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An Agreement of Sale to purchase a home is a promise between a buyer and seller memorialized in writing. The Agreement is made up of terms and conditions. Weak or ambiguous terms and conditions turn into trust and hope. I call this the Trust Agreement.

A home is often the most valuable thing a person owns. When they desire to sell it, there is much to consider. Where am I going, how will I get there, how much will I get for my home, and the list goes on. The one thing they tend no to think about is what the terms and conditions of the home sale will be.

Most people are more enamored with wanting to know how much their home will sell for than understanding the minutia of a deal. The truth is their home won't sell for anything unless the terms and conditions are reasonable and satisfied by all parties.

Over the years I have seen a steady erosion in the quality of the terms and conditions in our local real estate deals. I believe this erosion is due to suppressed home values in the Berks County market. This suppression in value causes sellers to focus more on getting the best price they can leading them to consider just about any terms as long as they get a reasonable price for their home.

Many of the agreements I receive on behalf of my seller clients look something like this: $1,000 deposit, 6% seller credit to the buyer, FHA financing, home inspection contingencies, a mortgage pre-approval letter, and mortgage contingency. I have a term for these types of agreements. I call them a "Trust Agreement" because it takes a lot of trust and hope on behalf of the seller to accept them.

Low escrow deposits mean there is little or no equitable recourse if a buyer does not honor the agreement. With today's privacy laws it's hard, if not impossible, to get up to date information on the status of a buyer's mortgage and preapproval letters are often not more than a file filler. The large seller credit and FHA mortgage often tell the story of buyers who do not have an abundance of resources to put towards the purchase. These issues all lead to the trust part.

In January 2014, I wrote an article titled "Where Has the Deposit Money Gone?" Visit my website to read the full article.

When a trust agreement is handled correctly and comprehensively understood they can be a good thing. I counsel my home sellers on how and what to do when faced with a situation where the terms and conditions are weak. Much of the counseling has to do with the timing and how it affects where they are going and the most efficient way to get there.

It goes without saying that no matter what the terms and conditions of a home sales agreement are it pays to have a knowledgeable agent on your side. This is especially true when it comes to stretching the boundaries of your trust and hopes with a trust agreement.

Knowledge is Power!

Jeffrey C. Hogue