Purchase Contracts and Hud 1’s
Why do we ask for a copy of a seller’s purchase contract and Hud 1?
Each state requires that a brokerage maintain certain documents in each file for a certain # of years. (this # varies by state but on average is about 5 years) In the event of an audit by the state, the brokerage must be able to show the documents required by the state, per the guidelines set forth by the real estate commission. Failure to do so can result in a loss of the brokerage real estate license. (essentially putting them out of business) The state conducts audits of real estate brokerages to protect the public from commingling, fraud, etc.. Typically, these audits are random, however, a broker can expect to be audited at least once every few years.
We do not ask for purchase contracts to try and obtain any compensation during a transaction. We only want to be in compliance with the state. One thing that sellers should keep in mind is that very few states are non disclosure states. This means that the public will have access to your sold data, thus, refusing to provide a purchase agreement will not result in the public not being aware of the sale. Almost all counties publish this data online through the county assessor website. (except Texas) By providing these documents, sellers are helping keep our cost down, and thus, keep our listing fee as low as possible. Lastly, by providing these documents, we can update your MLS listing in a timely fashion and avoid fines from the MLS.
J. Andrew English
Tags: MLS News