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Sell Homes, Not Legal Advice

In an effort to provide the very best service to our clients and to continually educate our agents to be the very best real estate professionals in the market, we put forth the following important information on developments in our industry.

Before I begin, please allow me to introduce myself. My name is Barry Nicholas. I am the designated broker for Tru Realty here in Scottsdale. I’m thrilled to be a part of the executive team and even more excited about being your designated broker. I could go on and on about my many years of experience in real estate but will spare you the details and simply provide a link to my bio here.

We have had several questions lately regarding BINSR repairs requested by the buyer to be made by the seller. Below is a suggested guide regarding how to address the subject during BINSR negotiations:

CONTRACT VERBIAGE.

AAR Residential Resale Real Estate – Purchase Contract.

6. Due Diligence
6J. Buyer Disapproval
(2) Provide seller an opportunity to correct the items disapproved, in which case:
(B) If Seller agrees in writing to correct items disapproved, Seller shall correct the items, complete any repairs in a workmanlike manner and deliver any paid receipts evidencing the corrections and repairs to Buyers three (3) days or ____ days prior to COE Date.

BROKER ANALYSIS.

This clause does not specify who is to make the repairs. The homeowner, handyman, licensed-bonded-and-insured contractor or a combination of all three could be making the repairs.

Workmanlike manner is an industry standard, refers to the desired and acceptable standard of quality of work and material on a construction project.

If a buyer requests the seller to make repairs outside the scope of workmanlike manner, and or specifies an entity or professional to make said repairs, it should be put in this section of the BINSR.

FOR EXAMPLE.

The buyer elects to provide the seller with an opportunity to correct the disapproved items listed below. Items disapproved: (list repairs and add one or both of the clauses below)

“Seller to make all repairs using licensed, bonded and insured contractors. All paid receipts to include contractor contact and license number”

and/or

“Repair to be made specific to what is quoted on the inspection report or estimate”

If this is not specified, the seller is only obligated to complete repairs in a workmanlike manner made by an entity of the seller’s choice with paid receipts, if any, provided to the buyer.

If it is specified, then the seller will need to have work completed per inspection report and paid receipts from a licensed, bonded and insured contractor and provide any other paid receipts to the buyer.

A problematic scenario that could arise is if the agent doesn’t recommend the above language be inserted into the buyer’s BINSR repair request. A buyer could bring into question the Arizona statute where a seller must use licensed and bonded contractors for repairs over $1,000. We, as agents, are not deemed experts regarding statutes and laws. It’s important for us to refrain from putting forth an opinion on this or any other statutes regarding real estate.

Section 2 of the Buyer Advisory provides links where the buyer can check out contractor status, permits, and the repair process. A buyer or seller should consult legal counsel if they have questions regarding their rights or obligations under this statute.

LEGAL ADVICE.

As real estate brokers and agents, we receive a lot of information on a daily basis regarding a variety of real estate topics. It is very easy to engage in conversations in relation to real estate that are outside of our purview. When engaging in these types of conversation with a buyer or seller, it’s best to remember the following:

A salesperson must not give legal advice, directly or indirectly. This includes advice in regard to the legal rights of the parties, the legal effect of notices and instruments, and matters affecting the title and any tax consequences. When a question is raised by the buyer or seller and the salesperson knows the answer but might be bordering on legal advice, it must be made clear that only attorneys can give such advice. Salespeople should never make the choice for, or advise the buyer on how to take title to property. No salesperson is authorized to render legal, appraisal or tax advice to any person. No charges shall be made for opinions of property value and all opinions of value shall contain a statement disclaiming them as guarantees of value.

This level of detail and support only scratches the surface of what we provide our agents at Tru Realty to help them thrive. If you have any questions or would like to find out more about joining a forward-thinking brokerage, please contact me at barry@trurealty.com.


About the Author

Barry Nicholas is the Designated Broker at Tru Realty. He currently has active broker’s licenses in Arizona, Kansas, Missouri, and Oklahoma and is a graduate of the Realtor Institute. He also holds the Certified Residential Specialist Designation. Barry provides his clients with the expertise and acumen that addresses the ever-changing trends in home sales, property marketing, and real estate technology. As your Broker, he views customer service as his utmost priority.

MORE ABOUT BARRY >

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