Some Changes to the C.A.R. Purchase Agreement
July 27, 2010
The revised California of Realtors Purchase Agreement and Escrow Instructions has some subtle changes that could have an effect on a sales transaction. In the previous standard purchase agreement form, there was a separate clause referencing the Structural Pest Control Report and allowing for a choice of who would pay for the report and for any work required. Typically a buyer's agent would attached an addendum spelling out who would pay for required work. The new contract has eliminated this clause and put the addendum as one of the attachments to a purchase agreement which can be checked in order to be included.
If the termite addendum is not checked as part of the purchase agreement,the change allows the buyer and seller to negotiate which repairs and who pays in the same manner that other requested repairs are negotiated. If it is checked, the addendum becomes a term of the contract and most lenders will require all work on the structural pest control report to be completed prior to close of escrow.
If the addendum is not checked, agents should remember to include the cost of the report under the clause that allocates costs such as septic inspections, etc.
Habits are hard to break and most agents still want the addendum to be included as a part of the contract. However, this change permits a seller to not commit to paying for repairs prior to knowing what those costs might be. Structural Pest Control repairs are still an important issue that must be confronted and dealt with in order that buyers are comfortable that they are purchasing a sound house. Sellers will probably continue to need to make the repairs, but at least this newer process allows room for some negotiations.
The revised California of Realtors Purchase Agreement and Escrow Instructions has some subtle changes that could have an effect on a sales transaction. In the previous standard purchase agreement form, there was a separate clause referencing the Structural Pest Control Report and allowing for a choice of who would pay for the report and for any work required. Typically a buyer's agent would attached an addendum spelling out who would pay for required work. The new contract has eliminated this clause and put the addendum as one of the attachments to a purchase agreement which can be checked in order to be included.
If the termite addendum is not checked as part of the purchase agreement,the change allows the buyer and seller to negotiate which repairs and who pays in the same manner that other requested repairs are negotiated. If it is checked, the addendum becomes a term of the contract and most lenders will require all work on the structural pest control report to be completed prior to close of escrow.
If the addendum is not checked, agents should remember to include the cost of the report under the clause that allocates costs such as septic inspections, etc.
Habits are hard to break and most agents still want the addendum to be included as a part of the contract. However, this change permits a seller to not commit to paying for repairs prior to knowing what those costs might be. Structural Pest Control repairs are still an important issue that must be confronted and dealt with in order that buyers are comfortable that they are purchasing a sound house. Sellers will probably continue to need to make the repairs, but at least this newer process allows room for some negotiations.
posted by shirley harry at 8:37 AM
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