Occasionally, but not too often, in the course of a back-and-forth offer, before it gets finally approved by all parties, I receive offers “whited-out" for corrections.
Last Wednesday, one of our associates presented an offer he wrote online on a condo for his buyer to the listing agent. The buyer’s low offer was $300,000.000 from a $339,900.00 listing with 25% cash, a 75% conventional loan and a closing date of June 30, 2007.
After negotiations were concluded to an agreeable price of $315,000.00 and a postponed closing date of July 31, 2007, our associate received a fax from the listing agent with all the corrections and all the required signatures and she had her seller initial the bottom of each page of the contract. However, the listing agent whited-out the agreed-upon sale-and-purchase price and the new closing date and she hand-wrote the corrections.
Our associate had his buyer matched all the initials at the bottom of each page and he turned in his paperwork to me for office processing. I immediately recognize the error and I ask him to fax the original first page of the purchase-offer to the listing agent with an explanation to have her cross out the changes with a pen and have her seller initial next to each hand-written change and fax it back to us.
“Why?” he asked. I recited to him an incident that happened four years ago to one of my colleagues who represented a buyer with an identical scenario purchasing a house listed at $495,000. One day before the closing date everyone had just received their HUD statement for review. The selling agent called her, frantically, saying that the seller had never agreed to a price of $480,000.00; the seller claimed that he had agreed to a sale price of $489,000.00, instead. To shorten the remainder of this story, everyone’s attorney got involved; the closing was postponed a couple of days, the buyer finally closed paying his $480K, the seller got his $489K and the listing agent had to pay up the difference. (Apparently the two brokers and their attorneys agreed that the listing agent could not have proven that she did not temper with those figures by whiting-out the numbers a second time after her seller had signed his agreement.)
Our associate called the listing agent. Needless to say that she refused to comply. I call her on the phone and proceed to tell her that same story, for her protection. Obviously I was talking to a seasoned agent who hurriedly reminded me of her long tenure as a Realtor® and she has been turning in contracts in that fashion for all those years without ever having any problems. She reluctantly acquiesced to my request.
She called our office this morning wanting to speak to our associate who was not in the office; she got me instead. She wanted to know if our agent has scheduled a date for the inspection, yet. I knew it was going to be next Tuesday but to make sure of the time, I told her that I’ll have our associate call her to confirm with her.
She took that opportunity, after clearing her throat a couple of times, to thank me for alerting her of the potential liability she had left herself opened to for all those years. I told her that it was simply a professional courtesy on my part.
Real estate contracts are not iron-clad solid. In fact, they are very fragile and vulnerable. A mere overlooked alteration or an unprotected nuance can be detrimentally hurtful to one or all parties involved.
I hope this warning prose will benefit all the white-out artists who err on contract canvasses.
John