Successfully transacting in real estate involves connecting with people, going on showing and listing appointments and, ugh, overcoming a plethora of paperwork. I’ve heard seasoned agents say over and over again, “I’m in the sales business and not the paperwork business.”
We’ve all read articles and heard various speakers and gurus preach about using assistants, transaction coordinators, etc., to help with all of that. There’s merit to those recommendations, and they should be utilized whenever and however is best in an agent’s business.
That being said, they should not be a substitute for understanding how to accurately complete listing and purchase agreements, forms, addendums and amendments on your own.
These are critically important skills for both new and seasoned agents alike but can easily be forgotten in our frenetic climate. We quickly pre-fill out forms and zip them off through an electronic signing platform where the buyer or seller signs and initials along with us.
No one seems to check a thing because we are in a hurry to lock up the sale or secure a listing commitment from a seller, but as the old adage goes, nothing’s a problem until it’s a problem.
Mistakes can be costly. Your buyer’s offer might not get picked. Or you could cause confusion or misunderstandings that blow the deal as it nears closing day.
Here are 19 tips for how to complete real estate documents correctly.
1. Prepare: Review the forms you’ll need to transact what you are doing ahead of time, whether a listing agreement, offer to purchase or an addendum or amendment. Print them out, read them, become familiar with them.
- What fields need to be completed?
- Do you have all the necessary information to do so?
- Do you know what should be checked or left blank?
If you aren’t sure, seek assistance from an experienced agent, mentor or manager. Perhaps they can furnish you with recent examples of the same form from transactions in the office, or you can ask them to review the documents with you before you send them to the client for signature.
Taking the time to carefully review the forms and gather the information required up front will make the rest of the process that much smoother.
2. Agency Disclosures: Agency disclosures are, in most markets, documents that are required to be provided to the buyer or seller in conjunction with a real estate transaction. Some Realtor associations or brokerages include these disclosures as part of their required offer or listing package so they can’t be missed.
If you have not presented these to a buyer at an initial meeting, make sure you have them signed for your file when preparing an offer. The same goes for a listing agreement. Agency disclosures are great tools to discuss the different kinds of representation, what it means and how it affects the buyer or seller.
3. Names: Make sure you have the correct names and spellings of the parties involved before sending documents off for signature. Spelling errors have a way of multiplying. Trying to redo everything may be an arduous task, especially if all required forms are bundled into one package sent off for electronic signature.
If you think you can get clever with modifying documents in, say, Adobe, think again. Most signing programs lock the forms and prevent them from being edited in this way.
The offer process is nerve-wracking enough, so adding unnecessary stress will not instill confidence in your client about you as an agent. Don’t give them a reason to doubt you.
Ask the seller or buyer exactly how they want their names — or in some buyers’ cases, the name of a trust or LLC — to appear on a contract or listing agreement. Ideally, you ask during your preliminary meetings before engaging in a property search so the buyer has time to provide you any documentation.
If you’re representing the buyer and writing an offer, review the tax record and any other documents associated with the property that may have the seller’s name on them. Because tax records may have misspellings or be inaccurate, always confirm with the listing agent how the seller’s information should be written, especially if the title is held in a trust. You don’t want to make a bad first impression on a listing agent with the seller’s name incomplete, incorrect or misspelled.
4. Property address, Legal description, Tax ID or Parcel Number: You never want to make a costly mistake by writing in the wrong property address. Always double-check, particularly the unit numbers or letters if the residence is attached or part of a multi-family structure like a condominium.
The same goes if there is a separate garage or part of a shared garage or carport that comes with the unit. Be sure to reference any assigned parking space numbers as well.
5. The numbers: If you are working with a purchase agreement, make sure you carefully input the purchase price the buyer wants to offer along with the escrow deposit, down payment and loan amount (if applicable). Ensure that all of these items are filled out in the correct spaces and added up correctly.
If the buyer is getting financing, don’t omit the downpayment or leave it for when an accepted offer is being finalized. This is information the listing agent and seller want to know. Also, make sure that the buyer has a pre-approval letter and proof of funds matching what they’re offering.
6. Financing terms: Before sending or showing a buyer property, determine what kind of financing the buyer is planning for. The financing selected on the contract needs to match the type of property the buyer is purchasing.
I see many agents, new and seasoned alike, fail to double-check this information on listings or confirm with listing agents before making showing appointments. Save yourself from writing an offer with financing that a seller is not considering or will not work for the property.
Be particularly mindful of this for condominium complexes, where these errors can have an impact due to owner vs. non-owner occupant ratios, pending litigation or special assessments.
7. Contract Timelines: This may be structured differently depending on the form of contract being used, but it’s critically important to ensure that all timelines match up in the written offer. Agents need to review each timeline to ensure they are consistent with what is required for the transaction and the dates can be met.
