Agent’s Guide to Real Estate Sales Contract Signatures

You’ve taken your buyer on a tour of several of the homes for sale in your market and finally found the right house on which to make an offer. Now comes the task of drafting the sales contract.

But what if one of the parties involved in the transaction is not an individual? For example, what if the buyer is an LLC or the seller is a trust?

In these instances, the agent is tasked with obtaining contract signatures in both proper form and with proper authority so as to form a legally binding contract.

We’ve put together a guide for agents to outline the most common of these often-confusing instances – and show you best practices for proper real estate sales contract signatures.

In the case of a party acting as a Trust:

Example Owner = JOHN A. SMITH REVOCABLE TRUST

Identify Authority = Requesting a copy of the trust agreement or abstract of trust can be uncomfortable, but it’s important to know who is named as the trustee of the trust and whether that trustee has the authority to contract for the purchase or sale of the property.

Example Signature Format:

Assuming John A. Smith is named as the trustee, the following would be the proper signature format:

John A. Smith, Trustee for the John A. Smith Revocable Trust

In the case of a party acting as an Estate:

Example Owner: ESTATE OF MARY S. POPPINS

Identify Authority = It is important to request a copy of the Letters of Administration issued by the court. The Letters of Administration will name the individual appointed as Personal Representative for the estate. That individual, as Personal Representative, is vested with the powers to sell the property.

Example Signature Format:

Assuming Edward C. Poppins has been appointed as Personal Representative in accordance with the Letters of Administration, the following would be the proper signature format:

Edward C. Poppins, Personal Representative for the Estate of Mary S. Poppins

In the case of a party acting as a Limited Liability Company (LLC):

Example Owner: ACME, LLC

Identify Authority = It is important to obtain a Company Resolution. This is a signed document by all members of the LLC appointing an individual (oftentimes a fellow member) to act as agent on behalf of the LLC and vesting authority in that individual to contract for the purchase or sale of the specified property.

Example Signature Format: Assuming James B. Jones has been named and appointed by the signed Company Resolution, the following would be the proper signature format:

James B. Jones, Authorized Member of ACME, LLC

In the case of a party acting as a Corporation:

Example Owner: NEWCO, Inc.

Identify Authority = It is important to obtain a Corporate Resolution. This is a signed document by the corporation’s board of directors appointing a corporate officer to act as agent on behalf of the corporation and vesting authority in that officer to contract for the purchase or sale of the specified property.

Example Signature Format: Assuming corporate vice president, Billy D. Davis, has been named and appointed by the signed Corporate Resolution, the following would be the proper signature format:

Billy D. Davis, Vice-President of NEWCO, Inc.