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The Alluring World of
Standardization
Every trade, industry, and profession has its particular
way of doing things and real estate is no exception. Rather than reinvent the wheel
with every transaction, brokers, agents, and lawyers tend to work from a basic set of
assumptions that are contained in uniform documents.
In theory and in practice there is much to recommend
standardized forms. They save time, they’re efficient, and offers prepared with
uniform documents are easy to compare and evaluate. But for all their value,
standardized forms camouflage a significant number of problems.
First, all real estate transactions are one-of-a-kind
events: they involve people with different and opposing interests, unique
properties, different jurisdictions, and economic conditions that are always in
transition. Trying to fit those these diverse interests into a single, standardized
contract form makes no more sense than requiring everyone in town to wear size 10 shoes.
Second, standardized forms have evolved into a kind of
social and economic bludgeon. Buyers and sellers are told that “everybody”
uses one form, that a particular document is “our standard agreement,” and
“all the points you’ve raised are in the contract.” Such assertions
are uncontested, not because they’re right or wrong, but because it’s
impolite to argue. Our social training encourages us to be courteous and the result
is that the need for personal acceptance dampens our drive for a good deal.
Third, the very idea of “standard” implies
certain values. After all, if something is standard, are not alternate approaches
“unstandard” or perhaps substandard? The answer in brief is
“No.” The real issue concerns not what is “standard” but what
is appropriate in a given transaction. If a standardized form works, fine. But
if it needs to be modified that’s okay too.
Fourth, in the current marketing system standardized forms
are treated with an awe and reverence usually reserved for sacred objects.
They’re so “official” that all too often buyers and sellers believe such
forms are also untouchable. Yet no matter how imposing a form may look, it’s
just a piece of paper, something that can be modified or amended at any point before both
buyer and seller sign the document and close the deal.
Fifth, by signing standardized forms, buyers and sellers
often bind themselves to a lengthy list of understandings and accommodations that have not
been negotiated. For example, a form might divide the payment of realty sales taxes
equally between buyer and seller even though such payments are totally negotiable.
As a result, buyers and sellers may haggle over prices and terms for hours and then give
up hundreds or perhaps thousands of dollars without any discussion, bargaining, or
concessions, merely because of an obscure clause buried in the middle of a from document.
This Tip was excerpted from:
Successful Real Estate Negotiation by Peter G. Miller and Douglas M. Bregman,
HarperCollins Publishers, Inc., 1994
ISBN # 0-06-273264-1
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