
“Oh, I thought we were both just making statements that really didn’t have anything to do with anything.”
In residential real estate, almost all firms use a contract that has been constructed by the Tennessee Association of Realtors (TAR). The Forms Committee at TAR has spent hundreds of hours over the years honing and crafting a document that would be applicable to any real estate transfer in the entire state of Tennessee.
It is nine pages in its current state.
Additionally, brokers also are requiring a disclaimer form that borrows from Decker’s statement and runs the gamut of potential lawsuits.
It states no one in the transaction, in particular the brokers, have any knowledge or expertise about darn near anything especially things like boundaries, termites, investment potential, roofs and at some point, they may add widgets.
In short, this form is a return of the “buyer beware” theme and suggests the buyer construct a staff to assist in examining all aspects of the transaction.
Then there is the federally mandated lead-based paint disclosure, in which the sellers always say they have no knowledge of lead-based paint, and the state-mandated Tennessee Residential Property Disclosure, which now runs six pages, and an equally long Buyer’s Representation Agreement.
Throw in a compensation agreement and a Confirmation of Agency Status form – and sprinkle in a copy of the earnest money check in with a counter offer or two – and you are looking at a package that can run 32-33 pages long.
Since the Forms Committee meets every two years, there are often changes made.
It gets interesting when agents who are not up with the newer forms – or do not sell enough to keep up with the changes – quote from one of the older forms.
Recently a buyer’s agent complained that a seller had not left a home in “broom clean condition.”
The seller’s agent could have replied “Bill Decker’s sister lives in Milwaukee” since the “condition of premises” clause left the building years ago, contractually speaking.
The one thing most baffling to real estate attorneys is how many times they resolve disputes by merely asking “What does the contract state?”
“It states this, but we want that.”
Bill Decker’s sister lives in Milwaukee.
Sale of the Week
The home at 141 Kenner Avenue might be the perfect home. It has a history for selling quickly for a high dollar-per-square-foot rate no matter how the market is faring at the time.
Last week, the 1,784-square-foot home sold for $520,000, a whopping $291 per square foot.
There have been four sales on Kenner Avenue this year, and the average price per square foot was $193.
There are many buyers who refuse to look at homes with a higher-than-average price per square foot.
Likewise, some Realtors will not list for prices they fear are too high.
Both lose in this market, for last month’s sales are ancient history.
Established Realtor Missy Rodriguez of Zeitlin and Company Realtors had the confidence and experience to throw the comps out the window of the downstairs master bedroom when she listed the home.
Rising superstar Nathan Matwijec, also with Zeitlin, skillfully outmaneuvered the other buyers’ agents and landed the desirable home for his clients.
As Realtors slide into slumber – at least those that can sleep – they dream of the perfect listing.
The songwriter’s say, “It goes somethin’ like this,” and Missy Rodriguez’s description went something like the perfect home in the Realtors midsummer night’s dream.
“Fabulously renovated while maintaining charm and character,” she wrote.
“Masters up and down. Large kitchen with granite and stainless, opens to den. Cozy screened porch and fenced rear yard with patio.”
This also is the tale of the incredible shrinking house.
When it sold in a matter of hours in 2001, it was listed as having 1,904 square feet. It sold then for $241,900 after being listed for $239,900.
In 2008, it sold for $394,500, after another short stint on the market.
The moral of the story is that when the house is perfect or even merely great, someone will pay more than market value.
When they sell it, someone else will pay more than market value.
Richard Courtney is a real estate broker with Christianson, Patterson, Courtney, and Associates and can be reached at [email protected]