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Mark guaranty agreement template
hi I'm Annie Fitzsimmons I'm your Washington Realtors Legal Hotline lawyer and today's video is another from our Legal Hotline mailbag and this question is fairly complicated so I'm going to tell you about it instead of reading it to you in this transaction the buyer is purchasing property from an investor landlord and the buyer asks the question through the brokers of course the communications are going through the brokers the buyer asks the question did the prior tenant die in the house somehow or another they had reason to believe that but the prior tenant had died in the house and the listing brokers response was very slow and coming back and the listing broker gave the impression that they were withholding the answer finally the answer did come back that yes the the prior tenant had died in the house by this point in time the buyer is upset and we don't know anymore the facts as to why except that the buyer is upset with the listing broker for taking so long and appearing to be evasive and arriving at that answer and so the buyer but the buyer decides that the buyer is going to terminate the purchase and sale agreement using the buyer's inspection contingency marks the box on the form 35 R to terminate the agreement earnest money will be refunded to the buyer signs it buyer Brooke or timely delivers that form 35 are back to the listing firm and on the form 35 are the buyer broker rights I don't know if it's own buyers behalf or of their own volition but the buyer broker rights buyer is terminating the purchase and sale agreement because listing brokers answers were evasive or something along those lines that buyer buyer was unhappy with the listing brokers performance in this in this transaction and that's why the buyer was terminating so that goes over to the listing firm listing firm is unhappy of course listing firm designated broker calls buyer brokers firm and says we're not presenting this form 35 are to the seller in fact we're rejecting it because we're not going to present this form 35 are with this derogatory language about the listing broker the buyers firms designate broker intercepts this caller gets this call back and says let me look at the form 35 are I'll get back to you sure enough the designated broker is also unhappy with the the forum 35-hour was written and assures the listing firms designate a broker that that there's a good agreement by the two designated brokers the forum shouldn't have been written written this way and it shouldn't be presented to the seller and and in fact the buyer brokers designated broker says just withhold that form 35-hour don't move forward with it because I'm pretty sure that when cooler heads prevail buyers gonna want to buy this house anyhow so there's some discussion maybe even agreement along those lines now fast-forward to two days later and sure enough buyer does want to proceed with the purchase of the property and so the designated broker gets back in touch with the listing firms designated broker and says yep just ignore that 435 our buyer wants to close a transaction listing firms DB is now concerned because there is this seemingly bad blood between the two brokers and maybe the buyer the listing broker and so there's some hemming and hawing on the listing firm side and then sure enough the next day the forum 35 art comes back from the listing for signed by the seller delivered to the buyer brokers firm and so the question of course from the buyer brokers firm is could they do that is this transaction really terminated doesn't the buyer have the right to proceed we withdrew the forum 35 are all of those questions if you want to think about this question or discuss it in your firm before I give you my answer push the pause button this question gives us so many things to discuss and so many learning opportunities so let's get going with respect to the form 35 our and the delivery of the notice of termination I want you to think about the impact on the transaction when a buyer marks the box on form 35 our that says the transaction is terminated the earnest money will be refunded to buyer and timely delivers that form that signed form 35 are to the listing broker what is the effect of the delivery of that notice the effect is that the transaction is terminated it's gone no longer exists the buyer effectively terminated this transaction by timely delivering that signed notice there's nothing that buyer can do at this point to hang on to the transaction it's already terminated there's nothing seller can do at this point to hang on to the transaction it's already terminated unless the two parties want to come together and revive the purchase and sale agreement but if they don't come together and revive the purchase and sale agreement the transaction is dead with that said does the listing firm have any ability to reject the form 35 our or to choose not to present it to the seller and the answer is of course not in fact the listing broker is bound by the agency law in the agency law makes very clear that every broker must timely deliver all written offers and other written communications to and from the parties this notice of termination pursuant to the inspection contingency is a written communication from buyer to seller terminating the transaction listing firm has no option to withhold or reject that form 35 our listing firms only option no discretion allowed only option is to timely deliver