July 22nd, 2019 at 11:04 am

Question: Let’s say that we were the agent in a sales transaction. Right after close of escrow, we discover that we failed to get certain documents signed by the buyer or seller. Should we still try to get the signatures?

Answer: Generally speaking, no. We should make sure that we get all necessary documents signed before close of escrow. Our company has many checks and balances in place to accomplish that task, including our agents, transaction coordinators, file reviewers, and transaction checklists. If, however, something falls through the cracks, getting a signature after close of escrow is more likely to hurt us than help us.

Asking buyers or sellers to sign something after close of escrow is like announcing to them that we messed up. They can use that knowledge against us, such as by claiming that they wouldn’t have bought or sold the property if they had known about the unsigned document. They could also use the lack of signature to bolster any other claims they may have against us. For example, a buyer who feels that we failed to disclose something about the property could use our failure to get something signed as supporting evidence to show that we did not do a good job as the agent.

Also, if we were to ask a buyer or seller to sign something after close of escrow, what date would we ask them to use? It’s a no-win situation. If we ask them to backdate the document, we would be asking them to misstate the truth. If we ask them to use the actual date of signing, the signature would generally be meaningless because the transfer of ownership and funds have already taken place. If we ask them not to insert a date, they will know that we are trying to pretend that we got the signature before close of escrow.

-Thank you to Kathy King (Calabasas and Encino Manager) for suggesting this week’s legal tip.

Copyright© 2019 Berkshire Hathaway HomeServices California Properties (BHHSCP). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of July 22, 2019. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals.

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