Sales Procedures

The formation of an executed contract for sale is the beginning, not the end, of your work as a real estate agent. The regrettable attitude of many agents that, “Why is this my job?” is not an acceptable performance standard for agents registered to Buy the Beach Realty Group. Remember, instead, all the promises and statements you might make to a Seller in convincing him/her to list with you or to a Buyer prospect when explaining why he/she should “work with” you in purchasing a property and perform beyond their expectations. This is the key to successful closings and future referral business!

The following list of steps is not meant to be exclusive but rather to give you an idea of what you are expected to keep on top of at various stages of the transaction:

• Review the file and distribute documents: It is your responsibility to review the office file on the transaction. It should contain, at the very least:
  • A complete, properly collated, readable copy of the contract with all required initials and pages.
  • Complete contact information on the Buyer (if you are the buyer’s agent) or the Buyer’s agent (if you are the listing agent) including phone numbers, address, fax etc., buyers and/or sellers attorneys and mortgage lender (if any). These contacts should be entered in ACT at this time as well (if not sooner).
  • A copy of the MLS output for the property (if it was in the MLS). This is important as once in a while disputes arise about what was represented in the MLS both as to the condition of the property, fees, parking etc. Since the MLS data can change at any time the listing office decides to alter it, it is important to have the printout from the time of execution of the contract.
  • Commission Agreement
  • Copies of all relevant correspondence including email (yes, you can print out email) regarding the transaction as it occurs. Although management tries to copy all documents into the file, responsibility for seeing that the file is complete and up-to-date rests with the agent. Files may not be removed from the office. You are encouraged to scan any and all parts of the file and to maintain a file for yourself.
• Deliver the Condo Documents: As quickly as possible! Obtain a written receipt, dated receipt for them and see that it is in the file. If you are Seller’s agent, the time to start demanding that he/she deliver the documents to you is at the beginning of the contract negotiation. Often Sellers can’t come up with them. Do not tolerate lengthy delays on this: inform your Seller that the contemplated sale can be revoked at any time without reason by the Buyer unless he/she has received the Condo Documents. The list of required items includes:
  • complete set of condo docs, including amendments, by-laws and articles of incorporation
  • condo rules and regulations
  • current year budget
  • most recent year end financials (unaudited is ok)– this is not a December report
  • most recent annual financial statement (example, YTD statement)
  • condo FAQ
  • condo milestone inspection report
  • condo structural integrity study; if it is not available, condo association needs to state so in writing
  • Not required on the list, but it is advisable to get a written statement from the condo about whether or not there are any existing or pending special assessments. Pending is defined as appeared on the agenda or in the minutes in the 12 months prior to entering into contract to sell the property. The answer to this question could change from time of listing until contract period, so an update is advised
• Follow up on the early deadlines:
  • Additional Deposit(s): Were they made on time? If made to another brokerage or escrow agent, demand and obtain an escrow letter indicating that the money was paid over on time.
  • Application for Financing: If a mortgage is involved the Buyer is required to make a timely formal application for financing for the FINACING AS DESCRIBED ON THE CONTRACT. The deadline for this is given in the contract. Be familiar with it and demand confirmation from the Lender that an application, consistent with the contract, has been made and any funds required by the lender have been provided by buyer.
  • Application for Condo Approval: The same as #2 above. There is a deadline for doing this and a buyer who fails to make the application on time, accompanied with the correct fees, is in default.If any of these items are not carried out on time, you are responsible to notify both parties, in writing that the situation has come to your attention, that the deadline for the item has passed and that the buyer appears to be in default and urging the buyer to act at once to cure the default.
  • FINANCING PERIOD/LOAN COMMITMENT DEADLINE: This is a very important deadline! Current contract language could turn a financed transaction into a cash transaction. Until you understand and are familiar with this language, seek guidance PRIOR to your deadline expiring. The financial consequence to the buyer could land you into trouble, and you have a duty to know your job. Once again, seek guidance from your Broker (not your co-worker) prior to the expiration of this deadline.
    • Mortgage brokers and loan officers often throw the word “approved” around while unable to provide a written Loan Commitment. The contract has a specific deadline for obtaining a Loan Commitment. 
      
      You should follow up with the Lender frequently (at least weekly) and request the status of the loan and ask when you should be able to obtain a Loan Commitment in writing from their office. As the deadline approaches, start warning the Loan Officer that unless a Loan Commitment is forthcoming on time, the deal will fall through. This usually motivates them.
• Select Closing Agent or Attorney: Urge your Buyer or Seller to select an attorney or Title Company to close for him/her. Allow the provider to provide quotes for their services (don’t guess their fees)
• See that all the contacts are in ACT: By now, you should know the following:
  • Buyer or Seller
  • Buyer or Seller’s agent (if not you)
  • Mortgage Lender (if any)
  • Settlement Agent– Typically the Buyer selects either an attorney or title company
  • Condo Contact person to facilitate transaction
• Inspections: Whether you are the Buyer’s or Seller’s agent, you have a direct responsibility to assist in giving access to property inspectors and to see that they are carried out on time and the results of any inspection communicated to the Seller within the time deadlines set forth in the contract. Make sure the electricity is on and you have access to the AC unit.
  