Heed this advice for loan application, loan approval, inspections, contingency removals and closing dates. It can be tempting to shorten contract timeframes in today’s super-competitive market, but that can come back to bite the agent and the buyer if, say, financing timelines cannot be met.
Agents can also be careless with making sure the timeline matches the closing date, like suggesting 45 days for financing when the closing date is 30 days away. If there is a reason for a contract timeline that goes beyond default timeframes, be sure to explain that to the listing agent when submitting the offer.
It’s also crucial for agents to ensure that the closing date, or the date during which the period ends, does not fall on a Saturday, Sunday or legal holiday. Most contracts address this and state it will fall on the next business day, but confirm this to avoid confusion.
Picture it: the buyer and seller are loosely paying attention, and then a week before closing, everyone realizes the closing date is on a weekend or holiday when banks are closed. That would be nothing short of a significant issue if the seller was counting on that date, financially, to move into another property.
Lastly, the one timeframe that needs to be treated with the utmost importance is the seller’s response to an offer. This section can be rife with confusion. Given current market conditions, where multiple offers are the norm and not the exception, the listing agent may request a deadline for offers to be submitted.
Don’t write in 24 hours for a response or a date and time that could eliminate your offer from consideration altogether. Some offer forms default to a 24-hour timeframe for an answer, and others may state the offer is good for a certain amount of days.
Always find out from the listing agent what the plan is for the seller to review and respond to offers. This will help you determine how best to address this contract portion.
Be mindful: in a multiple-offer scenario, putting in a deadline may end up backfiring. The buyer needs to be educated to understand that just because they may be coming in with a firm offer, a short timeframe for acceptance by the seller doesn’t ensure compliance, especially if the listing just came on the market or there are open houses over the weekend.
Submitting an offer early on in the process can be both a blessing and a curse, as you just don’t know how a seller will handle it. Some sellers may want to accept and seal the deal, but others may want the process to play out and use the offer price and terms presented as leverage.
We never know what goes on behind the scenes, so it’s vital that you, as the agent, think through various scenarios carefully when contemplating the timeframe for an offer response.
8. Contingencies: With everyone rushing to submit offers at lightning speed, it can be easy to miss boxes that need to be checked concerning contingencies. Slow down and pause on this, and carefully review the contingency options in the contract. These are typically regarding financing, the appraisal, inspections or a home sale.
There may be other specific contingencies required to be written in or referenced with a particular addendum. This could apply to a seller only considering offers contingent on finding a replacement property within a specific timeframe.
Regardless of whatever contingencies are needed, this section must be double-checked for accuracy. The last thing you want to do is submit an offer where you forgot to check the box saying it’s contingent upon the sale and closing of the buyer’s home.
By the time you realize your error, the seller accepted the offer, and now you have to try to renegotiate. A competitive market does not leave a lot of room for these kinds of mistakes.
9. Closing costs and prepaids: This is another area rife for errors and confusion, particularly as a new or inexperienced agent. Which closing costs a buyer or seller pays typically go by the local custom in the specific market the property is located in. They may also depend on whether the property is new construction or a resale.
If in doubt, check with your local title or escrow company or a trusted local lender who can provide some insight. New agents should have a closing cost “cheat sheet” that defines who typically pays for what. Use this “cheat sheet” to ensure you check the appropriate boxes.
Double-check your work when completing this section because in the highly competitive climate we are in, if closing costs are apportioned incorrectly, the listing agent may just assume that is how you intended to structure the offer. With multiple offers being received, they simply don’t have time to play teacher and correct an agent’s work and will probably move on to the next one.
If you ask a seller to pay concessions on behalf of a buyer, make sure your language is concise. If, for example, you write “seller to pay $5,000 towards the buyer’s closing costs,” but the buyer wants a concession to cover monies towards prepaids, that won’t cover it. You need to write “seller to pay up to X amount or percentage towards buyer’s closing costs and/or prepaids.”
In this scenario, the buyer may already pay some of their closing costs but wants to request a seller concession upfront in the negotiation, perhaps because of the property condition. It’s important to state “up to” because the total concession may not add to the total dollar amount or percentage being asked for.
You don’t want to create confusion, with the buyer expecting to get a more significant amount than what it actually ends up being. Obtaining a copy of a buyer’s loan estimate from their lender and reviewing the actual buyer charges (since the lender has to disclose every closing cost paid on this form, regardless of who pays it) is a helpful reference for this.
10. Home warranty: This is another area that can be confusing. If you request that a seller pays for a home warranty at closing, please specify the company you would like the coverage with, the specific kind of plan — most have different levels of coverage — and any additional items you would like covered that are not within the plan.
State “at a price not to exceed X amount.” Do not be generic about a home warranty request and leave it for the listing agent to sort out because if they can’t figure it out, they may simply counter it.
