Adjusting the contract

[JerseyJeff 0]

Has anyone run into the situation, or have an opinion, where you agree to terms with the homeowner, you present them the contract to be signed, and they say "Let's use my contracts instead" or, probably more popular, "I need to have my lawyer look this over?" If so, what do you do when they come back with our contract butchered, or even if only a few changes were made? I assume it depends on what was modified, but how do we know what items can not be changed/removed, and which ones can be modified?

 

JerseyJeff

[-Tony- 0]

JerseyJeff,

 

first off, you should encourage the owner to have the contracts reviewed by his attorney for two reasons that I can see

 

1. telling them this gives them a sense of legitimacy in their dealings with you.

 

2. If their attorney reviews it, they can not come back and say they didn't understand and you cheated them.

 

As for it getting hacked up there are certain clause you want left in there and others that could be left out. If their attorney takes out certain things that will hinder your deal you again have to choices

 

1. explain to the owner that you need these clauses in the contract and that if we can't come to some kind of understanding that you will not be able to help them

 

2. Walk away from the deal

 

MC, will chime in here, but this is how I see it.

 

Tony

[option8 0]

Use your contract, which should be pro-buyer, in this case. See what they want to change in your document and see if that fits.

 

One of the best suggestions I've heard is to always play the "reluctant buyer" as nature abhors a vacuum and if you back up, they will most likely fall forward - if they are motivated

 

Some guru's will suggest that if this comes up, you encourage the seller to have their attorney review the agreement stating you will also have your attorney do the same. Add a clause stating the definite time frame by which the review must occur and if it doesn't the contract is in full -say 3 days. Many won't take it to an attorney and then the deal is done.

 

Additionally, tell them that their attorney may HATE (overstateed) the fact that this or that clause is in there, that the attorney may not agree with such and such...Prepare them for the worst and the attorney probably will not react as negatively as your scenario. Funny thing is, some sellers are so motivated, that they don't care what someone else has to say.

 

I have heard of contracts coming back from the legal review with better terms for the buyer...especially if not reviewed by someone versed in "creative" strategies.

 

If the contract comes back butchered, perhaps they aren't motivated enough...be prepared to walk away.

 

option8

[JerseyJeff 0]

You're both right, and I appreciate the responses. If the contract comes back butchered, that may indicate an unmotivated seller. These contracts are designed to protect us, and if I get an uneasy feeling, I can also just walk away.

 

Thanks,

 

JerseyJeff

[MichaelC 160]

I haven't personally had to deal with too many individuals who need to have the contracts reviewed by their attorney first. On the occasion it does come up, I explain I am not opposed to it, but I suggest we go over it together first. I explain that my agreements, (Better word, by the way. It sounds much less imposing than contract ), are designed to be clear and easily understood, (they are). This will save us both time and the unecessary expense of an attorney. You'd be surprised how many times, after reviewing the agreement, all is fine and the papers are approved without the need for an attorney.

If they still insist an attorney reads the agreement, I insist on his name and number, and advise the homeowner I will contact their attorney and fax the papers over to him. I then do just that, but it is a blank copy with a line drawn through it and the word "void" across it.

If it does go to an attorney, the reality is the deal is most likely dead. Sorry to say, but that's been my experience.

[NickC 0]

Some excellent advice!

 

From my understanding, you should be open with the seller, go through the contract......um...agreement (I like that) line by line, explaining everything clearly.

 

If they must take to there attorney, and it comes back mangled, you could let them know it is company policy to have those clauses in the agreement. Be the reluctant buyer, ask them what they will do if you don't buy your property? Then listen, as their motivation pops back into their head, realizing you're there to HELP them!

 

Just my thoughts though.

Nick

[Summer 0]

If it does go to an attorney, the reality is the deal is most likely dead.

 

Michael - can you explain the "whys" of this more fully.

 

Is it because most attorneys, including Real Estate attorneys, are just not well versed in L/Ps?

 

Are L/P agreements way off kilter (I don't think so)?

 

Or, do attorneys just need to find things to change/alter to make some bucks? And, then it becomes a long drawn-out process?

 

Thanks for the clarification on this matter.

Summer

[MichaelC 160]

Summer, because many attorneys prefer to walk the straight and narrow. It's their training to be conservative. There is nothing wrong with the lease purchase agreement, per se. It's the concept of it, rather. It's different.

Also, an attorney is just like you and me. He/She needs to pay the bills and feed the family. There is more money to be made by spending time going over and changing a contract, or by drawing one up from scratch, then there is by quickly reviewing an agreement and saying all is well. They're in business, too. Nothing wrong with that.

Also, you are familiar with the expression "A confused mind always says no."? It's no different with attorneys. If they aren't familiar with what you're doing, if the contract isn't familiar, they'll opt to play it safe and advise their client against it.

[Summer 0]

Thanks Michael for confirming my thoughts.

 

I was having a hard time finding a competent RE attorney out here anyway. I know I asked you about this before.

 

Thanks again.

Summer