Putting Clients at Ease (Just Not Too Much)
My guess is, if you’ve worked with a Realtor (or any salesperson) lately, what you were ultimately asked to sign wasn’t referred to as a “legal contract.”
It was called “paperwork” (sample agent-to-client dialogue: “if you’re comfortable with everything we discussed, let’s get the paperwork taken care of, OK?”).
Wanna guess why the euphemism?
“Contract” sounds intimidating to many people; “paperwork” doesn’t.
Doc’s, Doc’s & (Still) More Doc’s
In fact, at least in residential real estate as practiced in Minnesota, there are six different kinds of documents that Buyers and Sellers are asked to sign by their agent: 1) state-mandated acknowledgements (example: “Agency Relationships”); 2) Seller property disclosures (acknowledged by Buyer); 3) the contract to hire a Buyer’s agent or Listing Agent (representing the Seller); 4) Broker disclosures (example: related parties); 5) the Purchase Agreement and Addenda; and 6) the closing or settlement statement.
Buyers who are getting a mortgage will have to sign a raft of additional doc’s required by their lender.
While the foregoing can understandably feel like a barrage to clients, only two of the six categories (#3. and #5.) are technically contracts.
Ounce of Prevention vs. . .
Regardless of terminology, what’s important is that the client understand what they’re signing.
Especially these days, when signatures are (too) easily done electronically.
All of which means that it’s incumbent upon the salesperson to define key terms and explain their significance to their client’s satisfaction.
P.S.: In my experience, agents who skip the relatively small investment of time explaining contracts paperwork upfront front risk having to spend much more time later on trying to untangle things . . .
See also, “Football, Baseball, and Real Estate Metaphors“; and “What’s in a Name? From ‘Settlement Statement’ to ‘HUD-1’ to ‘ALTA’ Back to ‘Settlement Statement.'”
