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.
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.
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 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 “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 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. Yet 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 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
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