buyer’s agent best practices
Home Buying Contingency Removal Under CA Purchase Contract
If anything, this Sacramento REALTOR is a stickler for adhering to the terms of the California Residential Purchase Agreement between her sellers and another agent’s buyers. Yeah, yeah, I hear from other transaction coordinators around town that many listing agents never ever ask for a contingency release, and they just blow it off, like some buyer’s agents will also blow off adhering to the buyer’s duties under the terms of the purchase contract — oh, those pesky legal documents — but that doesn’t make it right much less legal.
A listing agent has a fiduciary relationship according to California Civil Code and the California Bureau of Real Estate. The Agency Disclosure describes a listing agent’s fiduciary as “a fiduciary duty of utmost care, integrity, honesty and loyalty when dealing with the seller.” It goes on to say the agent must show diligent exercise of reasonable skill and care, and the same fiduciary pertains to buyer’s agent and even dual agents to their respective parties, if you can believe that.
Yet, who gives a crap about this, you might ask? That’s a reasonable question that should have a reasonable answer, but I don’t have one. I know I care deeply about my fiduciary.
When I represent a seller who enters into a residential purchase agreement with the buyer to sell a home, I remind the buyer’s agent when the contract contingencies are to be released. We remind the buyer’s agent when we enter into the contract, and again, a day prior to the contingency removal. I can’t count the numbers of times we have asked for a contingency release and been ignored. Oh, just don’t worry about it, seems to be the prevailing attitude from some buyer’s agents.
Someday those agents will be a listing agent. Someday these same agents might discover the unfortunate experience of standing in front of a judge, head hung, to answer: Did you show utmost care, integrity, honesty and loyalty? It’s not a place I have ever been nor a place I ever want to visit. But fear of reprisal is not my reason for following the terms of the purchase contact.
It is my fiduciary duty as a listing agent to request a home buying contingency removal for the sellers. If the buyers need more time, then buyers should consider submitting an Extension of Time Addendum for the sellers to entertain. If you were to read paragraph 14-B-3 of the RPA, it states: By the end of the time specified in 14-b-1, which is the number of days available to a buyer to complete all investigations,?”Buyer shall deliver to Seller a removal of the applicable contingency.” It goes on to state that if the buyer refuses, the seller can ultimately issue a Notice to Perform and then cancel the contract.
It’s nothing personal when I ask for a contingency removal under the terms of the purchase contract. I am just doing my job and asking that the buyer’s agent do the same thing. If the sellers elect to cancel the transaction due to non-response, hand over the deposit to the buyer and send the buyer on his merry little way, that’s up to the sellers. In situations in which buyers fail to perform, I do have to give the sellers that option. It’s my fiduciary duty.