Changes to the Mother of All Real Estate Forms
By Ryan Dosen
Only one year after receiving a major overhaul, the Pennsylvania Association of Realtors’ Standard Agreement of Sale (Form ASR) will be seeing more changes in the near future. The ASR is the standard form used for buying and selling real estate in Pennsylvania. So, even if you’ve bought or sold a home recently, you don’t know everything you’re going to need to know if you’re planning on buying or selling a home in the near future. Here’s a snapshot of some of the main changes…
Updated Broker Blocks
The first page of the current ASR contains blocks for the buyer’s broker and the seller’s broker. These blocks have space for the broker and agent name(s) and contact information. They also include boxes to be checked, specifying the broker and licensee as either (a) buyer (or seller) agent, (b) buyer (or seller) agent with designated agency, (c) dual agent, or (d) transactional licensee. No further explanation was provided.
According to Pennsylvania’s standard Consumer Notice, a buyer (or seller agent) “works exclusively” for the buyer (or seller) and must act in the buyer’s (or seller’s) “best interest, including making a continuous and good faith effort” to find a property for the buyer (or find a buyer for the seller).
A dual agent works for both the seller and the buyer and may not take any action that is “adverse or detrimental to either party but must disclose known material defects about the property.”
Designated agency occurs when the broker of the selected real estate company “designates certain licensees within the company to act exclusively as the seller/landlord agent and other licensees within the company to act exclusively as the buyer/tenant agent in the transaction.” The broker, supervising all of its licensees, would be a dual agent, while its agents could represent the buyer or seller with designated agency.
As you can see, it can sometimes be tricky determining who exactly represents who, as well as what duties are owed to what parties by the agents involved in a transaction. The updated ASR adds language providing a simple explanation of who represents the buyer and who represents the seller.
5-Day Default Period for First Deposit
In response to the widespread use of digital signature technology and email delivery of contracts, the 2014 revisions to the ASR provided a simple means for allowing first deposits to be delivered after delivery of the signed contract (because you can digitally deliver documents, but you need to present the actual, physical check for a deposit—unless you wire funds). A blank was simply included, allowing the agents to specify how many days would be allowed for delivery of the first deposit.
Improving on the 2014 changes, this year’s changes provide a default of 5 days for delivery of the first deposit (in case the blank is left blank, which would have created uncertainty about due dates in the 2014 version).
Mortgage Contingencies
If a mortgage contingency is elected in the updated ASR, the broker for the seller will be explicitly permitted by the buyer to contact the mortgage lender for a status update on the mortgage application, including payment for and ordering of appraisal and credit reports.
The updated ASR also states that the buyer “must continue to make a good faith effort to obtain mortgage financing, even beyond the mortgage commitment date, until the seller terminates the Agreement. Only the seller has the right to terminate by virtue of tardiness on a mortgage commitment. Until the seller terminates, the buyer will unambiguously be required to continue efforts in good faith to obtain financing.
The mortgage contingency is usually the last domino to fall before the buyer is locked into either buying the home or forfeiting the deposit. It’s important for the seller to know that the buyer is actively working to secure financing, and these revisions will help prevent sellers from having their properties tied up by less-than-serious buyers.
Happy Mother’s Day
Whether it’s accomplished by getting dressed up in a silly outfit for a steeplechase, by attending a family brunch, by sending flowers, or even just by making a long overdue phone call, be sure to reach out to the mothers in your life this weekend.
Me? I’m cleaning out a garage. It’s not the typical Mother’s Day request, but it was the one received. It’s one of the last things I’d ever want to do this weekend. But it is exactly what I will be doing this weekend. And it’s the least I can do.
Whatever their flaws, whatever the fights, whatever the whatever, one thing remains constant: we wouldn’t be here without our mothers. Let yours know that you care, because there is little doubt that she cares about you.
This article was published by 21st Century Media and the Daily Local News (West Chester, PA). To read this article on the the newspaper’s site, please visit the Daily Local News.
To view all of Ryan Dosen’s 21st Century Media real estate columns, visit http://www.dailylocal.com/search?text=dosen.
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