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're checking in with Becky Claggett and Edwin Rucker who are two members of our Sales Managers Advisory Committee, better known as SMAC. Becky and Edwin, thank you for joining me today on our very first episode of REINCheck.

Edwin Rucker [00:00:41] Thanks, Andrea. We're glad to be here.

Andrea Rice [00:00:43] Thank you. You know, and I was thinking, what should we pick as a topic for our first episode? And, of course, what is the topic that has dominated 2020, of course, COVID-19. So not only has dominated 2020, but it also highlights what SMAC does and really how they can react to a changing market rather quickly. So today we're going to talk a little bit about the DOVID-19 forms that you guys put out back in the beginning of March and or no, it was the end of March and beginning of April to address the pandemic. And I don't know about you guys, but for me, that time period in March, like mid-March, it was like, oh, we're sitting at work and we're just going about our business and COVID is this thing in the background. And then the next day it felt like we went from zero to 60 and all of a sudden it was this pandemic and what are we going to do?

Edwin Rucker [00:01:49] You're exactly right.

Andrea Rice [00:01:51] Yeah.

Becky Claggett [00:01:52] It did.

Andrea Rice [00:01:52] I remember very vividly now we're working from home. We're doing everything virtually. And, you know, SMAC had never met virtually before. And now that's all they're doing, right? And so, you guys met several times virtually and you were just really working hard to figure out what can we do to keep people doing business? Because at that time we didn't even know would people show property? Would people put their houses on the market? I mean, it was so unknown.

Becky Claggett [00:02:26] That's true. It was unprecedented. And we were hearing that our neighbors in Pennsylvania were completely shut down. They weren't allowed to do real estate per their governor. So, we were very fortunate that we were considered essential. It was a scary time.

Andrea Rice [00:02:39] Thank God that they were considered essential. And so out of that arose these three COVID-19 related forms. And the whole process of putting out a form, it's rather, you know, cumbersome. It doesn't happen overnight. But, you know, as a committee with the committee members, the attorneys, the board, I mean, really, these forms were turned out rather quickly so that people could continue doing business.

Edwin Rucker [00:03:08] Yeah, and considering the fact that we didn't, there's not a change to a form. This is a whole new creation.

Andrea Rice [00:03:13] Right, exactly from scratch. And really, there wasn't there weren't many people in the country doing these forms either. So, it was really unprecedented. But we have two forms that I want to start out with talking about, and that's the COVID-19 Addendum A and the COVID-19 Addendum B. And I feel like these are kind of two sides of the same coin. So, Becky, can you tell us a little bit about the COVID-19 A Addendum and just basically when would you use this form and how would it come into play?

Becky Claggett [00:03:49] Certainly, certainly. So, the COVID-19 A Addendum is its intended use is to be used with your initial offer or your initial purchase agreement as you're putting it together. The form itself defines some of the delays you might be up against, whether it's an inspector that can't get out there or whether it's somebody directly affected by COVID and has to go into quarantine and many other things. There's three choices in the body of the form. So, you have paragraph one, two, and three for your choices. Your buyers and sellers can elect to agree to all three choices or just one of the choices. So, each one I'm just going to talk about it briefly. The first paragraph, paragraph one, if you don't fill in the days, if you want more days or less days, you can adjust that. But if you by default, it's 15 days or whatever you agree to, that the parties are saying, gosh, we may have some anticipated delay. So, each party the contract gets 15 days. If they need it, it could be one, it could be the other, or it could be both. So, and it allows for any of those anticipated delays automatically. That's paragraph one. If everybody initials that, they're agreeing to that paragraph. Paragraph two, the same thing. You have the blank default days, this one defaults for 30 days, and it's again for 30 days, or as you agree. You could do it shorter, you could do it longer. What this one does is a little bit different because it has an auto termination in it. You get to five p.m. on that 30th day and your contract is automatically terminated for that extended date and the earnest money goes back to the buyer. So that's paragraph two. Again, you can agree to one and not two and three. You can agree to only two. Or you going to only three or any combination thereof. Paragraph three is just very generic for any more I'm going to say for more situational circumstances. Something that you and the other agent know about that the your parties want to agree to. And you can handwrite it in and make your own situation and have them agree to that. So, it's really a very useful form for anything you might come up against COVID and are able to give your people the extra time they might need if one of these situations occur. If nothing occurs, you can just cruise on to closing. We're seeing a lot less of these. How about you, Edwin?

Edwin Rucker [00:06:33] Yeah, I'm not seeing as many either. And, you know, it's with the fact that COVID is spreading I'm thinking these things will become more and more important.

Andrea Rice [00:06:41] Yeah, we don't know what we're going to be looking at as we move forward. So that brings us to COVID-19 Addendum B, which is a little bit different than the one Becky just talked about. Edwin can you tell us just a little bit about the 19 COVID-19 Addendum B?

