Standard Forms: Not Always the Best!
Every trade, industry, and profession has its particular way of doing things and real estate is no exception. Rather than reinvent the wheel with every transaction, brokers, agents, and lawyers tend to work from a basic set of assumptions that are contained in uniform documents.
Standardized Real Estate Forms:
In theory and in practice there is something to be said for standardized forms. They save time, they’re efficient, and offers prepared with uniform documents are easy to compare and evaluate. But for all their value, standardized forms camouflage a significant number of problems.
Some Problems with Standard Real Estate Forms:
First, all real estate transactions are one-of-a-kind events: they involve people with different and opposing interests, unique properties, different jurisdictions, and economic conditions that are always in transition. Trying to fit all these diverse interests into a single, standardized contract form makes no more sense than requiring everyone in town to wear size 10 shoes.
Second, standardized forms have evolved into a kind of social and economic bludgeon. Buyers and sellers are told that “everybody” uses one form, that a particular document is “our standard agreement,” and “all the points you’ve raised are in the contract.” Such assertions are uncontested, not because they’re right or wrong, but because it’s impolite to argue. Our social training encourages us to be courteous and the result is that the need for personal acceptance dampens our drive for a good deal.
Third, the very idea of “standard” implies certain values. After all, if something is standard, are not alternate approaches “un-standard” or perhaps sub-standard? The answer in brief is “No.” The real issue concerns not what is “standard” but what is appropriate in a given transaction. If a standardized form works, fine. But if it needs to be modified, that’s okay too.
Fourth, in the current marketing system, standardized forms are treated with an awe and reverence usually reserved for sacred objects. They’re so “official” that all too often buyers and sellers believe such forms are also untouchable. No matter how imposing a form may look, it’s just a piece of paper, something that can be modified or amended at any point before both buyer and seller sign the document and close the deal.
Fifth, by signing standardized forms, buyers and sellers often bind themselves to a lengthy list of understandings and accommodations that have not been negotiated. For example, a form might divide the payment of realty sales taxes equally between buyer and seller even though such payments are totally negotiable. As a result, buyers and sellers may haggle over prices and terms for hours and then give up hundreds or perhaps thousands of dollars without any discussion, bargaining, or concessions, merely because of an obscure clause buried in the middle of a form document.
This Homebuyers Tip was excerpted from:
Successful Real Estate Negotiation by Peter G. Miller and Douglas M. Bregman, HarperCollins Publishers, Inc., 1994
ISBN # 0062732641