Here is a problem I've seen more than a few times over my many years representing REALTORS®. A "special" clause in the Agreement of Sale states that "Seller will leave the refrigerator." At the pre-settlement walk-through the buyer is aghast to see, not the late model side-by-side with water and ice dispenser, but instead that loud, '60s vintage beast of a refrigerator that was in the basement! Most of us understand what was intended, and as judges, we would have no difficulty finding in favor of the buyer: the good refrigerator comes back, the old one goes.
These problems are avoidable. The preprinted language in the Agreement of Sale may be too wordy, but it is clear. When a REALTOR® picks up a pen and writes a term of the contract, it should be equally as clear; identify the refrigerator that remains. Go overboard with clarity to assure that there can be no dispute.
Courts will only go so far in seeking to determine the intent of the parties. Ambiguous provisions will be construed against the entity that drafted the language. A buyer's agent who misdrafts a provision will cause harm to the buyer; likewise, the seller's agent can do harm to the seller. The problem doesn't end there as the parties themselves will turn to their respective agent who may ultimately be on the hook. Be clear!
Still doing BPOs?
We may never be rid of the term BPO, but in Pennsylvania they don't exist! An opinion of value will either be an appraisal or a CMA, whatever label appears on the paper or whatever name we give it. Call it a BPO, but upon analysis, it either qualifies as a CMA or an appraisal.
Any opinion of value that is not a CMA is automatically an appraisal! A CMA may be performed by a broker or salesperson provided the statutory notice appears first, and further provided that it was prepared for either a buyer to determine the amount of an offer, or for seller as part of a listing presentation for the purpose of securing the listing and determining the list price. If the opinion is offered to a mortgage company or bank with no hope of securing the listing, then it doesn't qualify as a CMA. If it is not a CMA, what is an opinion of value? It is an appraisal. You better have an appraisal certification and put it in the proper reporting form!
Call it whatever you will, a BPO is either going to look like an appraisal that's performed by a certified appraiser, or it will take on the appearance of a CMA with the mandatory language and performed only for buyers to help with making an offer or to sellers for the purpose of securing the listing and determining a list price.
Copyright © Brett M. Woodburn, Esquire, CALDWELL & KEARNS, P.C., 2008
All Rights Reserved
Jim Goldsmith is an attorney with Caldwell & Kearns and serves as general counsel to PAR. A substantial portion of his practice is dedicated to providing advice and counsel to real estate licensees. He and his firm represent and defend real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. Jim also defends REALTORS® in disciplinary hearings conducted by the Real Estate Commission. He routinely counsels employers on employee relations issues and is one of the voices of the PAR Legal Hotline. He may be reached at www.realcompliance.com.