The following legal forms were revised and updated for 2018€¦ · The following legal forms were...

The following legal forms were revised and updated for 2018:

• Purchase Agreement (Improved Property) • Purchase Agreement (Unimproved Property)• Listing Contract (Exclusive Right to Sell) Improved Property• Listing Contract (Exclusive Right to Sell) Unimproved

Property• Listing Contract (Exclusive Right to Lease)• Amendments to Purchase Agreement, Listing Contract and

Lease Agreement• “AS IS” Addendum to Purchase Agreement• Buyer’s Inspection Response

PURCHASE AGREEMENT (Form #02): Lines 21-22

HOME HEATING FUEL: Any remaining fuel stored in tank(s) ❒ to be included in the sale ❒ will be purchased by Buyer at current market price measured within five (5) days prior to closing ❒ not applicable.

REASON: To be used when there is no fuel tank on the property.

* Language in red is new language.

PURCHASE AGREEMENT (Form #02): Lines 37-41D. EARNEST MONEY:1. Submission: Buyer submits $________ as earnest money which shall be applied to the purchase price at closing. If not submitted with Purchase Agreement, earnest money shall be delivered to escrow agent within ___________ ❒ hours ❒ days of acceptance of offer to purchase. Unless indicated otherwise in this Agreement, the listing broker shall act as Escrow Agent and shall, after acceptance of this Agreement and within two (2) banking days of receipt of the earnest money, deposit the earnest money into its escrow account and hold it until time of closing the transaction or termination of this Agreement.

REASON: To clarify to whom the earnest money should be delivered, the timing of the delivery and the deposit of the earnest money into the escrow account.

*Note: Same change was made to Purchase Agreement Unimproved Property (Form #34), Line 21-24


PURCHASE AGREEMENT (Form #02): Lines 82-88F. TIME FOR OBTAINING FINANCING: 1. Application: Within ______ days after the acceptance of this Agreement,

Buyer agrees to make written application for any financing necessary, including an appraisal, to complete this transaction or for approval to assume the unpaid balance of the existing mortgage within ______ days after the acceptance of this Agreement and to make a diligent effort to meet the lender's requirements and to obtain financing in cooperation with the Broker and Seller. Buyer authorizes lender to order appraisal immediately.

2. Approval: No more than ____ days after acceptance of this Agreement shall be allowed for obtaining loan approval or

(Continued on next page)

PURCHASE AGREEMENT (Form #02): Lines 82-88 (Continued)

mortgage assumption approval. If an approval is not obtained within the time specified above, this Agreement may terminate unless an extension of time for this purpose is mutually agreed to in writing.

REASON: Re-arranged wording and separated Application time from Approval time to make easier to follow. Also clarifies that buyer and/or their lender should order the appraisal immediately.

*Note: Same change was made to Purchase Agreement Unimproved Property (Form #34), Lines 69-75

* Language in red is new language. Strikeout indicates language removed.

PURCHASE AGREEMENT (Form #02): Lines 95-97

If closing cannot occur by “Closing Date” (or any mutually agreed extension thereto) due to government regulation, the date of closing shall be extended for the period necessary to satisfy requirements, not to exceed 7 business days.

REASON: The government regulation (TRID) has not been causing the delays expected when it went into effect.

*Note: Same change was made to Purchase Agreement Unimproved Property (Form #34), Lines 82-84

* Strikeout indicates language removed.

PURCHASE AGREEMENT (Form #02): Line 100

3. CONTINGENCY: This Agreement: ❒ is not contingent upon the closing of another transaction❒ is contingent upon the closing of the pending transaction on Buyer’s property located at ___________ scheduled to close by ____________.❒ is contingent upon the acceptance of a Purchase Agreement on Buyer’s property:

❒ Addendum to Purchase Agreement First Right Contingency. See attached Addendum.❒ Addendum to Purchase Agreement Limited Purchase Contingency Right. See attached Addendum.

REASON: To clarify if there is any contingency and, if so, which kind.

*Note: Same change was made to Purchase Agreement Unimproved Property (Form #34), Line 87



5. WIRE FRAUD. If you receive any electronic communication directing you to transfer funds or provide nonpublic personal information, EVEN IF THAT ELECTRONIC COMMUNICATION APPEARS TO BE FROM BROKER OR TITLE COMPANY, do not respond until you verify the authenticity by direct communication with Broker or Title Company. Do not rely on telephone numbers provided in the electronic communication. Such requests may be part of a scheme to steal funds or use your identity.

REASON: More warning for consumers based on known instances of fraud.

