Agree initials request
hey there Matthew thrift here again with Berkshire Hathaway HomeServices see Dan Joyner Realtors in Greenville we're going to be discussing the exclusive right to buy a buyer agency agreement SC our form one-30 that just came out January 1st 2020 of this year we've made some minor changes in the contract so this is an update to the previous video that I made for the buyer's agency agreement again some little changes in here some little new wants us to bring you all up to speed remember my disclaimer not an attorney strictly a broker in charge for the firm that I work for if you work either for this firm and your broker tells you to do something other than what I say in this video or you work for another firm and your broker is saying something other other to do then I say in this video please please please go by what your broker is telling you to do that's who your license is under that's who you theoretically work for so please go by what they're saying again here's another disclaimer I am human I am NOT God I'm not an attorney I am errant so I can make a mistake if you find that a mistake has been made in this video or something that I say please kind of let me know I will gladly gladly take care of it and correct it because that's what we do as human adult human adult's let's go let's start out with section 1 so section 1 deals and it's called the appointment of the broker basically this is this becomes your parties of the contract it's by this contract and it's a blanked line so that is your buyer you're full by your names and then it appoints broker in charge of the brokerage name it's not it's not your name it's not your brokerage name it's that brokerage name in that second line there as the buyers exclusive agent and I'm gonna go down to the last line in the paragraph because we're going to need to know about what the word negotiation means in this contract and it simply explained here the last line the negotiation as used in this agreement shall mean property shown negotiated or information requested by buyer through the broker or through broker so negotiation just doesn't mean taking a contract or an offer and writing it and going back and forth in a negotiation it just means properties shown or even information requested by the buyer through the broker so I just want to make sure you're very very well-versed on that it says that buyer Greed's to conduct all negotiations four types of property described in section two below through the broker it's an exclusive right to buy basically this is almost like a marriage agreement you agree to work directly with the broker that you're that they're signing with so please make sure to point that out to your buyers other than that there's there's not a whole lot read it read it read it and I'll say that throughout the entire video read this thing word-for-word and when you want more information or to get that thorough understanding of it you know come back and watch this video but I'm not gonna read every word in every section just so you know so I'm just trying to explain it to the very best of my ability let's go into section two section two talks about the purpose of the agency why is a contract even necessary for buyers and real estate agents well this is what actually creates the agency relationship between the buyer and the broker brokerage or agent out there this document right here so the state law stuff South Carolina real estate law says there has to be some things described in an agency agreement that make up this contract one of those is the type of property that you're looking for and in Section two it has four excuse me five little check boxes of the type of property that you're looking for for this particular buyer you have to have a general description and you have to have an approximate price range that's all in real estate law so the general description could basically be so generalized to say a three-bedroom to two-bath single-story home in Greenville County or a three-bedroom two-bath home in Florence or wherever you are basically Robin Greenville County so I'll refer to the Upstate just for sheer geographical purposes but 3-bedroom 2bath single-story home in Greenville or 3-bedroom 2bath home in the such-and-such high school district general general description and the approximate price range could be from 200 and $225,000 that's pretty self-explanatory general location could also be in the city of Malden or in the county of Greenville a general location you don't necessary have to put that in the general description you can put it in the general location as well preferred terms would be there let's say there are veteran they want to use a veteran's loan say you could put the preferred terms would be on a veteran's loan or if they're specifically looking for a USDA property you can put that in there as well other would be they're looking for a house with a swimming pool so you want to put some other stuff in there like swimming pool fenced-in yard or any sort of anything else that they may be looking for just to remind you of exactly the type of conversation that you have what they're looking for so you can best help them and what they're looking for other than that not a whole lot there let's go into section three section three talks about the brokers duties as the real estate agent watching this this is what you how you are going to perform for your particular client and there are several things broken out here and again we won't read every word but I definitely want to read a it says the broker shall provide to buyer a meaningful explanation of agency and shall use brokers professional real estate knowledge and skills to represent the buyer in a diligent and effective manner and to locate property which is available for purchase or lease and suitable to the buyer so say we have to provide that meaningful explanation of agency what's that the South come on in disclosure of brokerage relationships okay you've got to do that that is state law but it's stating again here that's part of your duties be if the broker is not representing the seller the broker shall represents solely the interests of the buyer in all negotiations and transactions regarding the acquisition of real property and repudiate any agency or sub agency relationship with the seller or the company representing the seller and shall not claim the sub agency compensation offered to the selling broker in a Multiple Listing Service basically in our brokerage we don't even allow sub agency so we're not even gonna deal with that whatsoever okay it is basically saying we're gonna exclusively represent the sole interest of the buyer it goes on in Section C if the if you as the agent are representing the seller that there must be disclosed dual agency you have a form to fill out and sign for that as well and it says you shall not disclose to the buyer