Tips For Writing Great Contracts

I had a closing today where I represented the buyer. We asked for a home warranty to be included at no cost to the buyer and at a cost of no more than $500. So, we got to the closing table and as I looked over the settlement statement I saw that there was a warranty on the statement, but, it was for $319.

I always order my warranties the day of closing and had done so today just about 2 hours before the closing and I knew that the one that I had ordered for my buyer cost $469 and was more comprehensive than the one that was on the settlement statement. While the buyers, sellers, closing attorney and both of us agents were sitting at the table, I said:

"I believe that this is the wrong warranty. I ordered the comprehensive warranty which was $469 dollars." The listing agent spoke up loudly and proudly and proclaimed "Well, the contract said up to $500 so I ordered the less expensive one and since I ordered it first, mine trumps yours!"

Ha! Not so fast...You see when you are writing offers it's always important to provide directions in clear and concise detail which, in this case, I included. I always include this language because of this exact situation. In the contract, I added "to be ordered by the selling agent" (that's me).

So, right after she so proudly proclaimed how she had saved her sellers $150 in front of everyone, I quietly explained to her and everyone at the table that in fact the more expensive and more comprehensive warranty, which I ordered would in fact be the warranty that the sellers would buy for my buyers.

Now, this may not seem like a big deal, but, when you are sitting at the closing table and all eyes are on you, it's nice to know that your agent has added in language that protects you. It turns out that she intentionally tried to order the least expensive warranty because she was trying to do good by her clients. Good for her. So, protect yourself in your contracts in scenarios like this by defining clearly how the process will work. I have to admit, I was a little embarrassed for her at that moment, but, at the end of the day, I did right by my client and that was more important.

Do you have any scenarios or other suggestions of little tidbits or contract language that you would like to share? Please post it in the comments below.

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