Study your home warranty plans and review the brochures ahead of time. Work with your home warranty representatives or contact the various companies to clarify the available coverage and prices and what it does or does not include, so you request the correct plan.
Be careful about heating and cooling systems; this kind of coverage can vary, so make sure you know what is not included with the various plans offered. There is nothing more frustrating for a new homeowner than moving into a home when it is 100 degrees in the shade, having the HVAC that appeared to function just fine during the inspection not work and then dialing the 1-800 number for the plan that was given at closing only to learn that the coverage is not sufficient for the issue at hand.
We have all encountered a situation where the warranty coverage requested in an offer was not enough, with the selling agent, or both agents, scrambling and chipping in to cover the deficit at, or right before, closing.
It also helps to include the warranty company’s brochure with your offer, so the listing agent doesn’t have to look up this information. Ensure you are referencing a current version as plans frequently change, particularly costs and what is or is not included.
11. Addendums and disclosures: Don’t forget to check all boxes that reference addendums and any disclosures (such as a flood insurance notice, homeowners association and mold) that you are including as part of the offer, as well as any others that need to be written into the offer. All addendums and disclosures need to be completed accurately. Ensure the names of buyers and sellers are spelled correctly, as well as the property address and other details.
12. Seller in possession past closing: Real estate purchase contracts have a section where you have to indicate if the seller will remain in possession or a tenant will stay in the property after closing. Be very mindful of timeframes written in this space.
If the buyer is getting a loan, a lender will typically flag this as an investment property if anything longer than 60 days is written in this section. This could result in a higher interest rate and complicating factors for the buyer with not only their loan but also insurance since they won’t be occupying the property right away.
If there is an agreement between the seller and buyer for the seller to remain in possession longer than 60 days, discuss the best way to document this with the lender and the title or escrow company.
13. Additional terms/conditions section: If additional provisions need to be specified that are not addressed by any form addenda, write them in this section. If the buyer requests the home and carpets be professionally cleaned upon the seller vacating, it needs to be spelled out clearly.
Some Realtor associations have boilerplate clauses within their online form portals for everyday situations if you are unsure of how to word something. Don’t forget to turn to your broker, manager, team leader or mentor for help in these cases.
14. Furniture and personal property items: If any furniture or other items are trading with the property, make sure it is not referenced as part of a purchase agreement as it can trigger sales tax. An underwriter will flag this language, requiring an addendum, stating that these items convey at no value and are being left as a courtesy (or something to that effect).
If there is going to be any furniture included as part of a purchase, make sure it is not referenced as part of a purchase agreement. The same goes for any items the buyer intends to purchase from the seller, such as a gas grill, Green Egg or patio furniture. These should be handled in a separate document, such as a bill of sale between the parties.
15. What stays and what doesn’t: This is one area of the contract that can cause a ton of confusion and end up costing listing and selling agents part of their commission. Make sure you take time to carefully check all boxes indicating what appliances are staying, including the washer and dryer, if the buyer is asking that those convey.
Read the fine print carefully concerning bathroom mirrors, drapes, rods, drapery hardware and TV brackets. Mounted flatscreen televisions, additional refrigerators and freezers in garages, removable sheds or pool safety fences are also items that can be rife for confusion. Smart home devices like video doorbells, cameras and thermostats need to be clarified as well.
Many purchase agreements now address smart home devices, but be sure to write all items in the offer that the buyer wants to stay because you don’t want to incorrectly assume. There may be variations in different markets in how this is addressed and what is included by default. Some sellers would remove every window blind, ceiling fan and light fixture if they were allowed to. People often forget about these details in the excitement of first showings or multiple offers.
The MLS listing should indicate what is staying and any exclusions noted, but also be aware that mistakes happen with inputting information into the MLS. Check with the listing agent before writing the offer and go over what may be staying versus going.
Never assume something is automatically conveying, so when in doubt, write it out. Be specific on makes, models and locations of items, such as X brand refrigerator in the garage. Take photos of the item being requested to convey and include them with your offer to hopefully avoid any confusion.
If specific things are excluded, or the buyer does not want them, please write them in the allotted spaces for exclusions. Don’t skip that section and leave it blank, assuming everyone knows what may or may not be included because memories are short, and agents, sellers and buyers may be confused or forget.
As a side note, it is good to make a checklist of the items that convey (or do not convey) for the buyer and listing agent as soon as the contract is executed to ensure everyone is on the same page. If there are any discrepancies, it is early enough in the transaction process for all to be resolved.
16. Buyer and seller information, names, signatures, etc.: Ensure all the spaces are completed on the purchase offer concerning all parties’ names, addresses, etc. and that the buyer information is filled out in the correct place, as is seller information. It can be easy to accidentally have a buyer electronically sign where a seller should sign if they are rushing through electronic signature placement.
