Understanding Contract Drafting in Virginia Real Estate Transactions (Full Transcript)

Speaker 1: Happy Tuesday, everybody. This is Bretts Hopson again. This is the Close-In Ninja Classroom. This is another installment of our Teaching Tuesday series. The question for today that I got from the Realtor Friends is, who can draft a contract in the Commonwealth of Virginia? So it's basically three parts. Number one, the title owner of a property or the purchaser can draft the contract without the involvement of a third party. If a third party is involved, you can either be an attorney licensed in Virginia or it can be a salesperson. Under the code, a salesperson or a broker. So your real estate agent can draft the contract. The caveat is the real estate agent has to be a disclosed agent involved in the transaction and they cannot charge a separate fee. So what does that mean? So if you're a real estate agent and your buddy that you went to high school with, there's a FISBO down the street and they want to purchase that property and they say, hey, will you hook me up with a contract? Will you help me with the contract? Technically speaking, if you were to do that and you're not a disclosed agent and you're not a party to that transaction, that would be the illegal or the unlawful practice of law. So just be wary. If you're a real estate agent out there, if you give any advice or if you assist someone in the drafting of a contract and you're not a disclosed agent, that would be the unlawful practice of law. Also, you could expose yourself to liability. So if you are just helping somebody on the side and that contract falls through and there's litigation that ensues, you know, they're going to come and point the finger at you and they're going to say, well, wait a minute, I relied on the expert. I relied on my buddy when drafting this contract. So you don't want to get yourself sucked into a lawsuit. You don't want to expose yourself to, you know, unneeded liability. So in summary, in Virginia, the title owner of a property can draft a contract. The buyer of that property can draft the contract. An attorney licensed in Virginia can draft the contract. Or a licensed salesperson, such as a real estate agent or a broker. But in order for the real estate agent or broker to be involved and draft the contract, they have to be a disclosed agent and it has to be pursuant to the relationship that they're representing and they cannot charge a separate fee. Hopefully that clears it up. I appreciate you. Happy Tuesday. Thank you.