REINCheck

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VO [00:00:06] You're listening to REINCheck with Andrea Rice, Contracts and Industry Specialist at REIN, where you get the latest member news and information delivered straight from the source, REIN MLS.

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Andrea Rice [00:00:19] Hello and welcome to REINCheck. I am your host, Andrea Rice, and today we are checking in with longtime Sales Managers Advisory Committee member Tanya Monroe to discuss some recent changes to paragraph 11 of the standard purchase agreement. Tanya, thank you so much for taking time out of your busy schedule to be here today.

Tanya Monroe [00:00:40] Thank you, Andrea. Always. This is an exciting time and happy New Year.

Andrea Rice [00:00:46] Yes, hopefully, a good kick to 2022. You're our first guest of season two of the New Year, so thank you.

Tanya Monroe [00:00:54] You're welcome.

Andrea Rice [00:00:55] And I want to talk today about something that was a big discussion in SMAC at the last half of 2021. And I jokingly refer to this as much ado about nothing.

Tanya Monroe [00:01:10] That's a good one.

Andrea Rice [00:01:12] Not because it's a non-issue. It definitely was a real issue. But because all of the discussions centered around a small blank line. So to see how we got here, let's start all the way back at the beginning, our July 2021 form revisions included a complete overhaul of paragraph 11 of the standard purchase agreement, which is the financing section of the contract, and Tanya is a long-standing member, SMAC and someone who has been a part of many, many form updates, can you start by sharing the reason behind the July 2021 changes to the purchase?

Tanya Monroe [00:01:47] Sure. Well, in July we were reworking, our SMAC members, the financing section because we really wanted to clarify the appraised value. And so looking at that, we reworked everything and at that time felt that the blank line wasn't necessary because we wanted to focus on the purchase price. So we removed it and replaced it with words, purchase price, to eliminate some of the errors that we were seeing agents going back and forth not updating what was in the blank line, which would have been the correct purchase price.

Andrea Rice [00:02:28] Right. So that complete overhaul was an example of SMAC listening to members seeing where a change could help our members because, you know, sometimes that blank line was getting missed. So that's why the change was made. Updates were made and released in July of 2021. Then in late July, I would say more August, all through August, that's when the calls started coming in. And

Tanya Monroe [00:02:56] I agree.

Andrea Rice [00:02:58] I was getting calls. I know you were getting calls.

Tanya Monroe [00:03:00] Yeah.

Andrea Rice [00:03:01] Emails. All the members of SMAC were getting calls, but they weren't complaints about the language or how the paragraph was updated, per se. All of the calls were about removing that blank line for purchase price and replacing it with the words purchase price. Tell us a little bit about that.

Tanya Monroe [00:03:20] OK. And you are correct. The calls were coming in. There's no legal issue with removing the line. So we were OK there. But with the calls coming in, replacing it with the word purchase price, this change caused a few issues for our lending partners. And basically, as a former lender, I can tell you there is what we call the amendatory clause that's required by FHA. And this clause states that when you go into a contract that the buyer has this amendatory clause which indicates what it should be the purchase price. So with that, taking out that little line cost the lenders to require that we do a separate amendatory clause to the contract. So it added some additional necessary work based on what FHA requires.

Andrea Rice [00:04:26] OK. Yeah. So that's what we were hearing. And, you know, after that became apparent that there was that additional work being required, the issue made its way back to SMAC and there was a lot of discussion over the next several meetings. I will say this was probably on the agenda every single meeting for the rest of 2021. Because we wanted to really make sure we got it right. What can you say about that?

Tanya Monroe [00:04:57] Well, you're exactly right. It did come back several times and there was a lot of discussions about it. But one of the things that being a SMAC member I'm very proud of is that SMAC is very thoughtful in weighing in on things that we need to listen to all of the comments, the feedback that comes in. So in this case, weighing in on the option of adding the blank line back, and ultimately the decision was made to add the blank back to eliminate the need for additional lender-required amendments and to make the process easier for not only the lenders but the agents as well.

Andrea Rice [00:05:44] Yeah. And you know, I think that really speaks to SMAC's ability to listen to and respond to member needs and to pivot relatively quickly. I mean, this change where the line was removed in July, we heard the feedback, we considered it, and then January 3rd an update was made where that line was added back in. So as far as forms go and how processes work, I would say that's relatively fast.

Tanya Monroe [00:06:19] I would agree. It's very fast. And again, it just shows how we pivot, how we listen, which is critical to what's going on in our marketplace, particularly with the contract forms. So we did listen, and it was great because the lenders, as soon as we had some conversations that it would go back January one, I had so many emails from several of my lending partners like, Oh, thank goodness. You guys listen. That saves us another step. We don't have our agents to get this amendatory clause done. So this is always showing that things can change. It evolves, and we're up for it. SMAC made that change.

Andrea Rice [00:07:08] Yes, yes. Thank you. And you know, I really wanted to share this story because I feel like it gives people a little, you know, peek behind the curtain, if you will, about how SMAC works, about how it is important if you're having issues with anything forms related, bring it forward. You know, we'll consider it. Maybe other people are having the same issue and they're just not reporting it. So if you have any concerns, just let us know. And do you have anything else that you would like to add as a parting thought or tips for our members before we sign off?

Tanya Monroe [00:07:48] Sure. One tip since we've added back what we call the small blank, we ask all of our agents to make sure that when you're putting in the value for the purchase price, that it does match the purchase price, which is indicated on page one. So you don't have to go back and forth with a change. So this has made the lenders happy. So what we need to do as agents is do our part and make sure that we completely fill in that small blank correctly. And it becomes what? A win-win for everybody.

Andrea Rice [00:08:30] Yes. Yes, indeed. Thank you, Tanya. Thank you so much for being here today and sharing all this great information and being a part of our season two episode one of REINCheck. I want to thank you and thank all of you out there for listening. If you've missed any of our previous episodes, I do invite you to go to REINMLS.com/podcast and take a listen. And if you have not done so already, please sign up for REINCheck so that you can get new episodes delivered directly to you when they are released. And as always, if you have any suggestions for our Sales Managers Advisory Committee or Property Managers Advisory Committee, you can submit those to SMAC@reininc.com. Thank you, and have a great rest of your day.

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VO [00:09:16] You've been listening to REINCheck with Andrea Rice. Stay in the know from those who know. Delivered straight from the source, REIN MLS.

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