THE REVIEW REQUIREMENT FOR REAL ESTATE CONTRACTS
THE REVIEW REQUIREMENT FOR REAL ESTATE CONTRACTS
By Gary Isom, Arkansas Real Estate Commission, Executive Director
One of the advantages to consumers of using a licensed real estate agent in the sale or purchase of real estate is the assurance that their Real Estate Contract has been reviewed by a Principal Broker or Executive Broker prior to closing.
Consumers involved in a real estate transaction often interact only with the front line of the real estate firm, which in most cases is the Salesperson working with that particular consumer. What is not necessarily obvious in the typical real estate transaction is that a supervising broker must be in the background overseeing the Salesperson and the transaction.
Each Real Estate Firm has one Principal Broker who is generally responsible for all real estate business conducted by all other brokers and salespersons licensed with his or her firm. While Principal Brokers may delegate some of that authority and responsibility to Executive Brokers within their firm, the Principal Brokers cannot absolve themselves of the ultimate responsibility.
Only the Principal Broker or an Executive Broker designated by the Principal Broker may conduct the contract review. That Principal Broker or Executive Broker is required to sign the Real Estate Contract along with the Salesperson who worked directly with the buyer or seller. Each party to the transaction must receive a copy of the Sales Contract and any addendum related to the contract, which shows all required signatures, prior to closing. This ensures that the buyer or seller can determine who is ultimately responsible for the accuracy and completeness of their Sales Contract.
Occasionally, an Executive Broker will review Sales Contracts in which they personally worked directly with a buyer or seller. While not prohibited, this is not considered a “best practice” because the same agent who completed the contract has reviewed the contract. Any party to the transaction who would like to have a second set of eyes on the Real Estate Contract certainly may ask that the firm’s Principal Broker or a second Executive Broker review and sign the contract as well.
Through the real estate firm name, it is easy to determine the identity of the Principal Broker for any Salesperson. However, the usage of team names and personal logos which are used primarily for marketing purposes can sometimes make this difficult for consumers. With a quick call to the Real Estate Commission or by checking the licensee roster at the Commission’s website, www.arec.arkansas.gov, the consumer can determine who the Salesperson’s Principal Broker is. Please contact the Real Estate Commission at 501 683-8010 if you need further information.
House to House is distributed weekly by the Arkansas REALTORS® Association. For more information on homeownership in Arkansas, readers may visit www.ArkansasRealtors.com.