that notice to the seller and the seller needs this information because the seller needs to know that their transaction has been terminated they need to move on to another buyer or move on to marketing the property again what about the way in which the foreign 35 art was filled out if buyer terminates the agreement should by your broker identify the reason buyers terminating answer absolutely not there's not even a space on the form 35 are to do that why buyer wants to terminate wholly irrelevant buyer can terminate for any reason or no reason at all as long as by your timely terminates based on the inspection contingency so buyer brokers you shouldn't be giving a reason why buyers terminating even if the reason is related to some condition of the property you shouldn't be giving a reason why the buyers terminating buyers either in or out if they're out have them signed the the form 35 are terminating the agreement timely deliver it and what the buyer move on to let the seller move on all of that leads to a more fundamental question and that is what really happened in this situation because we had a seller who wanted to sell the property to this buyer they entered an agreement we had a buyer who wanted to purchase the property not only at the time they reach a mutual acceptance but then two days later after they terminated they still really didn't want to buy the property so how did we get to the moment where we had this passionate expression by the buyer or the buyers broker that led to the unfortunate termination of this agreement I don't know what happened none of us know what happened but here's what I'm betting happened I'm betting that when the listing broker didn't deliver an immediate response to this question the buyer broker and the buyer put their heads together and decided that there was something wrong with this listing broker or that there was anger that should be directed towards this listing broker brokers you set the tone in a transaction this buyer broker could have just as easily helped the buyer to understand that maybe this listing broker didn't know the answer to the question and had to talk to the to the Celer landlord find out what happened with the prior tenant may be the the listing broker was proceeding in good faith maybe their communication came out awkwardly maybe they are having a bad communication day or maybe the listing broker was being evasive maybe the listing broker didn't want to communicate the information and didn't know how to deliver bad news I don't know but by your broker what's the tone that you set with your buyer with respect to this this happening if you get together with your buyer and say oh that dirty rotten scoundrel of a listing broker what impression is the buyer gonna have of the listing broker and if you carry that out to the seller what impression is the buyer gonna have of the seller remember that our industry I mean before I get off of that listing broker we don't know what happened behind the scenes of the listing broker was listing broker in fact trying to be evasive if so listing brokers if you have bad news about a property that is likely to have to be delivered at some point figure out how you're gonna deliver that news so that you're not caught unawares when the question is asked because the questions likely to be asked you don't want to appear evasive nobody wants to be working with a broker on the other side of the transaction that they can't trust so brokers remember that our industry is based on cooperating brokers that's why we have cooperating office compensation it's not an industry built on adversarial brokers as an industry we need to figure out how to set a tone in a transaction that leads to the objective of both parties and the objective of parties when they enter a contract is to reach closing table and the tone that you as a broker set in a transaction to work with the broker on the other side of the transaction and the party on the other side of the transaction in many many cases will dictate whether or not you ever get to the closing table and if you do the feelings between the parties at the time they get to the closing table and parties that get to the closing table in a cooperative manner or far more likely to move forward after closing avoiding closing litigation brokers take the opportunity in every transaction to trust the broker on the other side until they prove themselves untrustworthy to think the best of the broker on the other side until you have to take defensive actions on behalf of your client do your best to cooperate return phone calls return text messages return emails supply information that's asked it might not only be buyer asking questions about the seller but may be the seller asking questions about the buyers financial status or the the status of their loan when you're asked questions get the information back to the broker on the other side of the transaction that's how you cooperate that's how you set a quality tone in a transaction and and when you have something to say about the broker on the other side of the transaction be careful of the words and the tone that you use because you might create a transaction that either succeeds or fails based on the tone that you set okay that's the end of my soapbox thank you for being a Washington Realtors member if you have questions on this topic or any other please send an email to me Legal Hotline at waa realtor.org thank you you
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