Did you know that in Costa Rica, the contract to buy and sell real estate is just two pages long? In fact, it’s not even written by a real estate agent. All contracts in Costa Rica must be written by an attorney and it is quite an easy and painless transaction.
In Australia, the contract to buy and sell real estate is a generally a three-page contract. They don’t even do inspections in Australia. They do a walk through, meaning the buyers walk through the house and if it looks good, then they buy it. There is no inspection period, inspection notice, resolution, and the endless stream of paperwork that we have here in the US.
In Colorado, which may be one of the worst states in the country for excessive real estate paperwork, we have a 15-page contract to buy and sell real estate. But that is just the tip of the iceberg. By the time you put a home under contract, including things like disclosures, inspection notices, amendments, addendums and other documents, you could sign well over two to three dozen different documents. Why? What is our problem? Why can’t we make this an easy transaction like our foreign friends?
The answer is twofold: 1) We live in an incredibly litigious society (we love to sue each other) and 2) No one trusts anyone. Just last month, I was negotiating an inspection objection when the listing agent said to me, “Why won’t your buyers just take our word for it?” I laughed and thought to myself, “Because my buyers don’t trust you or anyone else for that matter.” I was working with another agent on closing one of my listings and his buyers objected to just about everything you could object to in the real estate contract. They objected to title, to inspection, to CIC’s, to survey, and would have objected to due diligence documents had we had any to provide. In fact, I am pretty sure these folks would not be able to go through the Burger King drive through without a team of lawyers and a week of research.
So what is the solution? How we do we make this process better? It seems as though we just keep adding more and more legal documents every year for buyers and sellers to sign. When is it too much? I can’t imagine that we can continue to legislate every possible circumstance that COULD go wrong in a real estate contract? I would love to hear your suggestions and I will print the best ideas in my column next.
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