If a person is a licensed salesperson, but they assign contracts on the side between listings, assuming they perform everything legally and with full knowledge of their employing broker and everyone is good with everything, since that person is licensed, are they required to use a state purchase contract or can they use their own contract they made (that has been reviewed by an attorney and is within all legal boundaries)?
@Steven Fitzen I was actually wondering the same thing just this last week.
I feel it's better to use your state's contract and just make the necessary revisions to hold to your profession's standards, but at the same time my one page contract just makes things so much easier on the seller to read through.
Looking forward to hearing other's replies.
A Realtor has to use the Realtor contract when they are representing a buyer or seller and acting as a Realtor. There's no requirement when acting as their own investor, on non listed properties.
Not sure about Hawaii, but in the states I'm licensed in, there is no legal requirement to use a "state contract". In most states, those contracts are provided by the state board of Realtors for their members and agents who aren't Realtors, aren't even supposed to use them unless they purchase them from the association. Our state governments don't provide or endorse the contracts. In Massachusetts, I have two sets of standard contracts I can use -- one set provided by the Mass. Association of Realtors and one from the local board I belong to, the Greater Boston Real Estate Board, each having pros and cons. Brokers who are Realtors can dictate what contracts to use and E&O insurance companies generally prefer the standard contracts be used.
I would suggest looking at what your E&O insurance requires. Some require you only use state approved contracts.
I have always used State contracts or local board contracts when acting in Realtor capacity. When acting as an investor I utilize standard contracts with my own addendums including one disclosing I am a licensed agent purchasing for my own account.
I'm also here on Oahu, Steven. I'm strictly an investor -- not realtor -- but I don't see why you would have to use the state contract. That being said, if you're unsure then I don't know of any reason why you wouldn't use it. The top of the contract basically includes language stating that it is for the general use of the real estate industry. Better to be safe than sorry, I suppose. However, if a wholesaler brings me a deal, I don't care whether it's on the state contract or not, as long as the contract language itself is acceptable.
Michael Borger, Oahu Home Buyers | (808) 377‑4379 | http://www.oahuhomebuyers.com
First allow me to thank you all for the information you provided. In regards to the E&O insurance, that only pertains to transactions performed within a Realtor capacity, correct? If I disclosed that I was an agent purchasing for my own financial benefit and that I was receiving no commission and whatever other legal disclosures were needed, I should, theoretically, be able to use my own summarized contract provided it contains all the necessary information. Let me conclude with that I understand none of the information given here is legal advice haha, I'm waiting for the post telling me to consult an attorney.
Good point @Phil Glantz on the E & O!
@Steven Fitzen "or can they use their own contract they made (that has been reviewed by an attorney and is within all legal boundaries)?"
It's always cheaper to have an Attorney review the Contract than save you from it!
We had an Attorney, just North of Boston, go through the Condo Conversion process at our last meeting. Many savvy investors had a Private Consultation with him since then, to determine When and Why to see him again.
@Wayne Brooks was correct (at least that's the way it works in Texas, my state)
I would probably use the states contract and then just add an addendum to that contract I'm not sure on that but I would love to get more information on this I'm in South Carolina
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