Consistency in using a standard purchase agreement form reduces the extent to which one party uses an unfair advantage over the other party by using tricky language. Brokers often worry that an unscrupulous seller may try to avoid paying a commission while waiting for the listing to expire before entering into a contract with a potential buyer introduced into the property during the term of the listing. For this reason, most listing contracts stipulate that the seller is required to pay his commission to the broker if, after the expiration of the listing, the seller enters into a contract with a buyer who has been introduced into the property during the term of the listing. While such a provision is conceptually reasonable, the seller must ensure that it is appropriate when applied. First, the seller needs to know the potential buyers for whom the broker will claim a commission (knowing this, this can allow the seller to remove these buyers from a subsequent listing with another broker and avoid paying a double commission). The Seller may do so by limiting the applicability of this provision to Buyers whose names appear on a written list of prospects that the Broker makes available to the Seller within a certain period, possibly of the order of ten days, after the expiry of the offer. However, the seller should go even further and limit the names that can be placed on the list of prospects. For example, if the broker sent an explosion of emails to thousands of potential buyers, the seller wouldn`t want to get a list of prospects with thousands of names. The seller should require that the potential customer has submitted a letter of intent or contract as a condition of inclusion in the prospect list, or that the broker has personally brought the potential customer or agent of the potential customer to the property or spoken personally with the potential customer or the potential customer`s representative. The seller should also require that the list of leads be submitted in a timely manner and that the timing of submitting the list is crucial.
(In fact, the seller should require that time be essential for all provisions of the offer.) Of course, the seller must ensure that the “queue” ends within a certain period of time after the offer expires (three to six months seem appropriate). Registration agreements are usually concluded for a certain period of time. However, sometimes the seller may not be satisfied with the broker`s efforts and may want to use the services of another broker. Therefore, the Seller shall reserve the right to terminate the Offer with or without notice, depending on the reason for such termination. Similarly, language in terms of disclosures, especially general language, is always a problem. Often, the requested disclosures relate to issues such as “gaps” in improvements, zoning issues, environmental issues, or the property`s compliance with applicable laws. The seller should avoid such disclosures. It is sufficient that in the purchase contract, the seller carefully negotiates with the potential buyer insurance and guarantees relating to these issues.
The seller should not have to participate in similar negotiations simply to enter into a registration contract. In addition, most purchase agreements contain protective “AS IS” language that provides a counterweight to all express insurance and warranties. Most purchase agreements also provide that any representation or warranty relating to the property will only survive the conclusion for a limited period of time. These restrictions are generally not addressed in the registration agreement. To the extent that Seller makes certain disclosures, representations or warranties in the Offer Agreement, Seller may end up with a liability to the Broker that is more extensive than Seller`s liability to Buyer. The seller does not want to argue with the broker over whether the seller thwarted the broker`s efforts to sell the property because the seller arbitrarily rejected a particular buyer or offer. In order to avoid such litigation, the listing agreement must expressly provide that seller retains absolute control over the process of selecting a potential buyer, negotiating with that buyer, and entering into or failing to complete the transaction (subject to state, federal and other anti-discrimination laws). Some registration contracts contain language that can be interpreted as creating an implied obligation for the seller to accept an offer if it meets the offer price or proceeds in a commercially reasonable manner during the sales process. The seller must oppose this type of language and provide in the offer contract that the seller is free to accept or reject any buyer, to accept or reject conditions, to terminate or continue a contract, to conclude or not to conclude and to act in any way with regard to the sale of the property, as the Seller wishes in its sole and absolute discretion. Many states protect the broker`s right to receive a commission.
Often, a broker has the right to receive a commission by simply buying a buyer who is willing to buy the property at the seller`s price, whether the transaction is concluded or not. Although state law may not require such conditions, registration agreements often include these provisions. While this can be good for protecting the broker, it can force the seller to pay a commission even if the property remains unsold. A contract for the purchase and sale of commercial real estate in Louisiana is a document used to arbitrate certain terms of a commercial real estate transaction. Commercial purchase agreements are more complex than residential contracts and must be reviewed by a lawyer and real estate agent before the parties sign the contract. This type of agreement contains the obligations, responsibilities and rights of both parties. This also includes the location of the property, purchase price and adjustments, serious down payment, buyers` contingencies, options to provide and terminate defaults, representations and warranties, and closing information. These conditions can be negotiated by the parties before the document is signed.
Once it is signed, the contingencies must be fulfilled within a certain period of time before the official conclusion of the sale. Brokers are generally cautious in situations where unscrupulous sellers can wait for the offer to expire before formally closing a trade to avoid paying a commission. To prevent this risk, most listing contracts require the seller to pay a commission if they sell the property to a buyer introduced by the broker during the listing period. Many listing contracts require the seller to provide written information about the property, and some require the seller to provide disclosures or representations or warranties regarding the condition of the property. Both provisions could cause problems for the seller. For example, the wording that the seller provides “all documents relating to the property” is too broad and could result in possible liability on the part of the seller if the seller inadvertently fails to disclose the documents in its possession. Such language could also be interpreted as requiring the seller to provide documents that are in the possession of the seller`s lawyers, engineers or management company. And in the absence of an explicit limitation, the Seller could be held liable if any of the documents, including those created by third parties, contain false or false statements or information. If the broker does not agree to completely remove the seller`s obligation to provide documents, it should limit the requirement to use the seller`s “good faith efforts” to deliver documents and provide that the seller`s obligation relates only to documents that are “in the seller`s possession”.