The Four Corners of the Contract

As I’ve mentioned, real estate contracts flow according to the four corners of the document. While it’s commonly the sales contract where issues arise, the truth is that other documents such as the listing agreement can also get tangled up. Understanding who the “parties to contract” are can be confusing. When it comes to a sales agreement (purchase contract), there are two parties involved: the buyer and seller.


Seems obvious, right? Consider timelines. A signed contract establishes the closing event timelines yet there are several third parties actions that need to happen in order to close. For instance, the contract establishes loan timelines which in essence give the lender deadlines for loan tasks. Remember, however, that the lender is not a party to the contract. Neither is the termite inspector, the surveyor nor the association manager responsible for timely providing appropriate documents. These vendors are not bound by the dates in the purchase agreement.

Relationships Matter

So what’s a buyer and seller to do? Relationships matter. While many think it’s the buyer or buyers agent who can push things along, a seller’s agent who has a great relationship with a lender, termite guy, surveyor, etc are actually in the best position to help. Vendors respond quickly to a busy seller’s agent. And remember, our contract gives a seller’s agent permission to speak to the lender. I’m more inclined to advise a seller to consider an offer using a lender I know and trust. After all, I can depend on what they say and are apt to advise sellers to be flexible based on me knowing their word is good. If it seems the lender is doing nothing (or worse, doesn’t know what they are doing), my advice to seller may take a different tone. The same third-party advice applies to the listing contract as well. Sellers sometimes want to insert a third party like a referring agent, a court order or even an attorney into the contract. They are not a party to the sale. The listing agreement is not the place for this. Non-listing issues are addressed elsewhere.

The confusion related to third parties in real estate agreements can become so confusing that progress stops or slows down just because buyers, sellers and agents alike often lose sight of who the parties really are but remember It’s simple when you just look to the four corners of the document!

About the Author

Denise Nakanishi

Denise Nakanishi is a REALTOR Broker with Hawai'i Life. Denise Nakanishi is one of Hilo's most acclaimed real estate agents. She reached the rank of Major in the US Army and is now known by many as "Major Mom." The nickname fits–not only does Denise bring the discipline and mission-oriented attitude you'd expect, she's also caring and compassionate, always looking out for her clients like they're her own family. Having made the Big Island her home since 1987, Denise combines her extensive knowledge of the area with a sharp focus on customer service and the results speak for themselves. She's the recent recipient of the Best East Hawai`i, Best of Zillow, Chairman's Circle Award, President's Circle, Top Producing Agent since 2001, and Realtor of the Year awards. Denise stays ahead of the curve because she's passionate about education–she served as Education Chair for Hawaii Island REALTORS® for many years. She's one of Big Island's best real estate resources, known for her weekly article in the Hawaii Tribune Herald. Denise leads Team Nakanishi for Hawai`i Life, who is committed to their family, work, and community. In her little time away from work, Denise is a committed runner and Grandy. She also devotes many hours to various Veterans' Organizations, the East Hawaii Cultural Center, and the Hawaii Island REALTORS®. You can email me at denise@hawaiilife.com or via phone at (808) 936-5100.

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