New California Residential Real Estate Purchase Contract
New California Residential Real Estate Purchase Contract | San Diego Attorney
San Diego Contract Review Lawyer
While the California real estate purchase contract is not required under law, it is the most common contract that real estate agents and lenders use for residential real estate transactions. In April 2010, the contract was significantly revised. As with the former California Residential Purchase Agreement, the new contract is friendly to realtors, and contains several provisions for their protection and benefit. It was drafted by the California Board of Realtors, a powerful lobbying group in the California State Legislature.
Even though your broker will hand the contract to you like it is a done deal, your residential real estate purchase contract is yours to negotiate and sign. You will be bound to whatever agreement you make. Remember: you can strike out or alter any provision in this contract. You do not have to - and you should not - automatically agree to its terms.
An experienced real estate and contract review lawyer can help you review the contract and aggressively negotiate for your best interests. California residential real estate attorney Virginia Gaburo has more than 20 years of experience representing individuals in a wide range of real estate matters, including negotiating real estate agreements.
Significant Changes to the California Residential Purchase Agreement
The following are some of the significant changes present in the new California residential purchase agreement:
- The agency disclosure and confirmation is now at the beginning of the contract
- It is now assumed that the buyer will pay the deposit directly to the escrow once he or she has accepted the home, rather than to brokers (avoiding problems with trust logs/trust fund accounts)
- The contract makes it clear that contingencies and cancellations must be done in good faith (which has always been required, but never so explicitly) and extends the notice to perform from one to two days
- The contract provides that if the buyer receives any item late, he or she may decide to cancel or remove the applicable contingency
- Spas, pools, air-conditioners and code upgrades can now be included under the home warranty coverage
- Appraisals must be done by a licensed or certified appraiser
- The contract outlines the rights of buyers to inspect for wood-destroying pests and require repairs even if a wood-pest report (WPA) is not used
Automatic Mediation and Selected Arbitration Clauses
The new California residential real estate purchase contract retains the automatic mediation and selected-by-initialing arbitration clauses. Most real estate agents will encourage you to accept both. However, while mediation and arbitration are generally helpful to sellers, they can hurt buyers. Buyers do not know what their claims will be when they sign the contract - they could be anything from mold and mildew to structural defects to an undisclosed death in the home from a communicable disease. Therefore, do not sign the new California residential real estate purchase contract and agree to the mediation or the arbitration clause without asking "do I want to be bound to it?"
To speak with an experienced real estate lawyer about the new California residential real estate purchase contract, call attorney Gaburo at 858-546-0183, or, if you prefer, you may fill out our intake form and we will contact you.