Whether you are buying or selling you and your realtor will be signing some type of a contract. If you are selling, it will be a listing agreement. If you are buying it is an agreement of purchase and sale along with a buyer representation form. The challenge for many people is there are a lot of legal terms and obligations that are laid out in these forms that you must know and understand. Below are some words and phrases that are explained in layman’s terms to assist you in your understanding of these terms. This is not meant to be used as legal advice as you should always employ a real estate lawyer during your transactions, rather it is just meant to educate and help you better understand what you are signing.
1. Irrevocable date
This term is used in the agreement of purchase and sale. This is the date where an offer must be either accepted or countered. The offer cannot be withdrawn or taken back until the date and time expires on the irrevocable date. If a seller does not respond by the irrevocable date and time, then the offer is no longer valid and if a deposit was submitted with the offer it must be returned tp the buyer without deduction. If the seller responds to the buyer by way of a counter offer, then a new irrevocable date is determined by the seller as it is now his/her offer back to the buyer. The buyer now must respond prior to the irrevocable date and time or the offer is no longer in effect.
2. Requisition Date
This is the date that your lawyer must have done a title search on the property you are buying. Lawyers do this to ensure that there are no outstanding liens or work orders against the property. If the property is free and clear then the deal can proceed and close as expected, usually about 10 days later. The reason this date is approximately 10 days before the closing date is if something is discovered, it can give the seller time to rectify the lien so the deal can close on time.
3. Multiple representation
Most people believe that a multiple representation occurs when the agent represents both the buyer and the seller. This is partially correct. When you have an agent represent you to sell or buy a home, your agreement is actually with the brokerage the agent works for, not the agent specifically. So a multiple representation can occur with two different agents working for the same brokerage. When a multiple representation occurs both sides of the deal must agree to allowing this to occur. When this happens the listing brokerage must be impartial and equally represent the buyer and the seller’s interests. The listing brokerage has a duty of full disclosure to both the seller and the buyer and must disclose all factual information about the property. The listing brokerage however
a) will not disclose buyer or seller motivation
b) the fact that a seller may sell for less or
c) the purchaser may pay more
4. Chattels
A chattel is anything in your home that could be removed as it is not permanently attached.
i.e. appliances, window coverings, mirrors, artwork, furniture etc
5. Fixtures
A fixture is anything that is permanently attached to the house. Things like ceiling lights cupboards, medicine cabinets if attached to the wall.
Bottom line if you are selling your house and a family heirloom such as a chandelier for example is not to be sold with the house, then be sure to list it as an exclusion.