Answers provided on the Legal Line do not constitute legal advice. If you have a question that requires legal advice, AAR recommends speaking with retained counsel.

AAR's Legal Line is here to help all AAR members with questions they may have about the AAR Statewide Legal Forms, Alabama license law, property law, and more. Below are some recent questions and answers that you may find helpful.

Q1: If the buyer selects that they would like owner’s title insurance in Paragraph 14 of the AAR Purchase Agreement, does the seller automatically pay for it?

A1: No. The default under the AAR Purchase Agreements is that the buyer is responsible for all expenses, except those prohibited by FHA/VA loan restrictions. If the buyer wants the seller to cover the cost of any expense, including owner’s title insurance, they must specifically request that the seller pay that expense in Paragraph 8 (Expenses), Paragraph 31 (Additional Provisions), or an addendum.

Q2: When preparing an Estimated Closing Statement, what should I do if I don’t know how much a certain expense will be?

A2: If you do not know the exact amount of a fee, it is acceptable to use a reasonable estimate. A common approach is to provide a range rather than leaving the expense blank. For example, if a document preparation fee has not been finalized, you might list it as “$700-$1,000” and let the consumer know it is an estimate within that range. However, estimates should be based on real information and not guesses. It is a best practice to reach out to the title company, lender, or third-party service provider to obtain an estimated cost.

Q3: Must listing agreements and buyer agreements be signed by both the qualifying broker and the licensee working with the consumer?

A3: No, listing agreements and buyer agreements are only legally required to be signed by either the qualifying broker or the licensee working with the consumer. However, some companies might have an internal requirement that both the qualifying broker and the licensee sign the document.

Q4: If a contract fails, can the property be re-listed on the MLS while earnest money is still in dispute?

A4: First, check with your local MLS, as rules can vary. In most cases, however, the property can be re-listed once the purchase agreement has terminated, even if the earnest money is still in dispute. The earnest money issue is separate from the ability to re-list. The parties can use AAR’s Release and Cancellation of Purchase Agreement (RF 2.7) to terminate the contract and proceed with re-listing, while leaving the earnest money section blank in situations where the parties disagree about how earnest money should be disbursed.