Standard Forms - Not Always 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.
In theory and in practice there is something to be said for standardized forms.
They save time, theyre 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.
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 those 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
youve raised are in the contract. Such assertions are uncontested, not
because theyre right or wrong, but because its 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 unstandard or perhaps
substandard? 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 thats okay
Fourth, in the current marketing system standardized forms are treated with an awe and
reverence usually reserved for sacred objects. Theyre so official
that all too often buyers and sellers believe such forms are also untouchable. Yet
no matter how imposing a form may look, its 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 from 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