information obtained within the confidentiality and trust of the fiduciary relationship with the seller and basically vice-versa and then d the broker may represent other buyers who may be interested in the same property as the buyer upon termination or completion of this agreement brokers shall keep confidential all information received during the course of this agreement which was made confidential by written requests or instructions from client except as provided for under South Carolina law okay if you do have a client that's interested you have to buyer clients if you have a client interested there's something called the multiple buyer disclosure that you'll need to fill out it's in zip forms that doesn't happen very often but it can so make sure that you have that multiple buyer disclosure and that even after the termination of this scream and anything that you heard underneath the timeframe of this agreement you must keep confidential so make sure that you're following ethics and state law on that the second paragraph broker represents the broker that they're duly licensed under the state laws of South Carolina well if you're a member of the South Llano Association of Realtors you are licensed under the state so we we know that that's pretty standard and then it says broker will use his best efforts as buyer's agent to locate property of the type described in Section two of this contract and to negotiate acceptance of any offer by buyer to purchase or lease its property during the term of this contract broker will give buyer information describing and identifying properties that appear to broker to substantially meet conditions set forth in section two it's basically telling you you've got the information you've got the type of property that does general description the price range and you as the agent are going you're going to give that information as best as you possibly can to the buyer for them to make a decision upon what they're looking for other than that I think that takes care of Section three let's go into section four section for buyers duties and buyer agrees too now if there's if there's anything that you really need to be very specific when you're talking with your buyers and when you're presenting this document in front of them I this is where I would spend the majority of time with your buyer because honestly with being a broker for the past eight or nine years and then a regular agent before that I think this is the section that most buyers have a hard time and this is where they default so let's let them see where they can default on this contract it says buyer agrees to a under Section four were and it's in bold work exclusively with broker and its affiliate affiliated licensees during the term of this agreement by and tell you how to work exclusively with them by a viewing any property or previewing only with the broker or brokers designated representative and not with another real estate broker salesperson or seller that's a number one do not go out and cheat on me we've signed this agreement you only look at properties through me or my designated representative number two exclusively allowing broker or salesperson to identify property negotiate for buyer and otherwise to represent the buyer okay that's pretty self-explanatory as well and three referring to broker all inquiries received in any form from any other real estate broker or affiliated licensees anything that they get in the mail telephone call text message email they need to refer it back to you so that you can take care of that number for holding the broker harmless from liability as a result of incomplete inaccurate information provided to broker or buyer or seller okay so we don't know everything about every property that we're going into basically what this says that the buyers agrees to not hold me accountable or responsible for information of finding out incomplete or inaccurate information from another source so there's a lot of protection in here for us number five holding the broker harmless from liability as a result of sellers failure to provide a complete seller's property condition disclosure statements so if the buyer is looking at a piece of property and the sellers disclosure is not fulfilled it's not the brokers responsibility it's not because that seller is fully responsible to fill that thing out you know that we can't really touch those sellers disclosures so it's not our fault that the seller did not fill it out completely so number six indemnifying or paying for broker against all claims damages losses expenses are a liability arising from a handling of earnest money by anyone other than the broker so that's protection for us as well if earnest minds if honest money is being held by an entity other than our brokerage which again this year CEO and joiner is really wanting all earnest money to be held at the closing attorney's office we're trying to get away from holding earnest money because of problems this is this is even reinforcing it that you hold us not liable and you pay for our claims and damages or losses that we would suffer if it's if if there was a problem with another earnest money holder that had something go wrong and let's go to be assist broker and its affiliated licensees in the process of identifying negotiating and contracting to purchase lease or otherwise acquire by and says number one providing broker with reliable information including financial information and written authorization to obtain verification of funds that broker deems necessary for the performance of this agreement so basically this tells the buyer right here we need all accurate information for your finances and how you're going to pay and with your accurate from your bank account and things like that once we need to if we need to provide that it needs to be accurate please provide that to us accurately and number two making himself available to meet with broker and to see properties in order that the broker will be able to perform the promises of the brokerage agreement okay so if the if the buyer is not making themself available when properties become available that they've identified in Section two it's not the brokers fault the buyer needs to make themself available come on they're buying a house this is a very big decision if you can't look at properties and they get lost or if they get contracted on don't be mad at me and as the agent or don't be mad at your agent because you didn't make yourself available because you continually were working and even though that you knew it was a hot market you did not make yourself available to look at properties see provide broker and its affiliated licensees to follow an information the general nature location requirements of this art property well they've done that in section two and price range in other terms and conditions relating to the desired property