Realtor® Legal Tip – (1) Educate the Buyer and minimize liability, and (2) things to remember when using dotloop, docusign and other electronic signature tools
October 16, 2018
Author: Curtis Bullock
Here’s a real life case. Suppose your Buyer closes on a new home that is adjacent to a large parcel of vacant land. A couple weeks after closing, the new home owner gets a knock on the door from the adjacent land owner who happens to be a builder/developer. He politely informs the new home owner that her fence running along the entire southern part of the lot is in the wrong location and is encroaching on his land by 10 feet and that the fence needs to be moved. New homes will be built on the land as it is going to be developed. Suppose you receive a frantic call from your Buyer client who is upset that her back yard will be cut in half and wonders what to do now.
What document is so important for you to have?
The Buyer Due Diligence Checklist.
This form helps educate the buyer on important due diligence items like boundary issues and surveys. It also alerts the buyer to a variety of other inspection items to consider during the due diligence phase of the transaction.
But is it good enough to simply send this form to your buyer to have them sign electronically? Probably not.
Electronic signatures are a great way to simplify the transaction and a great way to get signatures. But there are some things to consider. One of the disadvantages of using electronic signature platforms is that clients tend to scroll down the forms and not read anything. With this form in particular, take a few extra minutes and advise your buyer about the importance of doing a thorough inspection and to read over the Buyer Due Diligence Checklist. This will not only help the buyer better understand the process but will also reduce liability for you. This form has been successfully used to defend brokerages on situations similar to the case above.
One other question – if your client asks you if the fence is in the correct location, what should you say?