If you are planning to buy or sell a house, you should be familiar with the new Residential Purchase Agreement. "Oh, my Realtor will tell me what I need to know," you say. Think again! This contract underwent some major changes within the last couple of years, and continues to have little tweaks done to it with no real fanfare at least twice a year. Most of these changes are designed to clarify items that didn't even exist a few years ago, like leased solar and alarm systems. But some items that don't look like a big change can be if they apply to you. Also, There are some subtle bombs hidden in straight-forward boiler plate sentences.
A. SELLER HAS: 7 (or __) Days after Acceptance to Deliver to Buyer all Reports, disclosures and information for which Seller is responsible under paragraphs 5,6,7,8B(5),10A,B,C, and F, 11A and 13A. If by the time specified, Seller has not Delivered any such item, Buyer after first Delivering to Seller a Notice to Seller to Perform (CAR Form NSP) may cancel this Agreement.
Now this may sound like a fine point, but if your house is in the City of Los Angeles, for example, you are required to provide what's known as the 9A report. This is the City making a few dollars on every sale by requiring you to submit an application which costs $70.20 for a single-family house to check their records and see if there are any liens owed to the City, if there is a record of a Certificate of Occupancy, and if a sewer permit has been issued.
Many Realtors wait to complete disclosures and submit the 9A application until well after opening escrow--well guess what, that is out of compliance with the contract and by doing this, you can give the buyer a reason to cancel the deal!
Here's another one for you:
ITEMS INCLUDED IN AND EXCLUDED FROM SALE:
A. NOTE TO BUYER AND SELLER: Items listed as included or excluded in the MLS, flyers or marketing materials are NOT included in the purchase price or excluded from the sale unless specified in paragraph 8 B or C.
I can't count the number of times this has caused a problem--because buyer or seller ASSUMED if it said something was not included on the flyer, or in the listing agreement, or on the Multiple Listing, that meant it was a done deal. Not so.
Some sellers focus on finding an agent who will give them the best "deal" on their commission. You won't be saving anything if your agent doesn't understand the contract and accidentally lets you commit to leaving your heirloom chandelier even after you made sure it was noted in the MLS that you were taking it.