Hawaii Randy's Real Estate Opinions: Is Your Contract Clean?

Is Your Contract Clean?

DROAThe last couple of years we in were in a market where homes were getting multiple offers.  Everything sold; seller's were not overpriced they were just ahead of their time.  People of all walks of life were jumping into the profession and hitting the streets with little to no experience.

During this period there was a trend.  We saw sloppiness, laziness, foolishness and inexperience abounding.  We saw contracts riddled with mistakes, missing signatures, not legible, incomplete and filled with contingencies.  Despite incompetence they agents were somehow able to stumble around and find homes for their clients or sell their listings.  Many times the agent on the other side carried them to the finish line.

Now the market is normalizing here in Hawaii and I am seeing contracts that are even weaker and sloppier.

This is a profession.  Your clients are paying big money for their purchases and for your fees.  PLEASE learn your trade!

The DROA should be second nature to you.  If you do not know what you are doing pay someone to teach you.

If you want to help your clients learn to write clean offers.  Make every offer an executable contract.  If the other side signs you are going to escrow. 

  • Make sure you have all needed signatures.
  • Have a proper description of the property.
  • Attach the letter from solid mortgage lender, not Bob's mortgage service that no one has ever heard of.
  • Have all needed addendums.
  • Generate all documents from the computer so it is legible, avoid handwritten.
  • Discuss contingencies with your client before putting silly things in the offer.
  • I always include a cover letter introducing my clients to the sellers.  There home is part of them, and this is personal to many sellers.  I want them to want my clients in their home over all others.

The goal is to make the offer look so strong that the other side is afraid to lose you.  You will find seller's agents will push their sellers to take a little less for an escrow that looks like it will be trouble free and likely to go to closing over one that has contingencies and riddled with land mines.

I always call the seller's agent before submitting an offer.  I want them to know my offer is coming.  You can gain valuable information from that call.

  • Do they have other offers?
  • What escrow agent do they prefer?
  • Are there any issues we need to address in the offer?

My goal is to be sure that there will be no need for an automatic counter-offer to fix flaws.

When representing the seller never recommend a counter offer for something silly.  If you sign you have a contract.  If you so much as you change a comma or a period, no deal!  I always ask my client's is this a deal breaker?  Are you willing to risk this deal for that?  That is what you are doing when you counter.

How many times have you seen an agent insert themselves and persuade the seller to counter an offer to pick an escrow agent of the real estate agents choice?  You should be slapped for being stupid.

Here is a real life example where I was the buyer.  I am disclosing up front that I used a local Realtor.

I put an offer on a townhouse in Tempe, Arizona a few years back.  The property was on the market for more than a year.  I gave a strong offer to the seller.  They countered me for nit picky stuff.  A total of no more than a couple of hundred dollars worth of stuff and the famous; change the escrow company.  They also shortened the time line by 7 days.  Over a year on the market, no other buyers, it was vacant and somehow 7 days mattered?  I as many people hate being nickel and dimed.  I give them a solid offer.  Not too smart on their part.

What do you think I did?  I did the logical thing and I used the 72 hours they gave me to respond to look for a better deal.  I put an offer on one up the street, had it accepted and opened escrow before the 72 hours was up.

That was an expensive lesson to both the seller and his agent.



Randy L. Prothero, REALTOR®

Broker-in-Charge, ABR, AHWD, CRB, CRS, e-PRO, GRI, MRP, SFR

eXp Realty

Team Leader - "The Prothero Group"

Randy Prothero is well established as an expert in working with military / VA clients and first time home buyers.  His home seller's (listing) campaign is one of the most aggressive marketing programs in the area.  His luxury home listings sell faster and for more money.

Based out of Mililani, Hawaii. Randy services the island of Oahu (Honolulu County) Performs mediations and ombudsman services for the Board of Realtors.  To improve overall professionalism in his area Randy also offers classes for real estate agents. 

www.HawaiiRandy.comOahu (Honolulu County) Property Search  Hawaii Military Relocations

Comment balloon 32 commentsRandy Prothero • November 22 2006 01:16PM


Randy, you are SO right!  I had a seller almost walk away from a deal on their vacant house over the refridgerator.  We gave them a clean offer, it was low...but for this time of the year and a vacant house you better move!!!  They did see the light at the  end.  A seller that can close December 7th (we're getting signatures today) is a blessing right now!

Posted by Chris Tesch, College Station, Texas Real Estate (RE/MAX Bryan-College Station) over 12 years ago

"Not to smart is way too kind".... How about stupid control freak.

Did you tell him why you lost them?



