Previously Ron Buck, Realtor®, spoke about the consumer protections built into the Department of Real Estate purchase contract that is meant to favor buyers. The state Department of Real Estate wants to insure that buyers know who is representing them and that they have every opportunity for “due diligence”.
What about home sellers and their rights? The first contract that most home sellers sign is the DRE Listing Contract. While there are no standard commissions or length of contracts, there are trends that are market driven and local driven. It is very important for the sellers to think through what items of personal property would be included and excluded, as well as the length of listing contract. Also think about your timeframe and what alternatives you have if your home does not sell. Make sure your agent updated. Put away all cash, jewelry and prescription drugs. If a seller turns down a full-price offer then the listing company could be entitled to a full commission. Even if a seller cancels the listing contract early a seller could be held responsible for a full commission.
What are the seller’s responsibilities as far as the DRE Purchase Contract is concerned? First, Ron Buck thinks that all sellers should understand that if the buyer performs as specified in the contract then the seller must sell. What if the seller changes his or her mind and does not want to go through with the sale? In that case the buyer may negotiate with the seller to cover his costs or the buyer may go to court and sue for specific performance.
Of course Ron Buck is not trying to practice law and if you find yourself in this situation then legal counsel is always advised. Sellers have basically one method of cancelling which is to refuse to make any repairs and maybe make the buyer mad so they will go away, but it is the buyer’s choice.
The DRE Contract defaults to 17 days for a due diligence period. The buyer is expected to remove all contingencies at the end of this period. If the buyer does not remove contingencies the seller may send a signed “Notice to Perform” to the buyer which mandates that the buyer remove all contingencies or cancel and receive his earnest money back. Some states have a witching hour where the buyer’s contingencies are automatically removed at midnight on a certain day – not so in CA. Sellers also must turn over the property in “substantially the same condition” as when the buyer made the offer. Sellers must also give certain state or broker required disclosures to the buyer.
Ron Buck, Laguna Niguel Realtor’s mentor always said that homes sell because both sellers and buyers want them to sell. That’s a very good point.