California Residential Purchase Agreement
Should a buyer sign an exclusive buyer broker agreement? This question is as relevant today as when this article below was originally written, over a decade ago for another website, by Elizabeth. Enjoy. — JaCi Wallace
Shortly after I wrote the article linked below, a reader wrote to me to complain. He said he was looking for a definitive answer in my article, and he couldn’t find it. He wanted to know, gosh darn it, should he or should he not sign a buyer’s broker agreement! So he was quite ticked off about it, too.
Wondering how to cancel a listing or purchase contract? Below is a previous post on another site written by partner Elizabeth Weintraub. What is so interesting — it’s as relevant today as when written, more than a decade ago. These questions are asked often by the public when visiting our website about: Sacramento Real Estate.
“It’s too bad that you can’t just rip up a contract to terminate an association or an agreement, but that’s not how it works. To find out if your contract can be canceled, the first step to take is to read the contract. Contracts typically contain a provision for cancellation.
The process I am about to describe to you, how to double end a listing without listing the house, is not something your broker’s legal team will want you to read about. I am not promoting this particular system as much as sharing stories that happened to me 40 years ago when I first started selling real estate. Many of our activities back in the 1970s would have lawyers today running for the closest bottle of scotch.
Yup, today this would involve practicing risk management on overload. Legal liability up the wazoo. Yet, I’m gonna tell you anyway, because that’s just the kind of person I am. A troublemaker. With a capital T that rhymes with B and stands for bad influence.
Everybody and their uncle knows you need smoke and carbon monoxide detectors to sell a home in the Sacramento region . . . or . . . do you? First place to look, of course, is the California Residential Purchase Agreement. Paragraph 7 B1 lets the preparer of the contract check a box as to which party will pay for smoke and carbon monoxide detectors. Agents who are on the ball will specify the buyer will pay for those items when the home is sold AS IS, but not every agent is on the ball.
Now, state and local laws require a carbon monoxide detector be installed on every level of the home. Some appraisers count every level, even a one-step-down family room as an extra level. They might note basements as an extra level. The danged things are only $20 a piece, and they don’t have to be wired into anything, just plugged in. But what happens if you don’t install carbon monoxide detectors? Will firefighters ax down your door? Will the CO cops break into your home dressed in haz-mat suits to arrest you?
What happens is the buyer’s appraiser won’t release the appraisal report and /or the lender will call for carbon monoxide detectors to be installed before the loan will fund. Or, the way I explain it to sellers: shit rolls down hill. The appraiser will look for the carbon monoxide detector immediately upon entering the home. If they don’t see it, they will often leave and charge the buyer for a return visit. The buyer will then complain to their agent. Their agent will then call me to complain. See where this crap rolls?
So do I naturally call the seller and complain? Are you joking me?
Because I’ve already explained it upfront and if a seller chooses not to install a carbon monoxide detector, I am not the CO police, either. Hey, I ask you. Whose fault is it the buyer doesn’t have cash and needs to get a loan? Is it the seller’s fault? As solely a listing agent, I realize agents who represent both parties do not share this attitude, and, in fact, find it shocking, from their own biased point of view.
Our state and local laws require a smoke detector in every sleeping area; however, an appraiser’s definition of a sleeping area might be different than yours or mine. Smoke detectors are also required in every hallway and on every level. If the smoke detector features a removable battery, the unit must contain a non-removable sealed battery good for 10 years. Which excludes every smoke detector in my house, now that I think about it.
Sometimes, on my AS IS listings in Sacramento I include a clause in the listing agent’s AVID that states the buyer is responsible for installing smoke and carbon monoxide detectors. It is not really legal because buyers must sign receipt of that document and may not agree, but I stick it in there anyway. When there is no loan, then it becomes a matter of whose responsibility is it to install smoke and carbon monoxide detectors (sellers), who will pay for it (buyers or sellers) and, most importantly, who will enforce it.
And I think you know the answer to that last one.
An additional seller consideration, though, is a signature on the Transfer Disclosure Statement (TDS) does state the seller promises the smoke detectors are installed in accordance with the law.
This matter should be discussed by the listing agent with the buyer’s agent beforehand, just to avoid misunderstandings. However, most buyer’s agents are trained to look for smoke and carbon monoxide detectors when they first show the home and make notes in case the buyer decides to make an offer. If agents aren’t providing this service for their buyers, they should.
When I send home inspection repairs and findings to a seller, it is for the seller’s records only. I tell them this. But still, some home sellers react in unexpected ways. Some sellers take the home inspection very personally. They want to call the home inspector and chew off his ear. (For some reason, more men than women opt to become a home inspector.) Sellers find the composition of the report offensive. Many don’t like the “repair” or red flags noted.
Often, these are the very sellers who tell me at the time of listing that there is nothing wrong with their home. In their mind, they have the perfectly maintained home. I chuckle to myself because I know better. But I don’t argue with them. It’s not always so much that there is a lot of stuff wrong as it is buyers may feel as though they paid all this money for a home inspection, there better be some actual discoveries. Otherwise, why did they pay $450 for nothing?
So there are home inspectors who go out of their way on the well maintained homes to find a handful of defects, regardless of how small or insignificant. A chip on the edge of a roof shingle. Water marks on the windows. Scuff marks on the screen door. Which is really amusing when you think about this. Instead of a buyer feeling relieved to discover no major problems, some buyers openly choose irritation.
Funny story to interject. When I sent a recent file of home inspection repairs to a seller, the seller thought he was supposed to fix everything. Why? I dunno. He ordered delivery of light fixtures and lined up workers. It’s a good thing he checked with me because I told him to cancel the order and the workers. He sold his home in AS IS condition. Just like every California Residential Purchase Agreement states in paragraph 11. The home is sold AS IS.
Now, one of the problems lies with buyer’s agents who don’t want to alienate buyers. So, when their buyer makes noises about not buying a home with defects, the buyer’s agent has a go to. That go to is to write a request for repair and to ask the seller to fix things. I always tell my sellers they don’t have to fix anything. Especially when receiving a petty request for repairs. Instead, I lay out the options. They can just say no and take a chance the buyer will get her knickers in a twist and cancel.
But then again, the next set of buyers won’t ask for things. Pretty much guaranteed. If it’s a substantial sum of money, we might want to sell the house again to a more reasonable buyer. I do not mind selling a home twice and getting paid once if it helps the seller. Or, the seller can agree to give the buyer a credit or renegotiate the price. Or, fix some things and not all things. It’s all negotiable. But generally, my sellers just say no. It’s their right.
A list of home inspection repairs and suggestions is for the buyer’s edification. It’s not to reopen negotiations. And I have to admit, when I work with experienced buyer’s agents on the other side of the transaction, I almost never get a request for repair for my seller. Why is that, do you think?