17. Agent information and signatures: The same goes for agent information. Be thorough and accurate and take time to complete this section carefully.
You can typically pull up your and your broker’s license information, as well as that of the listing agent and their brokerage, in MLS. It’s essential to know your real estate license number and your broker’s as that information is always asked for.
It’s helpful to write this down for handy reference, so you don’t have to keep looking it up. The more offers you write, the more likely you will memorize it. Don’t leave this blank or partially filled out for later.
18. Listing agreements: Listing agreements must be completed with great care, taking into account a lot of what has been mentioned above concerning the correct names of the seller, trust or other legal entity, and accuracy with respect to the address, legal description and price. If the property has a unit number or letter (or combination thereof) associated with it, agents must pay close attention to ensure they are selling the right property.
If the unit comes with a detached garage or assigned parking space(s), make sure to include these on the listing agreement as well. I have encountered some condominium complexes where a garage came with the unit but had a separate parcel number and legal description. The complex had allowed garages to be sold separately at one point.
When it comes to condominiums or other attached properties, ask the seller for details about any garage or parking spaces and double-check with the homeowners association if one exists.
The agent also needs to understand the mechanics of listing agreement effective dates. They relate to when a listing must be entered into the MLS per their local policies and when showings must begin based on the date entered into the MLS.
The agent also must use care concerning listing expiration dates. The items that the seller wishes to include and/or exclude must also be carefully completed.
The agent needs to review the financing terms with the seller and confirm what they are willing to consider. Diligence needs to be used not to blanket check all the financing options. In some cases, the property condition will not allow certain kinds of financing or any financing at all, or the property is a condominium that has pending litigation or significant assessments that would eliminate certain types of financing from consideration.
If there are specific terms or conditions that the seller wants as part of the listing, those need to be added. That could include whether the listing is contingent upon the seller finding a replacement property or if the seller needs to occupy the property up to a specific date past closing.
Reviewing the information needed ahead of time will allow you to be better prepared. If the listing agreement asks for specifics, for example, about a homeowner association or other fees and contact information, trying to figure that out when rushing to prepare a listing agreement for signature can be very stressful and cause you to make mistakes or have incomplete or inaccurate information.
Last but certainly not least, make sure you input the correct amount of the commission being charged, along with how it is intended to be split with the cooperating brokerage that brings the buyer. Commission can get a bit more involved depending on the seller and the scenario, so if there are dual/variable commission arrangements, that also needs to be clearly spelled out.
It is best to provide a copy of the listing agreement to the title or escrow company when submitting a file for closing. Suppose commission arrangements are modified during the transaction. In that case, it is critically important to get the appropriate amendment or other documentation with this change signed by all parties and send it to the title or escrow company.
If you charge a fee for document file, storage and processing – which may be referred to as a “transaction fee” or “escrow facilitation fee” — make sure you have that referenced in the listing agreement. If a disclosure document has to be provided explaining what that charge is for, ensure you have that signed by the seller. As a side note, this disclosure form also needs to be delivered to a buyer if they are paying a similar fee.
When preparing a price or status change document for a listing, you will always need to reference the effective date. Make sure to have that information easily accessible for reference.
19. Amendments and addendums: Things may change during a real estate transaction and often do. The timeframe for the buyer and seller to agree on repairs may need to be extended. Agents must familiarize themselves with the appropriate forms used by their state or local Realtor association to handle these situations.
When completing an amendment or addendum, make sure the effective date of the purchase agreement is referenced and that all changes are being spelled out clearly. The buyer’s lender and the title or escrow company handling the transaction will need a copy.
Real estate markets may wax and wane, but the one constant that remains is the necessity of having a solid grasp on all required forms and how to complete them accurately, efficiently and strategically. Practice makes perfect, so it is best to practice with a family member or friend posing as a buyer or seller so you can complete offers and listing agreements with confidence.
With extremely low inventory and real estate markets across the country experiencing more competition than ever, buyers need every tool at their disposal to solidify their chance at securing the winning offer. Having an agent that knows how to write and present a comprehensive and complete offer package is a huge asset — and a skill the consumer should not assume that every agent has.
Unfortunately, most buyers are unaware of how sloppy the offer written on their behalf really is. No wonder they aren’t having success with getting their offer accepted. On the listing side, a poorly written agreement can cost an agent a slice of their commission or the listing entirely.
Taking the time to perfect these skills will demonstrate your value to your clients each and every time. Although you may not win every offer, the buyers you represent will be sure to take notice of your airtight approach to writing contracts.
Sellers will be sure to appreciate that you took the time to be thorough and troubleshoot all details and information on the front end, which will result in a smooth transaction on the back end. Additionally, agents in your marketplace will grow to admire and respect your work ethic and thoroughness and will be eager to work with you.
Who knows, it may help you secure a winning offer in a highly competitive situation for your buyers.