again they've done that in section two hopefully and D to authorized buyers attorneys and the settlement agent to furnish to brokers copies of the final settlement statement for the transaction prior to the closing date so they're giving the attorney permission to provide us the sellers are the closing disclosure prior to the closing date right in this document here and on the bottom of each page you have a set of lines for for buyers to initial and then it says the broker have read this page well as the affiliated licensee you're able to initial on that page if the if you're representing that buyer you're to initial there to make it of executed contract between the brokerage and the buyer or buyers let's go on to section five section 5 is the compensation of the broker and there's a there's a few things in here that could have your buyer have a little bit of heartburn but I'm gonna try to explain it in a way that will doubly be beneficial now I'm gonna start off by saying there there is some there's a difference of opinion here with between a lot of brokers and between a lot of agents and the way that that we get paid okay I have a difference of opinion just because of the simple fact of how litigious our society is and how personal this industry is so I'm gonna explain mine but again like I told you the beginning of this video if you find that your broker has told you something different and they want you to fill out something different please go by what your broker has said ok so compensation of the broker brokers fees will be deemed earned when the buyer when buyer is under contract to purchase any property presented by broker or negotiated by buyer remember that word negotiation it's not in section 1 okay it's not just an offer written it's property shown or information that the buyer requested on so they've if they've requested information on that that is also covered in here as well this fee will be due and payable at closing or upon buyers default okay that's the first heartburn upon buyers default buyers don't necessarily get comfortable with that okay but there's ways to go around that and basically overcome that right there if buyer defaults the total compensation that would have been due broker will be doing payable immediately in cash from the buyer well that's number two heartburn you tell somebody that if you mess up you owe me immediately in cash for the amount of money that I should have made off of the transaction so in consideration of the SIRT of the services performed by broker under the terms of this contract the buyer agrees to pay broker the following fees now if you've made the mistake of telling your buyer at the front of your conversations that they will never have to pay you and that you get paid by the seller and then you go to explain this document that may be a very uncomfortable conversation that you're having okay now most of the time if it is a MLS type sale you as the buyer's agent are getting paid by the selling brokerage because remember the selling brokerage was hired by the seller the seller is gonna pay the selling brokerage that's their contract and then the MLS agreement is between the selling brokerage and the cooperating brokerage that's who's paying us but if you've made the grave mistake to say you're not you're not you won't have to pay me and then you come up to a for sale by owner or a property that's not in the MLS there's a precarious situation there so there ways to go about that there's two ways to handle that when that does come up again that's why there's so many differentiating opinions on this but it says it says check and initial all applicable sections I want to make sure that you understand that check and initial so there's a line there you check the box and then you initial those lines or you have the buyer initial alliance that they want okay now it starts off with a the brokerage fee option one buyer shall pay broker a brokerage fee which is the greater of blank dollar amount or blank percentage of the purchase or total lease price okay what you can't do and I've seen this in a few buyer's agency agreements you can't put two to three percent there has to be a defined amount that you are working for it can't be a range okay so I just want to make that point very clear okay now again there's some differentiating opinions on that I don't care there's got to be a defined amount that you set in this agreement of the purchase price or total lease price renewable of apical of any property purchased or leased by the buyer including for sale by owner properties now let's stop right there if you have 3% in this agreement here and you don't find anything in the MLS and you take your buyer to a for sale by owner and your for sale by owner only says well that's fine I'm only going to pay you one and a half percent I'm willing to pay you 2 percent you've got to be very careful of how this is written or you're gonna have to a if you're dead set on getting your full 3% which I mean you should be but if you are then you're gonna have to have the buyer pay that that extra fee that extra percent or that extra point a half that the seller is not paying for it if you're somebody on a transaction we'll discuss that in here a little bit more it says if within blank days after the expiration of this contract by our purchases or leases any property which broker has negotiated there it is again during the term of this contract the buyer will pay broker the bokor it's free stated above the broker shall use his or her his best efforts to obtain payment of the brokerage fee out of the transaction okay so to stop there it says brokers shall use his best efforts to obtain payment payment of the brokerage fee out of the transaction okay so that's easy when you're dealing with a MLS listing but if you're dealing with a non MLS listing let's say a builder a new construction that's not an MLS there's no compensation being offered or that again not going that back to that for sale by owner if you can't get the full amount that you've asked for here it states we're gonna try to get out of the transaction but if we can't buyer shall have the obligation to pay broker the brokerage fees set forth in this contract if broker cannot obtain payment of such be out of the transaction any fees paid by seller or seller's agent shall be credited against a brokerage fee okay so if if you've asked for 3% and you get 2% from if there from the for sale by owner that's getting credited against that 3% then therefore the buyer owes you the extra 1% now I always ask people and live training how many people would absolutely do that would they force their buyer to pay that extra money and a lot of times I'll get a mixed crowd I'll get some people saying yes I'm gonna put that on the buyers side and artwork some people say well no I'm not gonna do that at all okay so let's take for example a