  Since all contracts are different in the specific timing for inspections and in what specific procedures must be followed to demand repairs or to respond to such a demand, you must review the sales contract, understand the timing of these issues and see that they are carried out on time. A Buyer is generally not required to inspect a property at all, but if he/she wishes to perform any inspections permitted by the contract, you must be sure that they are done strictly within the deadlines. If inspections cannot be performed on time for some reason, you must negotiate a written extension of time for their performance and obtain signatures of both Buyer and Seller. Any such addendum must, of course, be placed in the file with the contract.
• Appraisal: If mortgage financing is involved, an appraisal will be required. You should assist the appraiser in any way possible including giving him/her any information that would support the value of the property if the sales price is outside the normal range for the type of property being sold. If the appraisal does not come in on target there may not be a closing and, therefore, no commission. NOTE: the contract is not contingent on the property appraising for the contract sales price unless you include an appraisal addendum. Without the addendum, the contract is contingent on an appraisal satisfactory to obtain the financing.
• Repair Items: If Seller is required to make repairs due to contract obligations and/or Buyers inspection, follow up and make sure they are being made on time. Sellers tend to delay this stuff until the last minute and lots of issues arise causing panic, bad blood and risk of a delayed closing or disputed sale. Follow up on this stuff regularly. NOTE: Most sales are As-Is with right to inspect, which means the seller is not obligated to make repairs or give the buyer a credit at closing unless there is an executed addendum outlining the repairs or credit.
• Possession: If the property is occupied by a Tenant or subject to possession by another party, make sure the appropriate box is checked on the sales contract. If this box is not checked, the seller is obligated to deliver the unit vacant at closing. To avoid problems, make sure you understand who occupies a property. As a side note, a good practice is to never allow the buyer to have possession prior to closing. A buyer’s possession should only take place AFTER closing (unless it is the tenant purchasing the property).
• Contract Extensions: If you know that a deadline needs to be extended, try to negotiate it early enough, not at the last minute of the deadline. Examples are the inspection period, financing period, closing date. Extensions need to be in writing and executed by the buyer and seller. Don’t cut this too thick or too thin as it’s much harder to get a second extension than a generous first one. Both parties must sign (of course) with copy in the file.
• Prior to Closing: These items should be reviewed at least a week prior to closing:
  • Items turned over to Buyer at closing: Keys, parking passes, decals, garage openers, common-area passkeys etc. Who has them? When will they be provided? Whether you are working with the Buyer or the Seller, your have a duty to make yourself aware of what needs to be turned over and to avoid last-minute issues about these items. If you are working with the Buyer, contact the Seller’s agent and make him/her aware that you expect all these items to be produced at closing.
    
    If a Buy the Beach agent is involved in a transaction on behalf of a Seller, the Seller’s agent should make the Seller aware of his/her responsibility to turn over a complete set of required items and of the fact that they will be charged at closing for any items not produced. Early warning on these things will eliminate the common problem of Sellers “forgetting” to turn over mailbox keys, common element keys etc.
  • Are any required repair items completed?
  • Who has the Association Approval Document? If the sale is a condominium, it will not close unless the certificate is in the hands of the settlement agent at closing. Ask the settlement agent if the original is needed.
  • Disbursal Instructions: If we are the escrow agent, obtain instructions from the Settlement Agent (Closing Agent) as to how to handle the escrow disbursal and submit your instructions using our on-line form.
  • Is Buyer aware of cash to close? If you are working the buyer, make sure he/she is aware of how much to bring to closing and in what form. Personal checks are not acceptable. Most Closing Agents require a wire transfer.
  • How will escrow funds reach the settlement agent: If we are holding the escrow, be sure you have a realistic plan for delivering the check(s), especially if for some reason you are not planning to simply attend the closing. This selling agent’s responsibility if both sides are working through Buy the Beach.
  • Schedule Walk-Through Inspection: Generally, the later the better for both parties. Often the day of closing. Make sure you have access.
  • Date, time and Place of Closing: Don’t assume anyone will call you on this (not in Miami anyway). You must take active steps to be informed. Most Buyers and Sellers do not attend a formal closing, but there are documents that need to be notarized. Know in advance if the Buyer or Seller will be physically in Miami for a closing. If not, inform the closing agent immediately. Sometimes a notary is dispatched (for a fee) to meet with the Buyer or Seller. Sometimes the Buyer or Seller go to their bank, etc. NOTE: A buyer should be informed that the timing of the funds being delivered to the closing agent and/or timing of signing loan documents may affect their ability to get keys on the same day. For instance, if a buyer signs loan documents at 4:30pm on a Friday, the Buyer may not get keys until Monday. Always encourage the Buyer to sign in the morning and wiring their funds the day before closing. It saves everyone from disappointment and frustration.