Posted by Ginger Sala, Wilmington NC Real Estate & Relocation~ (Wilkinson & Associates, Wilmington NC) over 12 years ago
 this is great and so true!
Posted by Shane Ramer (Solano Mortgage) over 12 years ago
Nobody likes to be nickel and dimed to death.  Its so nitpicky - its really just tacky!
Posted by Kaushik Sirkar (Call Realty, Inc.) over 12 years ago
This is excellent information. We DO have a lot of top-notch agents in our town. So, it is rare that we have sloppy contracts. But with the market picking up (we are up 5% from last year), here, this may prove to be very helpful. Thank you!
Posted by Derek and Mariana Wagner, The Artisan Group - Colorado Springs REALTORS® (The Artisan Group- Keller Williams Premier Realty ) over 12 years ago
Nice Post!  This is one of the most overlooked parts of Real Estate!  YOU MUST HAVE AN AIRTIGHT CLEAN CONTRACT!
Posted by Home Design, Home Design and Real Estate over 12 years ago
Randy, I always strive to write "clean" contracts with/for my clients. The less obstacles you place in front of the Sellers, the greater your chances of gaining acceptance.
Posted by Rich Jacobson, Your Kitsap County WA Real Estate Broker (Fathom Realty West Sound) over 12 years ago

"My goal is to be sure that there will be no need for an automatic counter-offer to fix flaws."

Right on target.  80% of the offers we receive REQUIRE a counter-offer just to clean up the contract.  When agents put their Buyer in that position, forcing a counter-offer, they risk other items being included in the counter-offer that may never have come up otherwise.

Posted by Suzanne Marriott, Associate Broker, CLHMS, e-PRO (Keller Williams Arizona Realty) over 12 years ago

As a Loan Officer I still see things that are wrong on contracts, and I don't get to see the contract until it is signed by everybody.  That means that two Realtors have looked at it and it still has mistakes. Fortunately the Realtors I work with are very good at what they do, so their contracts are usually pretty clean, the mistakes are usually from Realtors that I don't normally work with.

One final thing, I love it when a control freak Realtor tells one of my Realtors that they want them to use their Loan Officer. By the time they get off the phone they have lost a considerable amount of their hearing.....LOL.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 12 years ago

A refrigerator, are they crazy? Go buy a new one with the proceeds.  Anyone who put at risk a sale over an appliance should be shot. 

If the home does not include an appliance I am sure to clearly post that in the listing and remind the buyer's agent before they draft the DROA.  If it is a big issue there are easy ways to take care of it, without putting a deal at risk.

Recently I was covering for an agent who was on vacation.  The buyer wanted the potted plants on the patio.  Her client the seller met and dislike the buyer's agent and decided he would give them nothing.  The home was just under $1,000,000.  It was the highest one sold in the neighborhood and he was starting a battle over a couple of plants that he did not even want himself.  I gave my famous "Is this a deal breaker speech"? He thought hard, he wanted to make his point, but in the end money talks.  We closed the sale and the buyer got his plants.  Hell I would have bought him his choice of plants if it was a problem.


Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 12 years ago

Great Post.

Too many times in the last few years I have had to walk a buyers agent through the mistakes on their offer on one of my listings.  Learn your trade!!  Most experienced agents will always help someone out.  Ask the questions.  We were there too and I always asked for help if I needed it.



Posted by Timothy Mertzlufft ABR, e-Pro (Prudential Rubloff Properties) over 12 years ago

i have heard of a couple of deals not making it because of the gas grill.  The grill is not real estate but for some reason buyers think it should stay.  It is just easier to add it to exclusions.

i like you posts, would it be ok for me to add you to my associate list?


Posted by Joanne Brown (Rockland County Real Estate) over 12 years ago

Ahhh the agent EGO bit...got to take the EGO out of nEGOtiating!


Posted by Monika McGillicuddy, NH Real Estate Broker (Prudential Verani Realty) over 12 years ago
A properly written purchase offer, what a novel idea. Unfortunately I don't see too many of those. I usually have to take the offer after discussing it with my sellers and make an entirely new contract for the counter with the price and terns we want.  I've even received them with no price! Oh I forgot is the answer I get. Really gives my seller and I confidence in that Realtor. Very good post Randy.
Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) over 12 years ago

Timothy - I don't mind helping out other agents.  What I can't figure out is where is their broker?

JoAnne - I would be honored for you to add me to your associates list

Monica - I will remember the EGO the next time it comes up.  Good one.

Bryant - Not only my client lacks confidence, I dread the upcoming messy escrow

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 12 years ago
Thanks for the great post on such an important topic!
Posted by Sean Carroll, Real Estate Speaker and "Expert" Coach (The Get Off Your A$$ Academy) over 12 years ago
Sean -  You are welcome
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 12 years ago

Client-friends of mine and I often reminisce and laugh about the house they made an offer on and then walked away from - because the Seller wouldn't include a riding lawn mower!

Randy - I like your cover letter idea.

