REALTORS® shall ensure that agreements regarding real estate transactions are in writing in clear and understandable language, expressing the specific terms, conditions, obligations and commitments of the parties to the agreement. A copy of each final agreement shall be furnished to each party upon their signing or initialling, and shall be dealt with in accordance with the instructions of the parties involved.
Click here to read the Interpretations of Article 6.
To avoid mistakes and misunderstandings and to prevent future problems, contractual agreements must be in writing and should set out in detail the understanding of each of the parties. Being clear about whether the washer and dryer are included and whether the buyer has to get financing saves a lot of time and trouble. It also clears up questions about the terms of listing agreements, offers to purchase, counteroffers, and other commitments such as extensions or amendments to contracts.
One scenario that comes to mind is that of a buyer writing a term into a purchase contract that the carpets are to be cleaned before possession. Is this clear language? What is the definition of clean? Upon possession day the buyers begin moving their belongings into their new home.
They notice that the carpet is filthy.
What do they do? They call up their REALTOR® and are very angry that the carpets have not been cleaned. The REALTOR® contacts the listing REALTOR® and is told that the previous owner vacuumed the house top to bottom. Next thing you know RAE Staff are getting a formal complaint under Article 6 of the REALTOR® Code. Not only that, but the buyer has filed a formal complaint at RECA.
Before the contract is signed, REALTORS® should take the time to review with their client, the contract, its standard wording, and any additional clauses that have been added. This reduces the chance that the client will say, “I didn’t know what I was signing.” REALTORS® should ask themselves if they could explain the meaning of each clause contained within the contract of purchase and sale (or any document they ask clients to sign.) If they are unable to explain the contract content, they should ask their managing broker for help.
