New Forms and Contract Changes
TO: All Brokers
The Board has approved a few new forms and several contract changes that will become effective on November 15, 2016. Attached you will find the new forms and also any form changes with the changes in Red. The following is an explanation of each form and each change:
CLICK HERE TO VIEW THE NEW FORMS CHANGES
A clean copy will be available on Transaction Desk on November 15, 2016.
- Defects Notice/Response/Agreement (D100-S, D100-L) – This form has been created to complete a defects notice or response and defines that when signed by all parties it becomes a defects agreement. (See Exhibit #1A and #1B)
- Notice of Termination of Sale (T100) (See Exhibit #2) – This form has been created to give a notice or termination under Option A or B of the contract and also under any other contingency to a contract that allows a buyer or a seller to terminate.
- Real Estate Contract. (See Exhibit #3)
- Line 58 – A Back-Up Offer Addendum has been created and the back-up language has been removed from the contract.
- Line 59 – A contingency for closing of buyer’s property has been added.
- Lines 68-69 – Language has been added to require a seller remove all personal property not included in the sale and leave the property in broom-clean condition at closing.
- Lines 102-106 – The septic inspection language has been changed so that if a check box is not marked the default is that a buyer DOES intend to inspect the property.
- Lines 138-140 – Language was added to make clear that if a buyer does not terminate within the time periods OR does not provide a defects notice at all, buyer accepts the property in its “As-Is” condition.
- Lines 142-143 – Language was added to clearly remind all parties that buyer may terminate the contract under Option B.
- Line 145 – Language makes clear the buyer has the sole discretion to determine suitability of the property.
- Section 16 – Lines 239-275 – Section 16 was rewritten/reformatted and replaced in response to member comments and concerns.
- (a) Title work is still ordered by seller and if blank seller chooses the title/closing company. If blank it also still defaults to buyer paying for the title policy. The term title policy service charge is used to be inclusive of all charges to the buyer by the title company (i.e. the “bundle” of charges).
- (b) Survey – no changes are made.
- (c) Title/Survey Review Objections – no changes are made.
- (d) Closing Procedures – Only one change has been made which is on line 255. The buyer and seller shall split the closing fee equally. There is no longer a check box.
- (e) Seller Concessions – This is a new provision which allows the member to indicate the amount of seller concessions (i.e. closing costs) to be paid by the seller. The “Concessions” are broadly defined and further identified as any “allowed by lender”. This amount is inclusive of the title/closing fees marked in 16 (a) so that there should no longer be confusion between the check boxes and a handwritten statement by the agent regarding closing costs paid by seller.
- (f) The TILA/RESPA language is incorporated into the contract. This MAY eventually eliminate the need for the use of the separate TILA/RESPA form however legal counsel is awaiting clarification of those rules. The Board will notify members if and when we can eliminate the separate form.
- Page 8 Signature / Date of Parties – The signature / date lines of the contract are amended to better fit with the electronic signature programs being used by many members.
- Finance Addendum – (See Exhibit #4) – Lines 3-4 – A clarification was added that buyer may not change loan terms without consent of seller.
- Debtholder Approval Contingency – (See Exhibit 5) – Lines 29 and 33 – Statuses are updated to reflex the matching Flex MLS statuses.
- Authorization to Show – (See Exhibit 6) – Lines 17 and 32 – Wording is updated per advice of legal counsel. Line 16 – Not to Exceed 60 days was removed.
The board has also approved the initial lines on all forms where these lines are not essential. Any form that may only be signed by one party, buyer or seller, the initials will remain.
Questions? Send an e-mail to [email protected]. Thanks!