By Anita R. Burt, Consumer Protection Officer
Consumer complaints reveal that the improper and inappropriate use of pre-printed offer to purchase forms frequently causes sales transactions to go awry. In addition, failure to use a proper offer to purchase form, or the use of a form for inappropriate purposes, may result in disciplinary action by the Real Estate Commission.
The first problem arises when an agent uses an offer to purchase form which does not comply with Commission rules. Commission Rule A .0112 sets forth eighteen (18) specific provisions which must be included in pre-printed offer to purchase forms and several provisions which must not be present, including any provision concerning the payment of a commission or compensation to any broker, salesman or firm; and any provision that attempts to disclaim the liability of brokers and salesmen for their representations in connection with transactions.
A second problem arises when an otherwise acceptable offer to purchase form is used for an inappropriate purpose. Although forms which comply with Al of the provisions of Rule A .0112 are usually appropriate for "straight-forward" transactions in which the prospective buyer intends to purchase an consisting property, they would not be appropriate for use in Al real estate transactions. It is for this reason that the instruction sheet for the "standard offer to purchase form" (i.e, 1987 Standard Form # 2 jointly approved by the North Carolina Bar Association and the North Carolina Association of REALTORS®, Inc.) states that
"This form may be used in a variety of real estate sales transactions, but it was developed primarily for use in the sale of existing single-family residential properties. Do not use this form as a substitute for an option contract, lease-option, lease-option agreement, lease-purchase agreement, or installment land (land sales) contract. Also, if a sale involves the construction (or completion of construction) of a new single-family dwelling, have an attorney draft an appropriate contract."
Licensees who are members of the North Carolina Association of REALTORS® have sevens "special-purpose" pre-printed addenda available for their use, including addenda which may be attached to the Standard Form # 2 in transactions involving new construction and the sale of property which is contingent upon the buyer selling his presently-owned property; however, these addenda should not be attached to other contract forms, nor should any alterations be made to these addenda.
Real estate brokers and salesmen are, of course, only authorized to fill in the blanks of preprinted forms. In those situations where preprinted forms and addenda do not address all of the terms and conditions of the real estate transaction, a licensed attorney should be consulted to prepare any special provisions.
In summary, before proposing the use of a preprinted offer or contra form, the agent should determine whether the prospective purchaser's objective is consistent with the purpose of the form. And if the agent is uncertain as to the appropriateness of a pre-printed form for any particular transaction, or the buyer wishes to have special provisions included in his or her offer, the agent should refer the prospective purchaser to his or her own attorney for assistance in drafting an appropriate offer.