Initials – How Many?

Question:

My client receives an offer for $1 million. My client (the Seller) counters at $1.2 million, and initials the change.

The Buyer now wants to signback at $1.1 million.

How do they do this? Do they:

1) Initial Seller change AND add their new change (2 initials), or

2) just add 1 initial next to their new offer of $1.1M (I set of initials)?

Answer:

The Buyer initials indicating “agreement”. If there are no initials, then, there is no agreement. The Buyer is not accepting or agreeing to the $1.2 million proposal.

Insert $1.1 million and initial that alone. Ignore the Seller’s counter Offer at $1.2 million.

Frequently, it is the price which goes back and forth several times between the parties while they are negotiating.

The difficulty is often that there are so many initials all over the place, that it becomes difficult for any independent third party to come along and simply read the document.

So, at a certain point, we should simply have a new Agreement, start to finish. Also, when it comes down to just one simple issue in contention (like the price) using the OREA Counter Offer Form might work.

There is an obligation under the Act to have clear, legible agreements. See s. 27:

Written and legible agreements

27. (1) A registrant who represents a client in respect of a trade in real estate shall use the registrant’s best effortsto ensure that,

(a)  any agreement that deals with the conveyance of an interest in real estate is in writing; and

(b)  any written agreement that deals with the conveyance of an interest in real estate is legible.  O. Reg. 580/05, s. 27 (1).

(2) Subsection (1) applies, with necessary modifications, if a brokerage and a customer have an agreement that provides for the brokerage to provide services to the customer in respect of any agreement that deals with the conveyance of an interest in real estate.  O. Reg. 580/05, s. 27 (2).

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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