Everything you need to know before signing a contract
Updated: Oct 22, 2019
Real estate purchases often represent a family's largest purchase transactions and their most valuable assets. Emotions can run high for both buyers and sellers. California poses special requirements so having a Realtor who can help navigate, support, and guide you can relieve a lot of the stress and headaches during the process. In California:
sellers have extensive disclosures
all provisions of the contract have to be in writing,
sellers must have title to the property.
the property is subject to contingency periods
we have to attend to compliance with applicable regulations
buyers have rights and obligations per the terms of the contracts.
If you hire me as your Realtor, I will work with you to take care to make sure that issues that are encountered are addressed according to the contract agreement to ensure a smooth sale for all parties. My goal is always to address concerns and to resolve all issues with communication not conflicts.
Legal Title and Authority
Too often, sellers will try to shift property to buyers without actually having legal title to said property. By providing for this in the contract, the buyer is able to further protect themselves by voiding the contract in the event that title is not held by the seller.
When the seller does have a valid legal title but creditors, for example, may be waiting to assert their claims over the property at-issue. A property might be subject to easements that affect its value, means of access, and use.
A buyer must not only ensure that the seller has valid legal title to the property, but that this title is unencumbered. If there are encumbrances, they must be disclosed and understood - for example, you would not be able to legally build a swimming pool over a city's sewer line.
Contracts and Promises Are Made In Writing
Under the California Statute of Frauds, a contract for the sale of real property is required. An agreement authorizing an agent to purchase or sell real estate, or to lease real estate for a longer period than one year is required also.
Agreements that are not in writing are rendered voidable. With contracts, you should never assume that the other party will stay true to an agreement that they are not legally required to, especially if it is financially advantageous for them to opt-out.
Rather than keeping any promises during negotiations oral (unenforceable), we will work with you to ensure that the promises and alterations are either written into the existing contract or added as an addendum to keep the contract valid.
Cash sales are nice and they do happen, but typically buyers write up offers requiring financing. If the buyer is not able to secure financing, then the agreement will fall through. If details are not specific, trouble can ensue for the buyers.
Agreements involving financing contingency provisions should require that the buyer obtain a loan at a certain specified interest rate (or lower). If the buyer is unable to obtain a loan at this interest rate level, then they are not forced to secure a higher-interest rate loan.
Conduct An Independent Inspection and Due Diligence
The days of single inspections or no inspections, are largely in the past. Today most buyers will conduct an independent inspection of the property before closing. The buyer should conduct independent due diligence to ensure the property meets current local regulation requirements. California sellers are required to make specific and extensive disclosures about the condition of the property, but the buyer is still advised to conduct inspections ensuring that the property meets expectations.
If property defects are found, the buyer may request fixes or could even back out of the purchase agreement altogether. The purchase agreement should allow the buyer to cancel the contract if the property is in defective condition - and if the seller will not fix the defect.
Real estate transactions need both sellers and buyers. As your agent, I will work to guide you and to navigate the contract and requirements with you.
For a free Pasadena Real Estate consultation, text or call Lisa at 626-696-9103.