Accordingly, I don't find the "dissuade legal action and further minimize their risk/costs after the transfer of title" argument convincing. The clause determines who picks up the tab, not whether someone will raise a claim.
As for my being ready, well, I've laid my cash offer on the table--and very close to what Cartus asked. If that isn't real enough, I have no problem walking away--especially in this market. But this Cartus deal may have yet another twist to it yet. You may see a separate posting down the road apiece.
As for my postings on this issue, all I can say is that it has been great fun. I guess I just like analyzing an issue. The feedback as well as the discipline of having to write things out has been invaluable. In a way it has prepared me for the next negotiation. So, thank you, Trulia.
Thank you for your answers.
To sum things up, it seems that when dealing with Cartus, a buyer should measure the Cartus contract against the local realtors' association contract. The difference between the provisions of each is an important buyer beware zone. Thar there be deal breakers.
For me it was asking the buyer to indemnify and hold harmless Cartus and all prior owners for any costs incurred (including attorneys' fees) if a claim were raised at any point in time after closing. I suspect that many sign without realizing or being fully informed of the risk they are taking on.
It seems to be a classic case of overreaching. Buying something "as is" is one thing; requiring an average buyer to "indemnify and hold harmless" a corporation and all prior owners is another. It turns that buyer into an insurance provider--for all time and for free. This is not a deal.
No question that you were ready, and more to the point â€˜willing.â€™ Iâ€™d also love to hear more about the twist and details via e-mail again. Always looking to add to the experience my clients have working for them by learning more and more about what is happening in the market right now. Thank you for taking advantage of what Trulia has to offer. Love it when the community can show so much value to the contributors.
What does your REALTOR say? Are you represented or not?
Here's my take..... if you were my client and presented with this contract from Cartus or any other "seller" I would bring you to an attorney so they could craft a legal response. You are absolutely correct in being concerned about "Hold Harmless" and "Forever". What if no one knew and 3 years down the road it comes to light there is methane seeping under YOUR property causing the neighborhood to be evacuated for an extended time period - who pays, do you?
Yes, the seller provides a Natural Hazard Disclsoure, but does that company include local data - some don't.
Unless you MUST have THIS house, take your cash offer and move on - it's a buyer's market.
Best of luck and please let us know how this turns out.
Broker / Owner & Certified HAFA Specialist
Thom Colby Properties
Newport Beach, CA
Moving Lives Forward (TM)
We NEVER DOUBLE-END a Transaction in our Brokerage as it is not beneficial to the Seller or the Buyer, but only to the Agent.
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Again, if you can find the risk satisfactory, you can take advantage of the situation and see your risk rewarded by encouraging a â€˜national reactionâ€™ from the big relocation companies (as opposed to the local knowledge of you and your realtor); allowing for you to purchase a home well below market value.
After all, once you have found a home you love, isnâ€™t that the protection you are looking for in todayâ€™s market?
Hoping to help you take advantage of the market â€“ when you are ready.
(615)714-7918 | firstname.lastname@example.org
Thank you for your response. You raised the interesting issue of inspection. I have some additional observations about that.
Cartus itself performs no inspections. The disclosure statement it provides is a blank form with "Seller is a non-occupant owner and has no knowledge of this property" stamped on every page.
With respect to radon, the disclosure documents include a radon inspection/remediation plan. If the inspection is performed after closing, the inspection is free. If the inspection is performed before closing, the inspection is done at buyerâ€™s expense. The remediation service is free in the case of the former. I believe that the remediation service is also free in the case of the latter, but I am not sure. Both appear to involve a radon testing device that is mailed to the buyer.
With respect to â€œSubstancesâ€ other than radon, the Cartus contract advises that the buyer monitor the federal and state environmental protection agencies and cites the URL of the EPA.
The Cartus contract allows 10 days for the Buyer to do an inspection and send the results to Cartus, otherwise, Buyerâ€™s right to inspect and request repair is waived. Although radon is mentioned as one of the subjects of such an inspection, I am not sure how the radon inspection/remediation offer fits with the passages in the Cartus contract that deal with inspection.
All this seems harmless enough in and of itself. Remember, however, that even though the Cartus contract specifically states that all Cartusâ€™ obligations cease with conveyance of title, the buyerâ€™s obligation to indemnify and hold harmless (including attorneyâ€™s fees) Cartus and all prior owners should a claim be raised does not. It continues, as far as I can tell, forever.
This seems to put things in a different light. Certainly, accepting the Cartus radon inspection/remediation offer is now a must--even thought the buyer is responsible for the proper use of the mail-in collection device. Beyond that, however, just how far should the Buyer go in paying--whether before or after the inspection period--for a full environmental scan, monitoring the environmental protection websites and taking any remedial actions that they might suggest, regardless of how expensive or impractical those actions might be? I canâ€™t help worrying that the buyer will only know the answer to that question after the fact, i.e., after a claim is raised.
