Buying a Home
Q: Because my wife and I cannot afford the down payment on our first residence by ourselves, her father has offered to provide 100% of the down payment so long as he is a co-owner of the property and can share in any appreciation in value of the property, and we make all of the mortgage payments. What options do we have in specifying how the grant deed to the property should be prepared to provide my father-in-law with a recorded interest? Continue reading
Q: I am a first time home buyer and my agent mentioned that I may want to request “contingencies” in addition to those provided in the standard residential purchase agreement because of the characteristics of the type of homes we have been researching. What are contingencies and what should I consider in determining which contingencies to include in my offer? Continue reading
Q: I am considering selling my home and then purchasing a new home. Because of the amount of information I can obtain on the internet about selling and buying real property, do I really need a broker who I will have to pay a commission to?
A: It is not uncommon for many sellers and buyers of real property to have misconceived notions about the utility of using a broker to handle the selling and buying of real property, especially if they have not been involved in prior transactions. Some sellers believe that the broker’s function is limited to finding a buyer, and buyers tend to believe that the broker’s role is limited to finding a property. But such limited views do not recognize the many valuable functions that brokers can provide, and the benefit of a broker may not be realized until after serious and negative legal consequences have occurred. Continue reading
Q: I have not purchased a home for many years and my agent mentioned that the California Association of Realtors has revised the standard residential purchase agreement. Is this true and how has the agreement been changed?
A: The California Residential Purchase Agreement and Joint Escrow Instructions (“RPA”) has not been changed for many years, but a new version has been issued by the CAR effective April 2010 that makes several significant improvements that should help to make the agreement easier to use and understand. Some of the improvements are to the order of the paragraphs and others are to the content of the provisions. The RPA constitutes an offer and if it is accepted without any counter‐offers, it will constitute a binding contract. Therefore, it is the most important document in the transaction that is supplemented by the other forms in the transaction.
The RPA is prepared by the buyer of the residence, usually with the assistance of an agent. The agency relationship paragraphs have been moved from the end of the RPA to the first page, and this is important because the disclosure and confirmation of the real estate agency relationships is one of the more problematic issues in the transaction, especially if a single agent is representing both the seller and buyer. By moving the agency paragraph to the first page, it assists both the seller and buyer to confirm their respective agency relationships prior to completing the other sections of the RPA. Continue reading
Q: I recently purchased a residence and I signed a standard California Association of Realtors Residential Purchase Agreement. I now believe that there are defects in the home that were not disclosed to me by the seller and I want to file a lawsuit and recover my attorney fees. The Agreement has a provision for mediation, but do I need to request mediation before filing a lawsuit?
A: It depends. There is no requirement to mediate before filing a lawsuit against the seller or any broker involved in the transaction, unless there has been an agreement to arbitrate. If the parties agree to arbitrate and one of them files a lawsuit, the other party can file a motion with the court to stay the lawsuit and compel the arbitration.
However, pursuant to paragraph 26(A) in the recently revised C.A.R. Residential Purchase Agreement, both the buyer and seller agree to mediate any dispute or claim arising between them out of the Agreement, or any resulting transaction, before resorting to arbitration or court action. The mediation provision applies even if the parties have not agreed to arbitrate. The buyer and seller also agree to mediate any disputes or claims with brokers who agree in writing to such mediation prior to, or within a reasonable time after, the dispute or claim is presented to the Broker. Except under certain circumstances described below, any party who commences a lawsuit or arbitration without first attempting to resolve the dispute through mediation, or refuses to mediate after a request has been made, is not entitled to recover attorney fees even if they prevail. Continue reading