If you are buying or selling a home, chances are you will be presented with a standard contract prepared by the California Association of Realtors, captioned California Residential Purchase Agreement and Joint Escrow Instructions/Buyer's Inspection Advisory, or a close facsimile thereof. This contract contains 10 pages of pre-prepared, very specific and detailed legal language and clauses, all of which purport to govern the terms of your agreement with another party.
Decide For Yourself
Some words of caution: read this contract carefully, and for yourself--whether or not it is presented to you by your own real estate agent or by the agent or principal on the other side of your real estate transaction. Decide for yourself if you wish to be bound by the liquidated damages and/or arbitration clauses, whether or not your own agent or the other party has already elected to include them. Decide for yourself if you wish to be bound by the mandatory pre-arbitration/pre-litigation mediation clause, which does not even require your initials or any act of affirmative acceptance on your part in order for you to be bound by it. If you do not agree with the mediation clause, or with any other clause included in this contract, use your pen, and strike it out.
Buyers Be Aware
Keep in mind that sellers (and real estate agents and brokers) are typically benefited by the arbitration and mediation clauses in a real estate purchase contract; and buyers are not. If you are the buyer, and if you agree to the liquidated damages clause, be certain that the liquidated damages are limited to the amount of your initial deposit; are fair and reasonable; and do not include the substantial additional sums that are sometimes agreed to be deposited into escrow during the course thereof.
Take Charge
Most importantly, know and remember that this is a contract between you and the buyer or seller who is on the other side of your contemplated real estate transaction. It does not bind, and should not be for the benefit of, the real estate professionals on either side. It is your purchase and sales contract to negotiate and sign, and to which you agree to be bound. You can strike out or alter any provision in this and in any other contract presented for your approval and signature. Take the time, effort and decision-making authority that rests in you to do so.
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