Q.I signed page after page to make a purchase offer on a home, and even though my Realtor tried to explain the documents, 25 pages, I’m not understanding everything I signed. I feel kind of lost and hope my Realtor is on top of this. How can I be responsible for what I sign when much of it is legal language? B.Y. Rio Vista
A.The California Association of Realtors sponsors an on-line library of over 200 different forms appropriate to real estate. These forms are reviewed by attorneys for content and clarity, and are written to be neutral, causing any favorable slant to be in clear language on a counter offer or addendum, or spelled out in the body of the contract. The language is “plain” and meant to be understandable by the reader. The purchase contract is 10 pages, and all your money is spent on pages 1 and 2, everything else you signed has to do with non-money parts of the transaction.
I know the excitement of a new home purchase does not lend itself to contract analysis, and your Realtor is supposed to cover your end of the deal and protect your terms and money by following up on your contract obligations. A buyer’s only interest falls to price and date of occupancy. Often I see people ask questions on the first few pages, and after a while they just grab the pages and sign. At that point when “glazed over eyes” become evident a Realtor really needs to stop and point out areas of the document that might spur discussion.
The Realtor then maintains a fiduciary responsibility to confidentiality, and execution of the signed documents as you have instructed. Any changes or alterations then require your signature. You are responsible for what you sign, but your Realtor is a partner in this as well. Once all terms, price, and any counters and addendums are agreed and signed, the contract is submitted to an Escrow company to be executed as written.
Your Realtor monitors the timelines and application of the contract in general with Escrow, and should be reporting to you as well.
You don’t need to be shy about any concerns; a home purchase involves a very large investment. Any concerns or lack of understanding should be brought to your Realtor for explanation, and if your Realtor can’t or won’t explain, ask to speak with your Realtor’s Broker for clarification.
A sure way to get your Realtor’s attention is to threaten to withdraw from the deal, and as that promised commission begins to fade away, entire dialogues will open up!
Q.I’m reviewing my purchase agreement, and wonder if there is “teeth” in in the part where I could lose my deposit (liquidated damages)? K.D. Rio Vista
A.The maximum award for damages on a real estate deal caps at 3% of the value of the deal, and usually settles for the amount of the “good faith” deposit. Based on our pricing structure, the home would have to be valued in excess of $335k to exceed small claim court limits. With an attorney involved, the cash award would be severely diminished by fees. For the average deal, you have a small claims court action. Better served would be to go to arbitration to execute the intent of the real estate contract. The seller would have to show damages or monetary loss, so none of this is cut and dried. The purchase contract allows 17 days to do and accept inspections, usually the same for a loan contingency, so to lose your deposit really you would have be within days of completion of the contract. Then, if you abandon, it would more likely you could lose your good faith deposit, but not always! Your deposit is in Escrow, and needs both your and the sellers signature to release it.
Your best bet is to meet with the seller and negotiate through mediation to come to a resolve.
Posted on March 13, 2019 at 10:47 am by Sam Richards