Again, it seems odd that the buyerâ€”a non-occupant non-owner who is even less knowledgeable than Cartus about the condition of the propertyâ€”should be asked to assume such risk. Shouldnâ€™t it be enough that Cartus conveys the property â€œas isâ€ and as a â€œnon-occupant owner and has no knowledge of this property"?
Any relocation company is going to have a contract heavily slanted in their favor. To the point of being ridiculous. The relo. company has never lived in the home nor do they have any in-depth knowledge other than inspections they have done (usually home inspection and radon inspection). Therefore they don't want to be held liable for something they could not have known about the home.
You as the buyer have the right to test for anything that may concern you such as radon and mold. They just want you to satisfy yourself (at your expense and prior to settlement) on anything that might be of concern to you.
The kicker, you have to sign their contract if you want that house. There is no benefit to you, it's all about them darn it! Hope you get your dream home and there are no problems.
I'm sure there are supervisors and such who you might be able to reach out to, but in RELO transactions typically there is one point person who acts as the go-between with the listing agent and the decision maker. Buyer's agents and buyers themselves should never have contact with the Relocation firm during the normal course of business. Because they have representation via a listing agent, they might actually require that all correspondence go through that person.
And yes, TAR is the Tennessee Association of Realtors. We have a basic, 9 page fill-in-the-blank Purchase & Sale Agreement that we use for most transactions. Builders and banks are typically the exception to the rule as builders usually have their own, protective contract. But more and more banks are going with our TAR contract. They'll typically have specific Disclosures, Addenda, and Disclaimers that are required to be attached. This is the normal protocol for RELO companies too (except with Cartus it seems).
"As is" seems OK. "Indemnify and hold harmless" (for all time?) is the the deal breaker.
I find your comment about Cartus being one of the few relocation companies not to use the TAR (TN Association of Realtors?) agreement revealing. It gives me greater insight into the problem.
When I did submit a modified version of their contract, it seemed to be rejected out of hand. It made me wonder whether the person at Cartus had any authority to evaluate the situation and see that they had a very good cash offer that would take the property off their hands almost immediately.
Or does that person even exist? I was reminded of car salesman who have to clear an offer with their managers, i.e., walk around the corner and get a drink at the water cooler. It seems that the message is just not getting through to the person in Danbury (?) who needs to hear it.
With any transaction, the seller (listing agent, RELO company, etc) is required by law to disclose any "known defects" affecting a property. You always have recourse if you can prove that they had "actual knowledge" of the problem but didn't disclose. Of course that is pretty hard to prove...
Cartus is one of the oldest and largest RELO companies in America. They're a little old-fashioned which can be a pain, but they are in the business of selling as many properties as possible and they have a good track record. The course of a normal sale in this area on regular Tennessee Association of Realtor contracts would more than likely have similar language included on the "Disclaimer Notice" and/or on the "Mold/Mildew Disclosure".
I agree that a good inspection would reduce the risk. As for relying on the disclosures made by Cartus, there is little chance of that. Each page is stamped with the phrase, "Seller is a non-occupant owner and has no knowledge regarding this property."
However, i don't see how that would reduce the additional liability imposed by such a contract should a problem arise within the scope of the of Cartus definition of "substances." The question seemed to come down to one of insurance. Should Cartus bear the cost of insuring itself or should I insure them by agreeing to the indemnity clause? And if I agree to the clause, am I sufficiently insured myself--or can I be insured--against the additional liability imposed by that clause (I note the passages that refer to claims that are merely "raised" and to "attorney's fees")?
It seemed to down to a question of what is reasonable and what is overreaching with respect to an average buyer like me (corporate sales may be another matter). I thought that I had found a pretty good answer when I compared the Cartus contract with the standard state realtors' association contract (all provisions). It made me feel that there was much for the buyer to beware.
I may try your idea of being the persistent only buyer, but, on the other hand, I will probably take my cash offer and walk. The whole thing reminds me too much of that 60's TV show "Lost in Space" (or was it "Lost in Real Estate"): "Danger, Will Robinson, Danger."
Thanks again for your answer.
These statements are heavily in favor of the relocation company (to be fair: not just Cartus) because they want the sale to be the last interaction they have on the property. From their side of the equsion, they are risking huge amounts of money to buy and sell these homes. That being said, you are right to review the document and make attempts to replace clauses that you do not feel comfortable signing - please consult an experienced, local real estate attorney - especially if you are the only offer/interested party involved on the house (this may give you more leverage).
In practice, my feeling is to inspect the home to the best of your ability. Be extra cautious, and try not to rely on disclosure. Spending twice the normal amount of time and money on evaluation of the home might still be wiser than reviewing the relocation inspections that are provided. Does that make sense?
Hoping to help you take advantage of the market â€“ when you are ready.
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