To avoid frequently missing information or my pet peeve, personal property listed as "per MLS", I have a contract filled out with proper names, legal description, personal property, etc. posted on the property web site as well as linked to the MLS - the selling agent need only insert buyers names, closing date, offer and mortgage details. 

Posted by Sharon Simms, St. Petersburg FL - CRS CIPS CLHMS RSPS (Coastal Properties Group International - Christie's International) over 12 years ago
Ooohh!!! Everything you said is so true. Sometimes I wonder how some agents even got through high school, based on their competence writing these simple contracts. Please say they will be the ones to drop out and go back to whatever they were doing before becoming real estate agents!
Posted by Michael S. Mackey, REALTOR ABR, CRS, GRI, RSPS (CENTURY 21 All Islands) over 12 years ago

Sharon - I have actually written an offer to include the fish in the pond.  The fish pond was main feature of the home.

In another deal the owner was moving to the mainland and had not found a home for the dogs.  My client's children loved the dogs.  I included in our cover letter that they would be interested in keeping the dogs with the home.  We thought that might make the difference since they were receiving multiple offers. 

In the end they went with a higher offer and called me to see if my buyers would still take the dogs.  Oh well.

Everything in real estate is negotiable.  The most important thing is to properly address it in the contract and make it as clean as possible.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 12 years ago

Michael - There are those who somehow find a way of lingering around for many years.  We can only hope that they become the exception.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 12 years ago

I really appreciate when a buyer's agent calls before writing an offer. This is time to discuss the best settlement date for all parties etc. What is included and excluded can be clarified. You can also find out what may be important to the buyer. If it s the gas grill, I can try to "get" it for the buyer. Make the buyer's agent feel important and let them know you look forward to working with them.

For newer agents, I offer to review the contract for them, if they are willing to learn. Most are very thankful. Having all the small details discussed makesfor an easier transaction.

Take the EGO out of negotiations, good point Monika,

Nice post Randy!



Posted by Margaret Rome, Baltimore Maryland, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) over 12 years ago
This is really a wonderful post.  Once I worked with another realtor on a deal and I warned her about certain wording in the contract.  We were representing the buyer.  Because she was in the business longer that I was she felt she knew what she was talking about.  Because of this, the buyer ended up losing a $1,000.  In the end, she admitted to what I was saying to her and about a month later decided to leave my company for another.  I like looking over my contracts carefully with my customers.  If I'm ever doing a contract that I just feel uneasy about, I'll take it to my broker to look over just to be on the safe side.  Our local board often teaches us Realtors how to write contract.  Those are good refresher courses to attend.
Posted by Netta Blackwood, REO/BPO Expert (La Rosa Realty) over 12 years ago

Margaret - I always recommend to all new agents to make the phone call to the other agent.  You will save yourself a lot of grief.  They should always have an experienced agent or a broker help them draw it up also.  An extra pair of eyes is always good.

Netta -  Our local board has training, but it seems like the art of contract writing is somehow not emphasized enough.  I feel I am very good at writing contracts, yet I still like to have another top agent or our BIC review them.  They may give you good ideas or catch any errors.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 12 years ago

Broker Bryant should have mentioned the offer we received a while back...

It was written up with a crayon by a little girl...

Turns out the Buyer's Realtor does not speak English...

Naturally, we can't negotiate with a child. I think that may be illegal...:0)

TLW "The Lovely Wife"...I Saved That Offer For The Fun Of It...ROAR!

Posted by "The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW. (President-Tutas Towne Realty, Inc.) over 12 years ago
TLW - I have had bad offers sent to me, but I think you just topped my worst.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 12 years ago
It's the Crayon man...:0)...TLW...ROAR!
Posted by "The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW. (President-Tutas Towne Realty, Inc.) over 12 years ago

I will definitely remember the Crayon offer. 

I would love to see a picture of it.  It would be a great sample to show new agents of what not to do.

If the agent can't speak English how did he get a license?

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 12 years ago

TLW - Just a quick note, I think my 6 year old son is a better negotiator than a few of the agents I have dealt with.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 12 years ago
Randy...I'll look around, we may have saved that. In reference to your 6 yr old negotiator...Pretty scary isn't it? Why don't you let him write up a few offers. :0)...TLW...ROAR!
Posted by "The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW. (President-Tutas Towne Realty, Inc.) over 12 years ago

TLW - I will still have to write them up for him.  The last closing I had my youngest would have done a better job, than the agent on the other side who couldn't write a contract either. 

My 6 year old son is a tournament chess player, he is honest, and a good negotiator (he can talk my wife out of almost anything).  All skills lacking on the that agent.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 12 years ago
Okay. Now you've cracked me up. :0)TLW...ROAR!
Posted by "The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW. (President-Tutas Towne Realty, Inc.) over 12 years ago

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