builder that's only paying 2% but you've asked if you have option one checked you have 3% here are you therefore going to stick that extra 1% to your buyer again some of you may some of you won't some of you say no it's not worth it because I don't want to lose my reputation okay and that's where it all boils down to are you going to fight this and because for such a personal relationship business are you going to force this and you know some people may some people won't this definitely is a good thing for the brokerage in case a buyer defaults on a brokerage or does something against a brokerage if you have option one checked it gives the brokerage the authority and the legal binding ability to take somebody and hold somebody accountable in a court of law however we don't see that very often matter of fact I've never seen it I'm sure it's been done matter of fact I know it's been done I know it's been done to an agent outside of South Carolina but it may have been done here in this state as well but I've never seen it now I'm gonna go to option two then I'm gonna read it very plainly and clearly it's this option to broker shall obtain payment of the brokerage fee out of the transaction broker shall be paid by the cooperating broker as stated in the Multiple Listing Service or as agreed to by the broker and cooperating broker or as agreed to by the broker in the seller and a for sale by owner transaction the last line buyer shall not be responsible for paying broker the brokerage fee so if you have had that statement where you said don't worry you won't pay me anything you may want to think about going with option 2 now again there are some brokers out there and some trainers that would say this is absolutely something that you really kind of want to stay away from because you don't work for free nobody works for free ok I look at that and I go if you're going to come up on a situation where you cannot get paid most of the time whenever I've seen this you can't get paid from a for sale by owner or something along those lines most of the time I have seen a buyer step up to the plate and say you've worked hard for me you deserve it well we'll put that in the transaction cost or however we're gonna do it kitchy paid ok so that's the majority of times that I see this there may be times where if you can't get the brokerage fee out of the transaction and the buyer says no I don't have to pay you there may be times where if you check option 2 where you may have to say that I can't sell my buyer's agency contract at this point because I'm not able to obtain it and I'm not gonna be able to to fulfill my end of the bargain because my brokerage won't allow me to work for free and that maybe have to be referred out or however that needs to be handled again I've not seen that happen again it may have happened but I've not seen it now my personal professional opinion is option 2 and I'm going to explain why so since we've already said exactly what option 2 is let's go back to the scenario of maybe a seller or a builder that's only offering 2% and you have 3% in option 1 okay so that that obligates the buyer to pay the extra percent okay we can go round and round about who's right on that the buyer should pay or you to just let it go okay but what what happens if you have 3% in here and you have a builder or a seller that's offering 4% some builders even offer up to 5% and bonuses so I look at that and I go well if you're only contracting to charge this buyer 3% and you're stating that you're going to get it out of the transaxle you're getting that and you're taking a whole lot more ethically you should turn right around and offer that extra percent or that bonus to your buyer because of the fact that you told them you were only going to take that amount so by this contract theoretically you can't take more now can you amend this contract can the buyer agree to pay you in another contract for example for a bonus as long as it's disclosed yes they can but if a if you accept more and they they did not have the opportunity to to challenge that or approve that or agree to that theoretically you could be in violation of your own contract if you said you're only gonna charge me two three percent and you took four percent and/or a bonus on top of that and you didn't offer that back to them okay that would be a very discouraging type of legal legal battle there in court when you're sitting upon a courtroom stand and you're saying why was I only charging three percent but yet you took four percent plus a bonus and you never offer that they never even gave the authority that you could do that now okay some point if you're an option to the way this is reading whatever you're being offered you're you can get it from the transaction so there's not a percentage being offered it's just whatever you're getting out of the transaction if you choose option two if they're offering you three percent you can take three percent if they're offering you for you take four they're offering you four plus upon us you take four plus a bonus okay or if throwing off you - that's it is you take two and you don't have to go in a menu don't gonna get an agreement son you don't got to get a authority to do so it's just whatever happens in the transaction you take and then nobody's being threatened that they have to pay more just because the seller didn't offer you the amount that you are asking for nobody has to go to amend or correct this contract so again there is arguments that can be made on both sides of this and that's kind of where I stand again I've been told that I'm wrong on even feeling this way but that's okay I mean that that people are entitled to their opinion as well as I'm entitled to mine but again my preference and check with your broker check with your broker on their preference on this my preference is option two option one does leave it open for the company to have some legal ability to go back on a buyer if necessary but again I I don't I don't like to think that as agents we're gonna go after our buyers for not fulfilling this area of the contract or not coming out of pocket for what you did not get in the transaction again my opinion if you don't agree with it I understand it's okay just go by what your broker has said in Section B there other the buyer will pay the broker the following okay let me just go on record here and say this is not something that our company encourages at all we don't do retainer fees we don't do service fees nothing like that now is it illegal no it's just something that our our company executives have said that they do not prefer neuro do they want to see and our agreements service fees being one of them there are companies out there that they will charge a fee on top of what they're making in Commission to pay for a transaction coordinator and again nothing by law is saying that that's wrong but