Read everything you sign

Read everything you sign

 

We’re doing a property right now that has a propane furnace, so we went to see Ms. Sue over at Calhoun LP Gas. She got me taken care of and scheduled their guys to bring me a tank the following week, weather permitting.

 

Read everything you sign

As we were doing the paperwork, Ms. Sue noticed I was reading everything and remarked that that was fine, but that it was just their normal paperwork for a tank rental. I told her that my mentors had taught me to read everything I sign. She smiled, acknowledging that most people don’t do that.

 

It’s very important to read everything you sign because, regardless of what is said, that which is written is what you’re agreeing to. The last thing you want is to get blindsided after you signed the dotted line because you agreed to something verbally, but something different was typed up.

 

Another reason for reading everything is that it’s a free contract seminar. Before we knew where to take seminars on how to create documents well, I learned what needed to be in the contracts and deeds by reading the ones that were on public record at the courthouse. This taught me what should and should not be in each one.

 

Sometimes I get asked if I have a generic document form for… fill in the blank. The answer is no, and you shouldn’t either.

 

When you have generic documents, things accidentally get left in them that make no sense. Take the amendment form to change the closing date that I just signed. It’s a standardized form that the Georgia Association of Realtors (GAR) uses to extend the closing date.

 

The first thing that should really be omitted is the verbiage “in consideration of the sum of Ten dollars… the parties enter into…” There is no $10 being exchanged. If there is, I would like to know who is keeping up with it — with all the GAR forms we’ve signed over the years, that would add up to quite a bit of money.

 

 

The second thing that’s tweaky about this particular document is that it also has verbiage about who is in possession of the property. Why those two very different issues are being addressed in the same document, I don’t know, but it reads like this:

 

Read everything you sign

 

“Buyer agrees to allow Seller to retain possession of the Property through closing.”

 

This is just silly. How can the buyer allow me to retain possession of something I already own? I mean, the buyer has no real stake in the property. The closest thing they have to an interest in the property is their supposed payment of earnest money.

 

I say “supposed” because that money is not paid to me or my agent. The only time I see the earnest money check is at closing. And most of the time it is a personal check that is handed directly to the closing attorney. Even though that personal check is “held by their agent,” it is a personal check that may or may not have been good the entire time the contract was in effect.

 

So in reality, there was no transference of money, and the buyers’ interest via said earnest money is a farce.

 

But I digress.

 

Needless to say, that sentence about allowing me to retain possession of my property is something silly that showed up in standardized form.

 

If you do come across a generic form and intend to use it, be mindful. If it was not created in your state, it may have things that aren’t applicable or are not in accordance with your state’s laws.

 

Read everything you sign

But by reading all the documents you sign and using that knowledge to help you craft your own contracts, you’ll be able to intentionally word things the way they need to be so that they complement the particular deal you are working on.

 

Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com or call Joe at 678-986-6813.

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One comment

  1. Joey, Note the other 2 possible answer choices in the possession section of the contract to which you reference. Both of those options are post closing. At that time, the buyer will be the owner of the property, and as such, the buyers permission would not only be requested, but required to allow the Seller to remain on the property. The first option is in there to clarify that possession will change hands at the time of closing. In order to not include the first option in the check boxes with the other 2, you would need to have 2 separate possession statements on the contract, which just creates redundancy and confusion.
    Also, the buyer does actually have an interest in the property upon signing of the contract. Our current system of real estate transfers has created the custom of not necessarily treating it this way, but technically under the rules of common law, when a contract is signed, the ownership of the property is split and the buyer then owns the equitable interest in the property, and the seller retains the legal interest. The closing or the voiding of the contract will then merge the 2 interests back together. A lot of the terminology and clauses used in contracts and deeds today may sound silly because, as general practice we don’t treat property transfers in the same manner as they were 100 years ago. However, most of that terminology has a legal basis for its use and could actually be important should a suit ever arise over the contract.

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