Documents For Buyers
Explanation of the Documents You Will Need to Execute
(Not necessarily in any order)
DISCLOSURES / AGENCY / FEES
1. Agency Disclosure Form:
In Michigan, the Agency Disclosure Form is used to inform buyers and sellers about the agency relationship they have with their real estate agent. It explains whether the agent represents the buyer, seller, or both in a transaction, ensuring transparency and clarifying any potential conflicts of interest. This documents states that the agents listed on the document represent you.
2. Buyer Broker Agreement:
This agreement is a contract between a you and our brokerage. It outlines the terms of the buyer's engagement with the agent, including the agent's responsibilities, the duration of the agreement, and any compensation arrangements. It formalizes the relationship and can be exclusive or non-exclusive. Note: Unless stated otherwise, per the agreement, the compensation shall be paid by the Listing Broker.
3. Addendum to A Buyer Broker Agreement:
This document states that ONLY the designated agent(s) and the supervisory Broker directly represent you. Other agents in the firm DO NOT.
4. Administrative Processing Fee Disclosure:
States that our Broker, RE/MAX Bayshore, charges a flat $275 Administrative for handling paperwork. This fee is only payable at the closing of a sale. It is not charged unless there is a closing. This is not deemed a commission and I’m afraid we cannot waive this fee or my team would.
5. Affiliated Business Arrangement:
This document is required whenever your agent has ANY affiliation with any service provider. In this case, Team Leader, Jules Yates trough his corporation, has a minor interest in Traverse City Lights (DBA Searchlight Title).
1. Purchase Agreement:
The Purchase Agreement is a legally binding contract that outlines the terms and conditions of a real estate transaction in Michigan. It includes details such as the purchase price, financing terms, contingencies, and the timeline for the sale. Once signed by both the buyer and seller, it initiates the closing process.
2. Seller's Disclosure Form:
In Michigan, the Seller's Disclosure Form is a document that requires the seller to disclose known (key word… known) material defects and issues with the property. This form helps the buyer make an informed decision about the purchase by providing information about the property's condition.
3. Lead-Based Paint Acknowledgment / Disclosure:
The Lead-Based Paint Acknowledgment is a federal requirement in real estate transactions involving properties built before 1978. This form informs buyers about the potential presence of lead-based paint in the property and provides information on the associated risks. Buyers are given a 10-day window to conduct a lead inspection if desired.
If built after 1978 there is. Simply a disclosure of the year built and acknowledgment that Lead Based Pain does not exist.
An escalation clause is a provision in a purchase offer that allows a buyer to automatically increase their offer price in response to competing offers. It's used in competitive real estate markets to make sure the buyer's offer remains competitive without the need for constant back-and-forth negotiations.
Here's how it typically works:
1. Base Offer: The buyer starts with their initial offer, which is the "base offer." This is the minimum price you are willing to pay for the property.
2. Escalation Amount: The escalation clause includes an "escalation amount," which is the fixed increment by which the buyer is willing to increase their offer over competing offers.
3. Capped (Cap) Price: The clause also specifies a "capped price" or the maximum amount the buyer is willing to pay for the property. The escalation amount is added to the highest competing offer, but it cannot exceed the ceiling price. If written uncapped, there is no maximum price stated however, the Seller must counter offer the higher price and you will have to agree to it in writing.
4. Competing Offers: When the seller receives multiple offers, the escalation clause comes into play. If a competing offer is submitted, the escalation clause automatically increases the buyer's offer by the specified escalation amount above the highest competing offer, up to the ceiling price. IF the escalation is triggered, the listing agent will be required to provide a copy of the next highest offer that triggered the escalated price.
5. Winning Bid: The buyer's offer with the escalation clause will only increase if there is a competing offer that triggers it. If the buyer's offer is already the highest, it remains at the base offer price. The winning bid is not finalized until the Buyer signs the counter offer at the escalated price.
The purpose of the escalation clause is to help the buyer secure the property while avoiding overpaying. It ensures that the buyer's offer remains competitive without revealing their maximum willingness to pay upfront.
- J Hansen