what can happen is is if the agent is only being offered 3% and they want that buyer to pay that transaction coordinator fee of whatever it may be that's coming right out of the buyers hands okay so they're they're actually charging these fees on top of what they're making this particular section is pretty clear about the fact that the brokerage fee in Section a if you're only charged in 3% in section a option one that brokerage fee is supposed to be credited toward that service fee not the service fee on top so I'm gonna make sure that everybody understands if you're going to charge a service fee that's to be taken outside of your brokerage fee that you're actually requesting your buyer to pay it's not paid on top so I just want to make sure that everybody understands that but other than that if you're with our firm we do not push this particular section at all as a matter of fact if I was filling this out I would I would almost ask the buyer to strike through this because we're not going to do this whatsoever okay so than that that's really all I'm going to say in in that section let's go on to Section six term of agency Section six the term of agency is basically just your beginning and your end dates of the contract we don't even need to spend a whole lot of time on this it's you go under exclusive terms on such and such date and it ends at 11:59 on such and such date that's pretty pretty self-explanatory I don't think we need to continue on let's go on to section seven section seven talks about the consent to disclose agency and designated agency in the very first line there talks about the Sofitel and a disclosure of brokerage relationships it simply says buyer acknowledges receiving an explanation of the types of agency relationships that are offered by brokerage and a South Carolina disclosure of real estate brokerage relationships form meaning you provided them a meaningful explanation and you also provided them a copy of the disclosure of real estate broker relationships document at the first practical opportunity at which substantive contact occurred between the buyer and our broker and the buyer so what is substantive mean but it simply is this basically if you've moved past the point of talking about just generalities of location and different homes and you know how many kids you have and how long you've been married but now you're asking the buyer is asking about the price of the home they're asking to look into it that's a honeymoon how many square feet they're they're really digging and how many bedrooms you know what do you think the utilities are about this home if I mean substantive contact what do you think the lending rates are right now do you think that we will be able to qualify hey let's go see that home because I'm really feeling interested I really like the way it shows online and I my wife and I have talked about this and we really want to dig into this house a little bit more that is substantive contact and information being shared about real estate so that's what they're looking for again if it's just general information about the real estate market or some of these children or whatever the case may be you know how many again how many children you have or how long you've been married that's not really substantive contact of a real estate they're looking for that really deep down questions and advice on real estate and property it says buyer acknowledges that after entering into this written Agency agreement agent might request a modification in order to act as a dual agent or a designated agent in a specific transaction if asked so you got two lines there too for dual agency and two for designated agency remember dual agency is if the the buyer's agent is also representing the seller so the second line their permission to act as a dual agent will not even be considered okay so you have different telling you this upfront if you have a listing it matches my criteria I want to be represented solely by you know sole interest of my of my miss best interest so I'm not gonna let you do a dual agency they're telling you right up front but it also says permission to access the dual agent may be considered at the time I am provided with information about the other party to a transaction if by our Gries buyer will execute a separate written dual agency agreement so they don't really have to agree right now they're just saying if it comes up at the time I'm presented with the information I may say it's okay and again the same thing with the designator you see what they're not gonna accept designated agency or they're gonna say you know what let's just wait if it comes up we'll discuss it then and see how we feel at that time other than that again the bottom of the page you have for buyers to initial and the the agent slash broker to initial this page as well too so they can move on to section eight other potential buyers Section eight other potential buyers and this is this is pretty easy to understand but we needed we need to still go over it a little bit because there's some there's some things I want to explain it says buyers understand our buyer understands that other potential buyers have entered into similar agency contracts with broker which may involve the purchase release through the broker of the same or similar property or properties as buyer is attempting to purchase or lease the buyer consents to brokers representation of such other buyers broker agrees not to give buyers confidential information to such other buyers and not to give such other buyers confidential information to buyer unless otherwise agreed okay so so basically that's going back to that property that you as the agent have two clients on that are interested in that same property whatever by our a told you you can't tell by our B whatever by our B told you you can't tell by our a and remember you have to have the multiple buyer disclosure to say hey I have for you as agent I have two buyer clients interested in the same property everybody needs to know about it and I want you to know miss services buyers by RA by RB that I'm not going to provide anybody else your information nor their information it's going to remain completely confidential I just want to make you very very well aware of that okay be very careful make sure you get that multiple buyer disclosure if this does come up that's going to section nine section 9 indemnification of broker it says buyer promises to disclose to broker whether buyer has signed any agency agreement with any other broker or has been given prior information about any property that is the subject of this contract by any other broker or salesperson or has previously been shown any property by any other broker or salesperson okay stop okay you want to really really get this point across to your buyer okay they need to find out whether they've signed an exclusive right to buy