Many real estate licensees erroneously believe they must use forms published by a trade union, such as the California Association of Realtors (CAR). But remember, the Bureau of Real Estate (BRE) warns licensees to fulfill your fiduciary duty to your sellers by presenting all offers received, regardless of the form used to write up the offer.
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It is a reportable offense for a seller’s agent to fail to submit all offers, a tactic buyer’s agents have learned to use. As succinctly stated in the real estate digest, Miller and Starr Third Edition, “The [seller’s] broker must disclose to his principal-seller all offers that have been made by any person, whether the offer is only oral or in writing, and even though the seller has accepted another offer.” [Miller and Starr §3:27]
Thus, offers do not need to be written on so-called “standard” forms to be valid. As a matter of fact, there is no standard form for use in California. You may use any form you choose in our inventive and open marketplace. Not so in more restrictive states. Other brokers, associations, and the multiple listing services may not and do not require a broker to use a particular form. A broker may limit his employed agents to the use of a particular form when preparing an offer – but never in the submission of offers received from other brokers.
Unlike the forms improperly monopolizing the industry today, first tuesday forms are deliberately engineered to be simple. It is a difficult task to eliminate weight. first tuesday forms eliminate the redundant language which clutters other forms. The result is a concise, complete presentation, allowing you to focus on your sales, rather than wade through jargon. Less has become more, as is better for everyone.
Better yet, first tuesday’s Purchase Agreement (One-to-Four Residential Units – Conventional and Carryback Financing) was drafted to provide maximum loss reduction protection, as well as fee protection, for brokers and their agents. As a matter of good policy, our purchase agreement does not contain clauses which increase the risk of litigation or work against the best interests of the buyer, seller, agent and broker.
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Also, since the buyer is making the offer to the seller, first tuesday’s purchase agreement is designed with the buyer in mind. Thus, the form does not automatically favor the seller in every provision as do the seller-biased “standard” forms.
Provisions deliberately excluded from the first tuesday forms as risk mitigation policy include:
- the attorney fee provision, which promotes litigation and inhibits resolution;
- the time-essence clause, since future performance (closing) dates are estimates by the broker and his agents of the time needed to close and are improperly used by sellers in rising markets to obstruct or cancel the transaction before the buyer or broker can comply with the terms of the contract;
- the liquidated damages provision, since it creates wrongful expectations of windfall profits for sellers, and is unenforceable; and
- the arbitration provision, since arbitration decisions are final and unappealable, without any judicial oversight to assure the arbitrator’s award will be fair or correct.
first tuesday’s purchase agreement includes a mandatory mediation provision to mitigate the risk of a legal battle. Mediation of any dispute must be undertaken as a precursor to filing an action, be it arbitration or litigation. Mediation is a quick process and is the most cost effective method of dispute resolution society has developed.
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Form-of-the-Week: Purchase agreements – they’re the buyer’s 0ffer
When faced with an uninformed seller’s agent who refuses to review and submit an offer prepared on non-trade union forms, you need to insist that a counteroffer or formal rejection of the offer is signed by the seller and returned. Recalcitrant agents need only be reminded that the avuncular nudge of the BRE is but a phone call away.
Below is the definition of a Trade Union, I don’t think CAR fits the definition, it is more an Association than a Union. Interesting points in your article at any rate.
http://legal-dictionary.thefreedictionary.com/Trade+Union
An organization of workers in the same skilled occupation or related skilled occupations who act together to secure for all members favorable wages, hours, and other working conditions.
Trade unions in the United States were first organized in the early nineteenth century. The main purpose of a trade union is to collectively bargain with employers for wages, hours, and working conditions. Until the 1930s trade unions were at a severe disadvantage with management, mainly because few laws recognized the right of workers to organize. With the passage of the National Labor Relations Act (Wagner Act) of 1935 (29 U.S.C.A. § 151 et seq.), the right of employees to form, join, or aid labor unions was recognized by the federal government.
Trade unions are entitled to conduct a strike against employers. A strike is usually the last resort of a trade union, but when negotiations have reached an impasse, a strike may be the only bargaining tool left for employees.
There are two principal types of trade unions: craft unions and industrial unions. Craft unions are composed of workers performing a specific trade, such as electricians, carpenters, plumbers, or printers. Industrial union workers include all workers in a specific industry, no matter what their trade, such as automobile or steel workers. In the United States, craft and industrial unions were represented by different national labor organizations until 1955. The craft unions that dominated the american federation of labor (AFL) opposed organizing industrial workers.
During the 1930s several AFL unions seeking a national organization of industrial workers formed the Committee for Industrial Organization (CIO). The CIO aggressively organized millions of industrial workers who labored in automobile, steel, and rubber plants. In 1938 the AFL expelled the unions that had formed the CIO. The CIO then formed its own organization and changed its name to Congress of Industrial Organizations. In 1955 the AFL and CIO merged into a single organization, the AFL-CIO.
Membership in U.S. trade unions has fallen since the 1950s, as the number of workers in the manufacturing sector of the U.S. economy has steadily declined. Union membership in 1995 comprised just 14.9 percent of the workforce, compared with a high of 34.7 percent in 1954.
Interesting, never gave it much thought. 15 years in the business and have yet to receive an offer on a non CAR form. It makes total sense though. Any issues of concern to the seller not covered in the non CAR form, can simply be addressed in a counter offer to the buyer. If both parties thus agree, then off to close the deal.