*Note: Same change was made to Purchase Agreement Unimproved Property (Form #34), Line 100



If the INITIAL inspection report reveals the presence of lead-based paint, radon, mold and other biological contaminants, or any other condition that requires further examination or testing, then Buyer shall notify Seller and have ____ additional days from the deadline listed above to order, receive and respond in writing to any additional all inspection reports.

REASON: Clarifies the process to be followed when Buyer chooses to have additional inspections and/or testing.

* Language in red is new language. Strikeout indicates language removed.


3. ❒ PROPERTY IS SOLD “AS IS”. See attached Addendum.

REASON: To indicate if property is being sold “As Is” and to remind brokers to use the “As Is” Addendum.


LISTING CONTRACT (Form #01): Line 81

SELLER HAS BEEN ADVISED OF BROKER’S COOPERATIVE COMPENSATION POLICY, including the amount of compensation that will be offered to cooperating Brokers which is ___% of the sellingprice or not less than $______________, included in total commission listed above.

REASON: To clarify that the cooperative compensation will be taken from the total commission.

*Note: Same change was made to Listing Contract Unimproved Property (Form #50), Line 81; and Listing Contract Right to Lease (Form #35), Line 28



11. Seller ❒ is ❒ is not offering a limited home warranty.

REASON: To establish whether Seller is offering a home warranty to the Buyer.



M. WIRE FRAUD. If you receive any electronic communication directing you to transfer funds or provide nonpublic personal information, EVEN IF THAT ELECTRONIC COMMUNICATION APPEARS TO BE FROM BROKER OR TITLE COMPANY, do not respond until you verify the authenticity by direct communication with Broker or Title Company. Do not rely on telephone numbers provided in the electronic communication. Such requests may be part of a scheme to steal funds or use your identity.

REASON: More warning for consumers based on known instances of fraud.

*Note: Same change was made to Listing Contract Unimproved Property (Form #50), Line 238; Listing Contract Right to Lease, (Form #35), Line 154

* Language in red is new language

“AS IS” ADDENDUM TO PURCHASE AGREEMENT (Form #53): Lines 20-25

3. Buyer shall order all independent inspections after Acceptance of the Purchase Agreement. Buyer is advised to conduct independent inspections and investigations of the Property within the Inspection Period specified in the Purchase Agreement. If Buyer’s inspections uncover any previously undisclosed defects in the Property, Buyer shall have _____ days beginning the day following the date of acceptance of the Purchase Agreement to (i) Buyer shall be entitled to terminate the Purchase Agreement prior to the expiration of the Inspection Period as provided in the Purchase Agreement in which case Earnest Money shall be promptly returned to Buyer, and (ii) Seller

(Continued on next page)

“AS IS” ADDENDUM TO PURCHASE AGREEMENT (Form #53): Lines 20-25 (Continued)

shall have no obligation whatsoever to correct such defects to repair the Property as a result of such inspections. In the alternative, Buyer may waive such defect and the transaction shall proceed toward closing. If the Buyer does not terminate the Agreement in writing or request additional time to respond within the specified time period, the Property shall be deemed acceptable.

REASON: To clarify the “As Is” process.

* Language in red is new language. Strike out indicates language removed.

AMENDMENT TO LISTING CONTRACT (Form #13)AMENDMENT TO PURCHASE AGREEMENT (Form #20)AMENDMENT TO LEASE AGREEMENT (Form #51)

Titles being changed to:

AMENDMENT #___ TO LISTING CONTRACTAMENDMENT #___ TO PURCHASE AGREEMENTAMENDMENT #___ TO LEASE AGREEMENT

REASON: To help keep track of the different Amendments in a transaction.

BUYER’S INSPECTION RESPONSE #___ CONDITIONAL ACCEPTANCE OF PROPERTY CONDITION (Form #05): Line 22

❒ Buyer is exercising additional time to order, receive and respond in writing to all inspection reports, as provided in Purchase Agreement, because the INITIAL inspection report reveals a condition that requires further examination or testing. No Seller response is required.

REASON: For Buyer to notify Seller additional inspection/testing is going to occur and that one response will be submitted.

Special thanks must be extended to the IAR Forms Committee. This volunteer group provides many hours of

time each year to provide the most current updates to these forms.

Questions on these changes may be directed tothe IAR Legal Hotline:

1.800.444.5472 (toll free)

The IAR Legal Hotline is available to ManagingBroker members and their designated agents, statewide, Monday-Friday 9:00am to 5:00pm.

The following legal forms were revised and updated for 2018€¦ · The following legal forms were...

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Transcript of The following legal forms were revised and updated for 2018€¦ · The following legal forms were...