Potential seller didn't trust contract

6 Replies

I live in Michigan and found an absentee owned house. The wife was MOTIVATED to sell but the husband didn't trust the contract. I downloaded the contract from the FilePlace here at BP. The deal fell off because of this. Has anyone had this issue? Should I use a standard PA or just assume the seller isn't really motivated and move on to the finding the next deal? 

@Michael Thomas  You're asking the wrong people that question.  The only one that can answer it is your seller...and the best way to get that answer is by making the offer again using a standard contract...with any additions specific to this deal.  If they still say no, then they are either probably not as motivated as you suspect, or they just don't like the offer.

Either way, if you don't ask them the question at all, you have an answer.

Joe Villeneuve
REcapSystem
A2REIC

Joe's right. Use a standard contract for your area and either sit down with them and delete things that don't apply or use addendums to modify what you agree to.

Folks new to RE need to get standard contracts used in their area and read them carefully. Think about what goes on within each paragraph and about why such requirements are used, why they are the standard arrangement. These are the set standards customary in your area.

When you get your junk guru contracts off the internet written by who the heck knows, compare it to the standard and customary way of doing things in your area.

Biggest reason that I see that new investors try to find contracts and exit contingencies to use is that they are scared and don't know what they are doing, they want a way to jump ship if things go bad and they want to walk away without any consequences. Well, the world doesn't work that way in reality.

You use some off the wall junk contract that liens so far to the buyer or seller's benefit it's likely to be thrown out by some judge, the dealing in good faith within the parameters of customary practice.

Some contracts aren't standardized, like a lease-option, I've seen such contracts that are written with a flare of legalize, copied from other contracts blended with some strategy and the contract doesn't even use complete sentences. And some coach type is using such contracts in their "instructional" program.

Bottom line, if you attempt to use hooky contracts, have a local attorney review it before you use it and ask them to review the contract for CONTENT and FORM. You don't just want to know if what your propose is legal but is it customarily accepted to be enforced!

I realize folks are buying through the internet and odd relationships, but if I'm making an offer it will be present and explained and if I can't present the contract I go over it on the phone. I can send a buyer or seller a blank contract or filled in at some parts leaving the price off of it, the first things to do is have a meeting of the minds as to terms and conditions, then we can negotiate price. This exercise builds trust between the parties,

Good luck. :)   

@Bill Gulley  Well said.  We will occasionally use a customized contract, but it's one that is specific to the offer, and only for lease option purposes.

For straight purchase offers, we just use the standard PA our agent fills out with our standard instructions:

*     Offer Price
* EMD
*     Inspection Period
*     Days to Close Period

The only "risk Control" you should need to get out of the contract is the inspection period.  7 - 10 days.  If you start adding all kinds of contingencies to the contract, the seller is going to look at that as you looking for a way out and just won't accept it.

Joe Villeneuve
REcapSystem
A2REIC

@Joe Villeneuve  @Bill Gulley  Thanks guys. I will move to a more standardized PA. One thing I want to do is build trust. That was my main concern with the potential seller's response. I have access to the standard forms but I wanted to make sure my "out" clauses were in place. Thanks again for the insight. 

Originally posted by @Michael Thomas:

@Joe Villeneuve  @Bill Gulley  Thanks guys. I will move to a more standardized PA. One thing I want to do is build trust. That was my main concern with the potential seller's response. I have access to the standard forms but I wanted to make sure my "out" clauses were in place. Thanks again for the insight. 

 Maybe you ought to read their responses again, if you are still looking for your "out" clauses.

Most homeowners are going to be suspicious (and are entirely right to be suspicious) of a contract that is weighted unfairly toward you.

@Richard C.  Thanks for responding. No need to read their responses again. There points were well taken. My comment was based on my mindset going in to the deal as opposed to now. Thanks again for taking the time to respond. 

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