Posted by: Daryl & Wendy Ashby | September 21, 2012

The Number of Pages Just Keep Increasing

Back in the dark ages when I started marketing Real Estate, we required only two pages to complete a Purchase and Sale Agreement; at recent count, it is now nine and growing by a new one every year.

It’s hard to say with certainty why this phenomina is happening. The Real Estate lawyers say it’s because Buyer’s and Seller’s are becoming more sophisticated, while the Real Estate Agents figure it’s because the lawyers are looking for more ways to pad their pockets and pray on a naive population of Real Estate Councils who look for new and inventive ways to drive the industry wild.

A few years back we were told to use the new form “Property Condition Disclosure Statement” or we would find ourselves in how water with our local Real Estate Board and receive a heavy fine or worse yet; we’d have our licenses and therefore our source of employment terminated. Fear gripped every Agents heart and mine as well (though I balked at it every chance I had).

Out there we went to our client base and attempted to explain this new form and how it was going to help them avoid pitfalls in future transactions. “By you declaring to the buyer populace everything you know about your home, you will be infusing a sense of comfort that your home is worthy of their consideration.”

What the system didn’t tell us, is that once the Seller’s filled this two page form out and signed it, they just waived a mammoth portion of their ability to defend themselves if a complaint about their home or their actions as a Seller, were ever filed in a court of law. Unbeknownst to us their trusted Agents, we had just sold them down the river without a paddle.

And along came the suits, one after another, 200 alone in Ontario last year. And for every suit against a Seller, there was an equal attack against their Real Estate Agent, “who should have known”.

A year or so later, another form rose up out of the bowels of the local Real Estate Council. This one was called the “Latent Defect Form” and again we were told we not only had to have our Seller’s sign it, but we had to sign it ourselves, making us equally responsible for any misinformation or the lack of information about a given property.

In a nutshell, “Latent Defect” is that which is not readily apparent to the naked eye, but is or should be known by the Seller and therefore their Agent. It could be the possibility that the home might under unusual circumstances, be swept away with the onslaught of a 100 year rain or something as simple as a landscaping sprinkler head which may have been installed wrong (but the Seller’s are not certain) and will pop off and flood the Master Bedroom through an open window while the new owners are sunning themselves in Hawaii.

There was also the requirement that we as Agents dig into the inner reaches of each Seller to discern if there is some little known “Stigma” concerning their home, like it may be haunted, or there was a death in the home, it was a crime scene, a house of ill-repute.

There is no doubt some of these happenings are valid concerns for a Buyer, but the bottom line is; the pendulum has swung too far to the right when it comes to disclosure and the need for added forms. In the opinion of many, we now offer Buyer’s and Seller’s an incentive to head for the courts where in the past they may have just dealt with an issue much like we all would have 20 years ago.

From one who knows; “there are just too many “cover your butt” pages and I can see more on the horizon”.

Remember; this is one man’s opinion

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