Negotiated contracts can get messy. There may be multiple documents, an offer and a counteroffer, or the original offer may have multiple strike throughs and insertions. Buyers, sellers and lenders may want a “clean” or conformed copy of the final terms for ease of knowing the final terms. The purpose of the conformed contract is to create a legible version of the original agreement.
The Terms of the Original Contract Should Not Change.
A conformed contract is just a clean version of a valid, fully executed contract and should not change any of the terms of the contract. The date on the conformed contract should not change. It should be the same date as on the original contract, even though it is signed at a later date.
If one party refuses to sign the conformed contract, the parties would still have a binding agreement so long as the original contract was signed by the parties and delivered back to the party making the last offer.
Assignment to a new party of the purchase agreement rights of a buyer is common in both residential and commercial real estate contracts. As previously noted in broker corner articles, the LLC form of ownership offers a number of advantages to owners of investment properties, including limiting the liability of the members.
The majority of assignments are to LLCs to hold specific property for the express purpose of limiting liability. The specific LLC has usually not been created at the time of the purchase, so assignment is the easiest way to transfer the contract to the new legal entity. This is true for both small investors and large investors in both residential and commercial purchase agreements.
Watch out. Assignments to newly formed LLCs can be for a legitimate purpose and perfectly legal. On the other hand, they can be a part of a money laundering scheme. It is very important for the closing attorney to review assignment and LLC documents closely to confirm the assignee’s status.
A limited liability company (LLC) is a business structure that protects its owners from personal responsibility for its activities, including its debts or liabilities. Protection from personal responsibility is the most significant advantage of creating an LLC. An LLC can have a single owner (member) or can have multiple owners (members).
LLCs are hybrid entities offer unique advantages to its members. They combine the characteristics of a corporation with those of a partnership or sole proprietorship. LLCs are easier and cheaper to form than corporations while limiting the liability of the owners more than a partnership would. Its Owners are called Members, rather than partners or shareholders.
The limited liability feature of LLCs make LLCs very attractive to investors of real estate, as well as many other business ventures. In fact, the LLC is the most common form of business entity in Georgia.
Does A Listing Agent Have to Present Subsequent Offers After an Offer to PurchaseHas Been Accepted by the Seller?
A listing broker’s duties to the seller are enumerated in the Seller Brokerage Engagement Agreement. Among other duties, there is a clearly defined duty to timely present all offers to and from the Seller, even when Property is subject to a Contract to Sell. (F101 Seller Brokerage Engagement Agreement Section 7.(a)(2).
The obligation to present all offers, even after the property is subject to an offer to sell, is also included in the Code of Ethics Article 1 Duties to Clients and Customers.
Standard of Practice 1-7. When acting as listing brokers, REALTORS® shall continue to submit to the seller/landlord all offers and counter-offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing. Upon the written request of a cooperating broker who submits an offer to the listing broker, the listing broker shall provide, as soon as practical, a written affirmation to the cooperating broker stating that the offer has been submitted to the seller/landlord, or a written notification that the seller/landlord has waived the obligation to have the offer presented.
The only way the listing agent is relieved of this obligation is if the seller has waived the obligation in writing.
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