and you know there's some there's some things about whether or not there was cause to have an 8a buyer to leave a broker and then go with another broker and they're the contributing cause to the sale of the writing of the contract there's all sorts of things like that I'm not gonna get into that on this contract or on this video okay not at all there's not an over the threshold or whoever shows in the property first there's not that okay but my opinion if somebody automatically tells you that they've they've signed an exclusive right to buy you need to stop what you're doing and you need to say you need to contact that other agent or you need to contact the other broker and if you don't choose to work with them anymore you need to go through that broke over that agent and have them release that agreement and you do what you can to get them to get back to that agent that's just the right thing to do now there's gonna be people on here that are gonna disagree with me because there are buyers out there that abandon people that abandon other agents they abandon brokerages and I get that it's ethically if that happens and all of a sudden the buyer starts looking in another location and they don't ever let you know and you don't have knowledge that they sign another agency agreement theoretically you haven't committed an ethics violation but if they tell you that they sign another agency agreement you want to stop what you're doing get that release and then if they want to continue to work with you then take up the the the relationship at that point but don't do it if they've told you that they have another agency agreement out there that's just not something that you want to do as a realtor and we live by the golden rule do unto others as you would have them do unto you let's see if buyer fails to tell broker about such other brokers or sales persons involvement and broker and kurz any loss or damage as a result of any claim being brought against him on account of such an involvement due to no fault of the broker which they would have no idea then buyer shall pay broker all such losses and damages incurred by broker because of such claim so basically if the buyer doesn't tell you and you help them and all of a sudden the other agent takes you to court and you lose it's the buyers responsibility to pay all your court costs are your losses and the commission that you have would have been having to pay to the other company so that's pretty big you need to explain that to your buyers so let them tell you exactly if they have something that's why it's it you don't really want to get involved in this this could be a very very bad thing and again some people gonna disagree with me but I just think if somebody tells you send them back to that other agent that's the right thing to do if they say I don't want to work with that agent they never help they never help me they never did anything they were show me properties we just don't agree then tell them to contact the broker and charge them the broker in charge handle that for them that's what I gotta say about that let's go to section 10 disclosure Section ten disclosure of the buyers identity and or / confidentiality I just want to say that we really don't see a lot of this of confidentiality being done in residential this is done more in commercial especially if other large companies are coming in I won't say any companies on this particular recording but large companies coming in the company doesn't want people to know who's coming there they could sign a confidentiality agreement we really don't see this on the residential side the broker does or does not have the buyers permission to disclose the buyers identity to all property owners and other third parties the buyer is advised of the possibility that seller or seller's agent may not treat the existence terms or conditions of offers as confidential unless confidentiality is required by law regulation or by confidentiality agreement of the parties now the the one time that I did see this where a buyer wanted to remain confidential when the offer went to the other side the seller the seller just basically refused to cooperate with the offer and basically started rejecting it until the buyer said who they were okay so kind of backfired on them and and finally the the buyer ended up having to disclose to the who they were so that's why I say you don't really see this in residential very often hopefully your buyer just is okay with you given with you saying they do have permission that's all I really gotta say about that let's go into a section 11 broker liability limitation section 11 the broke reliability limitation now if you notice on this contract this particular section is written in italics this is a section that can be very difficult to explain and so we're going to do a little bit more reading in this section than any other section probably other than maybe section 4 in the contract because you've really got to get an understanding of this to appreciate it and to be able to understand it to explain it so it says buyer agrees broker provided buyer with benefits services assistance and value in bringing about this contract and consideration and recognition of the risks rewards compensation and benefits arising from this transaction to broker buyer Gries that he shall pay brokers attorney's fees and that broker shall not be liable to buyer and in an amount exceeding the brokers compensation by reason of any act or omission including negligence misrepresentation errors and omission or breach of undertaking except for intentional acts so that's a whole lot of jargon to basically say this if the buyer wants to sue you or take you to court this contract is is intended to protect you from not having to pay out anything more than what you would have made in the transaction to begin with it says it won't exceed that brokers compensation but it does say except for intentional acts now if you go out there and you do something intentionally or wilfully this deal is off the table if you just did something by accident your this contract is written to try to cover you and I'm not going to sit here I'm not an attorney and say this contract will completely cover you in everything it I'm not going to say that at all I'm saying it's written and the intent is to do that for you this limitation of liability shall apply to all claims losses cost damages or claim expenses of any nature from any cause causes X intentional willful acts we've already talked about that so that the total liability the brokers shall not exceed the amount set forth herein again it reiterates it buyer will indemnify and hold harmless and pay attorneys fees for a broker from breach of contract any negligent or intentional acts or omissions by any parties inspectors professionals service providers contractors etc including any introducer recommended by