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Real Estate contracts 301

The leadership at the Incline Village Board of Realtors recently approved a new version of the standard purchase agreement that is used by brokers and agents in Incline Village and Crystal Bay. This project was spear-headed by Pam Fernandez and Karen Bruno with the support and assistance of many other members of the local real estate community. The result is a new contract that is shorter, more user-friendly and better organized to meet the needs of buyers, sellers and their agents.

Preeminent among the revisions to the purchase agreement is the dramatic improvement in the way that the new document is formatted. Important topics such as the selection of and responsibility for payment of inspections have been consolidated onto one page and made much easier to read and answer. Language that was found in the previous purchase agreement and then duplicated but in modified form on various disclosure documents has been cleaned up and made uniform.

Another very significant change is the creation of the Incline Village – Crystal Bay / Regional Disclosures form. This five-page document replaces approximately 16 pages of separate disclosure forms that had become extremely unwieldy and cumbersome for buyers and sellers to execute. By combining a large number of separate disclosure documents into this one easy-to-read form it will be much simpler to maintain administrative records for each transaction. It will dramatically reduce the volume of paperwork and the parties to a transaction will only have to sign one blanket disclosure form instead of more than a dozen different documents that were not consistently formatted.

Even with all these changes some individual brokerage firms will still be retaining their own disclosure documents as part of their overall risk reduction strategy. When buyers and sellers are fully informed about the various risks pertaining to a real estate transaction it provides an extra layer of comfort and security for brokers and the various insurance companies who provide errors and omissions coverage. While some people bemoan this additional amount of paperwork, it is better that everyone involved with a real estate transaction fully understands the nature of the deal and the risks involved.

It would have been nice if all of these new documents were created as fillable PDF’s for the convenience of buyers, sellers and agents. However that is not the case and it will be up to each brokerage firm to decide if they wish to utilize the online versions of these forms that will be provided in the near future or purchase the software needed to create fillable PDFs in-house. The advantage of having fillable PDFs instead of utilizing the online versions is not only a dramatic cost savings for the membership but also it will eliminate the need for anyone to use Docusign or any other cloud-based document signing service.

There are several reasons for not wanting to use Docusign or any other Internet-based service that allows buyers, sellers and agents to execute contracts, counter offers and disclosure forms. First of all, you are transmitting your documents to a company that is warehousing on their servers a lot of personal and confidential information. This information could be used for data mining in a way that is of no benefit to the parties to a transaction and could potentially expose them to unwanted solicitations in the future. Also, using fillable PDFs is a far more efficient and less cumbersome way for buyers and sellers to initial and sign all of the documents associated with a real estate purchase contract.

Buyers, sellers, brokers, agents, lenders and title company staff will need to familiarize themselves with the revised IVBOR purchase agreement and blanket disclosure form. Unlike many items on the supermarket shelves that say “new and improved”, the revised purchase agreement and five page disclosure form really are a positive step forward and a significant improvement that will make it easier and more efficient to conduct the sale and purchase of real estate in Incline Village and Crystal Bay.

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