December 21st - 2014

Helping your clients deal with form overload

Real estate transactions involve pages and pages of forms, and a key part of your job is to help consumers navigate their way through them.

Woman sits at piled desk

Woman sits at piled desk

Helping your clients deal with form overload

Real estate transactions involve pages and pages of forms, and a key part of your job is to help consumers navigate their way through them.

These forms can be complicated and full of legal language, resulting in “form fatigue” or “form overload” for the public. Several REALTORS® share their ideas about how to help people wade through the paperwork and understand it all before they sign anything.  

“It’s important for us to explain all forms and clauses to our buyers and sellers because these documents are binding legal contracts,” says Valerie Miles of Bancroft, who has worked in real estate for 14 years. “Consumers must understand what they’re signing.”

Consider the knowledge base

Tailor your approach to your clients or customers and their level of knowledge, Miles suggests. “Some people have bought and sold lots of real estate, understand the ‘legalese’ and are comfortable with the forms, so they just want to know where to sign. Others are less familiar with the forms and are scared by them. In either case, I take the time to go through the documents and explain things carefully.” 

“The best approach is to keep it simple,” says John Oddi, an OREA director and Brantford REALTOR® with 30 years of experience. “Most people are concerned with the clauses we insert into the forms. I break down the clauses and condense the information for my clients. I go at my client’s speed, staying in their comfort zone.” 

Terms and conditions within the Agreement of Purchase and Sale (APS) must be reviewed carefully with buyers and sellers, says Shalini Bahadur, a Thornhill REALTOR®. Salespeople new to real estate should make sure they understand all language in the forms thoroughly or seek guidance from their manager or colleagues, she says. “It’s also important and required that we explain to people early on in the process the different types of agency relationships and other service alternatives available to consumers in real estate transactions,” adds Bahadur.

Prepare them for volume 

Warn people to be prepared for the volume of paperwork, says Miles. “If they’re forewarned, they won’t feel overwhelmed. I give them a big heads up. I tell them that we’ll be going through a number of documents and that each of these pages is there for a reason.”    

Modern technology can help save time and travel in conveying forms since many details can be handled remotely. “If the client is out of town, we’ll email or talk by phone,” says Oddi. Similarly, Miles deals mainly with cottage- or land owners who live elsewhere. Due to the geographic challenges of her market, she handles 75 per cent of her transactions by email. 

However, the negotiating phase is best done face to face, according to Bahadur, who works in Toronto. “I find it faster and easier to negotiate in person and perhaps reach a deal the same day, which keeps my clients happy. Using email can mean that this part of the process drags on for several days. On the other hand, negotiations and differences can often be resolved within an hour or two when we’re face to face.”

The most important form

Many real estate professionals say the APS is complex to explain. “The APS is the most important form and it’s very involved,” says Oddi. “This is the form that says we’d like to buy the house on Main Street, what we’re offering and the conditions. Are the fridge and stove included? How much time before we learn if the seller accepts? I spend the most time on the clauses, both the pre-printed and those added into the schedule such as conditions and warranties, because it’s vital that the client understands them.”

The conditions and schedules on the APS are where Miles spends the most time, since “these are the important parts for the consumer. I also suggest they may need legal or accounting counsel as part of the process, such as to understand what happens on closing.”  

Buyer representation

The Buyer Representation Agreement (BRA) can also be difficult to explain to consumers. Oddi says he explains its main purpose as required so that consumers understand this form completely before signing it. This document specifies that the buyer agrees to work exclusively with a specific brokerage for a defined period to find a property.   

Don’t procrastinate

Some forms can be tackled early on in the process, says OREA instructor Nancy Bloom, a REALTOR® with 27 years of experience. For instance, you may want to ask consumers for identification to comply with FINTRAC rules at your earliest meetings or even during the listing process instead of doing it during the offer process, she suggests. Similarly, the BRA should be signed by your buyers as soon as possible rather than waiting until the offer stage. Getting these documents done earlier cuts down on the amount of paperwork when an offer is being prepared, and it gets some of the necessary forms out of the way early on, says Bloom. “Otherwise, your clients will feel bombarded with paper when you’re preparing an offer.”

First things first

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For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246