the broker the buyer agrees that there is valid and sufficient consideration for this limitation of liability and that broker is the intended third-party beneficiary of this provision basically if I recommend a few for F I recommend a third party and they do something wrong again the buyer is going to pay and hold me harmless from what these third party professionals do okay I can't control what a home inspector is gonna go inside a house and do I can't control what a termite inspector it's going to do if they do something ridiculous or intentionally or willfully I can't be held liable for that at least that's what this document is saying so again just kind of get up a handle on it just let people know hey just so you know if I do something wrong you think I want to sue me this contract is only going to go for what I would have made in the transaction and and that's really all I would leave it at it does say that it would you know you're going to pay my attorney's fees and everything else if you decide to sue me hopefully we won't ever have to go down that road that's just hopefully that's the case let's go into section 12 section 12 non-discrimination it says the broker and buyer agree that all actions carried out under this contract shall be in full compliance with local state and federal fair housing laws against discrimination on the basis of race creed color religion national origin sex familial status marital status age of disabilities listen if you're going to discriminate do not do it okay just put it right there I can't do it you can't do it it's against the law it's against this contract and it's not good if you're going to be a discriminatory person and have the realtor name behind you so let's just not do it let's treat others as we want to be treated and let's stay away from any discrimination whatsoever that's going to section 13 section 13 is says its talks about professional counsel this is a pretty easy section to understand this is by our acknowledges that broker is being retained solely as a real estate agent and not as an attorney tax advisor lender appraiser surveyor structural engineer home inspector or the professional service provider buyer agrees to seek professional advice concerning the condition of the property legal tax and other professional service matters okay so let's make this really easy you're being retained to talk to them and advise them on real estate you're not being retained to talk to them advise them on how survey is you're not being there to advise them on how and what type of deed they should do you're not there to talk to them about their taxes okay stay away from that kind of stuff stay in your lane okay you're there to provide professional counsel on real estate related stuff not something outside of your Lane which is exactly what this states it's getting the buyer that across even the buyer asks you what do you think that about the taxes the tax liability on me if I buy this house do not do not refer them to a tax person please other than that let's go into section fourteen mediation six and 14 the mediation clause it says any dispute or claim arising out of or relating to this Agreement the breach of this agreement or the services provided in relation to this agreement shall be submitted to mediation in accordance with the rules and procedures of the dispute resolution system of the National Association of Realtors disputes shall include representations made by buyer or broker and connection with the services to which this Agreement pertains including without limitation allegations of concealment misrepresentation negligence and/or fraud any agreements signed by the parties pursuant to the mediation conference shall be binding the mediation clause shall survive for a period of 120 days after the date of the closing so if there becomes a dispute between the buyer and the agent or broker the National Association of Realtors has set up a mediation services to our local Association to save people from the costly terms of litigation in a regular court of law we have Ombudsman we have people that are mediators here right in our local area I'm sure that you do in your part of the state as well to help mediate now and it does say that any agreements signed by the parties pursuant to the mediation conference shall be binding that means once it's done it's it's done it's binding so you have that option you have that ability to to to handle things in our appropriate manner through your local Association through the state Association and it's all designed by the National Association to make sure that people do not have to go to court over something basically they could be handled through mediators let's go on to section 15 section 15 talks about the sex offender criminal information this is very easy to understand and I'm gonna make a point very clear let's read it first it says buyer agrees that broker is not responsible for obtaining or disclosing information in the South Carolina sex offender registry and no course of action may be brought against the broker for failure to obtain or disclose sex offender or criminal information says the buyer agrees that they have the sole their own they have the sole responsibility to obtain their own sex offender death psychological stigma clandestine laboratory and crime information from sources for example law enforcement private information the web whatever it says the buyer may obtain information about the sex offender registry and persons registered with the registry by contacting the local county sheriff or other appropriate law enforcement officials basically here it is in a nutshell you're not responsible for obtaining it you're not responsible for disclosing it let the buyer do this on their own if you make a mistake and you say that someone in the neighborhood is a sex offender and they are not you will be held liable I highly discourage going down this road let the buyer do this themselves by contacting the proper officials that's going to section 16 section 16 is is the talk about the entire binding agreement says this written instrument including the additional terms and conditions set forth on the reverse expresses the entire agreement and all promises covenants and warranties between the buyer and broker it can be changed only by subsequently by a subsequently written instrument signed by both parties basically it's no different than a regular contract for sale this is a contract between the brokerage and the buyer if it needs to be changed use an addendum use a scratch on initial it can be changed but it's got to be done in writing it can be done in verbal okay so this is a binding a legal binding agreement so that is really not a whole lot to say about that let's go to section 17 which talks about contingencies well section 17 will be really easy to understand because you have blank lines there you write