Edwin Rucker [00:07:05] Sure, the COVID-19 Addendum B is intended to be used after a contract has been ratified when there was no COVID-19 Addendum A. And this particular form has several paragraphs. And it I think it's a little bit more detailed than the one that was intended for use with the initial writing of the contract. So, paragraph one has a few paragraphs and subparagraph A basically extends the general settlement date deadline by 15 days, or you can pick any other number of days that may be desired by the parties. Subparagraph B allows you to select specific issues. It might be a title report, might be a property inspection, might be an appraisal issue. But we try to come up with a laundry list of things that could happen, that might delay closing. And the buyer and seller can agree on which one of those they want to use to extend the closing if need be. And that's the other block to cover anything that is not already there in writing. And in the third paragraph, basically, it extends everything out to 30 days as far as the extension of the settlement date. And in subparagraph three, that particular paragraph basically allows you to agree to something that hasn't been covered in paragraphs one and two.

Andrea Rice [00:08:35] And I think the big takeaway there is this is for used with a previously ratified contract, so you can add this in, you know, as things come up, right? If you didn't have the A initially, you could use the addendum B as things come up. Is that correct?

Edwin Rucker [00:08:54] That's correct.

Andrea Rice [00:08:56] And do you see a lot of delays due to COVID right now or not so much?

Edwin Rucker [00:09:02] Well, you know, I'm not seeing as many of these I thought that I would see, you know, my agents are using them sparingly. And I notice from the cooperating brokers that submit contracts to us we see a few of them, but not as many as I think that we should be seeing, considering the nature of COVID itself.

Becky Claggett [00:09:22] Same here, we see very few. Yes.

Andrea Rice [00:09:27] All right and then that brings us to our last COVID-related form, and that is the COVID-19 Release and Hold Harmless Agreement. And pretty much that's to protect all the parties in the transaction, correct?

Edwin Rucker [00:09:42] Correct. And it could be a buyer, could be a seller, landlord, or a tenant, for that matter. Everybody should be using this form because you never know what may happen. Somebody may contract it coming into your house after someone else was there just for a few minutes and touch something. They touch the same thing and the next thing you know you're dealing with COVID. So, this particular form definitely protects the agents and the parties.

Becky Claggett [00:10:06] It also allows it's the person saying I'm volunteering voluntarily allowing these people to enter the property. So, your inspectors and your appraisers and everybody coming in, letting them know these people are going to be coming into this place and COVID could result from it in some way. And so, it's really a hold harmless and a really good idea to use this form as a customary practice. Our firm has adopted it to use on every with every buyer, every seller, every tenant, every landlord. And we just feel like it's a good risk management tool to meet any problems that could arise in the future. With that, some form, some brokers will have their own form, but we recommend you use something. And so, REIN's provided this for you.

Edwin Rucker [00:10:54] Definitely.

Andrea Rice [00:10:55] Yeah, and I think that's a good point. You know, these are optional forms, so you don't have to use them. But they are provided if it's something that your broker thinks is good for the company, then definitely check with your broker and see what they advise. They may already have these as a requirement for the firm, but again, these are optional REIN forms but definitely check with your broker to see what they recommend.

Becky Claggett [00:11:23] Yes. And your broker may check with their E&o attorney. Our E&o attorneys recommended that we use it consistently. We use the phrase from Ben Franklin where he said an ounce of prevention is worth a pound of cure.

Andrea Rice [00:11:36] Right.

Edwin Rucker [00:11:37] Yeah, definitely better be prepared for it than to find out something at the end of the deal.

Andrea Rice [00:11:43] I want to thank you guys, because, you know, SMAC does such an amazing job working on these forms, getting the changes out there, and particularly these COVID-19 forms. I feel like now that everyone's kind of settled into their new normal, it would be a good time to kind of go back and revisit them, and what is the need at this point during the pandemic? But, you know, a lot of things are so uncertain. We didn't know what would happen back in March when these were being created. And we've actually had a lot of new members join. So, you know, for those new members, this is a good introduction to these forms that they can talk to their broker about. Maybe they weren't aware of them before. But I also want to say, if anyone out there listening has any suggestions or comments for SMAC, please, please send them in. SMAC meets all year. They look at the different forms, contracts. As you can see, they create new forms, whatever is needed for the changing market. And there the list of current members is on REINMLS.com. You can also email SMAC@reininc.com to get into contact. And again, I want to thank you, Becky and Edwin, for sharing your time and your expertise today. Hopefully, this will be the first of many podcasts, but until next time, I'm your host, Andrea Rice, and I'm checking out. Thanks.

Edwin Rucker [00:13:14] Thank you.

Becky Claggett [00:13:15] Bye bye.

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VO [00:13:17] 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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