in a contingency and you say well what in the world can a contingency be on a buyer's agency agreement let me just give you a what-if scenario suppose a buyer comes into town from somewhere outside of the state and they're looking to get a job here and they're on a job hunt and they they're here to interview with the company well if you sign up our agency agreement with this person you can actually write a contingency in there that if they do not get this certain job that this contract becomes null and void the buyers agency agreement to be able to be fulfilled is only contingent upon if they get a job when they move here okay that's one I'm sure there's several other ones that you could probably think of that's just one I thought up off the cuff so let's go on to section 18 section 18 is the facsimile another electronic means section and it says the parties agree that this agreement may be communicated by the use of a fax or other secure electronic means including but not limited to electronic mail and the internet and the signatures initials and handwritten or typewritten modifications to any of the foregoing shall be deemed to be valid and binding upon the parties as if the original signatures initials and handwritten or typewritten modifications were present on the documents in the handwriting of each party so basically if you use a fax if you use email if you use a carrier pigeon whatever the case may be it doesn't matter anymore we're in 2020 and there's all sorts of ways to make a document binding once it's signed and initialed so don't worry about the nuances of oh it's got to be blue ink and it's gonna be wet ink and it can only be this type of paper and don't worry about all that sort of stuff we can use fax and anything else to make this a legally binding document as long as its initial sign and data by all parties let's go on to section 19 section 19 is a new section of the buyer's agency agreement because of the age that we're living in it seems like everybody or everywhere you go there's a camera point in your face kind of like the one that's pointing in my face right now there's you're always under surveillance everybody has video camera everybody's got a phone and people are now putting you know next the the the nest doorbell ringers and and video cameras within their home now by federal law you can't put a video camera in a bathroom even in a private residence so just want to let you know about that but who knows there could be people that don't care about federal law and there are ok but it says buyers advise that properties they enter may have both audio and video surveillance broker advises buyer to be aware of the possible surveillance and conduct any and all communications about the potential property off site so this is very self-explanatory if you're walking through a house and you're looking at it you may just want to have your buyer write down notes or write down questions that they want to ask about the property I mean there's certain things you may want to discuss but definitely don't discuss anything about offers or how the house smells or or the type of pictures that are up or family photos or how nasty the carpet may be you don't want to do that kind of stuff anymore too many people can can hear you and see you and so it could really really damage a negotiation if for some reason the seller was able to surveil and see what you were saying and hear what you were saying so just if you want to talk about it if you want to talk about offers and stuff like that let's go outside go to your favorite restaurant talk about the property talk about the offer and then you can talk freely then but don't talk about a debt inside the property whatsoever hope that explains that let's let's let's finish up so the last section here says this is a legally binding agreement buyers shall seek further assistance if the contents are not understood meaning go seek legal advice go talk to the broker in charge of the agents not able to explain it properly the buyer and broker are knowledge is receipt of a copy of this agreement and a copy of the stuff come out of this closure of real estate brokerage relationships form there it is again and the buyer agrees to receive communications from broker at the email address phone and fax number listed below ok so make sure you have proper information especially the telephone number especially the telephone number because if you as the agent something would happen to you the broker needs to pick right up on this we need to we I include myself in that we need to make sure that we can get any agreements that we have in-house and be able to contact that person god forbid something you got sick or we weren't able to get ahold of you so make sure you have all the information available possible and let the buyer sign date and time and then their address and then you sign you sign further company you tell the company name and you put your signature and taking time there on this page very self-explanatory again make sure that you initial the bottom of page four have your buyers initial the bottom of page four there's a whole lot of controversy why should initials be on the same page as a as a signing page you know what I'm not going to get into that I'm not an attorney they did this for a reason so let's just go ahead if you don't have initials there please make sure that you get initials on the contracts and then let's go with my end date disclaimer so again I really appreciate you taking the time to go throughout this but I we call the buyer's agency agreement or they exclusive right to buy a video I thank you for your time as always but let me just stop it in with this remember I've told you multiple times I'm not an attorney I'm only a broker in charge and the South Carolina Association of Realtors does not endorse me doing this whatsoever they have nothing to do with this this is strictly done for agents of Berkshire Hathaway HomeServices Seaton join our realtors to gain a benefit of understanding these contracts now this is obviously going out on YouTube and other people from outside this brokerage are watching this video I understand that and when I said in the beginning of the video you work for another broker please if you have any questions about anything I said please go to your broker and ask them exactly how they want this fill that especially section 5 the compensation section and I have a different opinion than a lot of other people so just get therapy in and how they want you to fo get out also including the retainer fees and service fees there's a lot of things that our brokerage doesn't do that other brokerages may do so again it's not a one-size-fits-all just check with your broker and if it helps you I hope that it has and please leave a comment below and I look forward to seeing you around the real estate corner take care [Music] you [Music]
