Hello again to all Silicon Valley Home Buyers:
This blog is a must read for all current and future potential home buyers in Silicon Valley, first time and experienced buyers, real estate investors, individuals and families alike.
What I would like to cover in this blog are the main provisions of the California Residential Purchase Agreement that you will need to sign when you buy a home in Silicon Valley.
Before anything 2 very important and general tips:
- Tip #1 to everyone out there looking to buy real estate, in Silicon Valley or anywhere else by the way: Please make sure you read in full and with the utmost attention all provisions of the home purchase contract.
Tip #2: Please make sure to identify the provisions of the purchase contract that are more binding than others, i.e. that can have more dramatic consequences than others if not respected.
In the California Residential Purchase Agreement, the key provisions that should never be overlooked are the ones that define in particular your rights, your duties and your liability, in particular if the deal does not go through.
I will address in this blog the basic deadlines and provisions that apply whether you buy the property with cash or with a loan.
In my next blog
, I will discuss the specific provisions that apply when you finance the acquisition of your property with a loan.
Here are the top 3 deadlines and provisions that you need to watch out for:
- The Date of Acceptance of your offer by the seller(s). This date is crucial as it is the starting point of all the deadlines and computation until the Close of Escrow. There are 2 deadlines which will impact you:
- The deadline for the payment of the initial deposit: According to the California Residential Purchase Agreement, you have 3 (three) business days after acceptance to deliver your initial deposit to the title company Please note that if the property you intend to buy is a short sale, the 3 days deadline starts the day after the seller(s) deliver to the buyer(s) the short sale lender(s) written consent on the short sale.
- The deadline to inspect the condition of the property: According to the California Residential Purchase Agreement, the buyer has 17 (seventeen) days or less after acceptance to complete all investigation(s), approve all disclosures, reports and other information available, which the buyer will receive from the seller. In other words, as a home buyer, you have the right to inspect the property and to bail out of the contract if the inspections reports surface issues you would rather not deal with. If you decide to bail out, you have to do it within the 17 days (or less) deadline or you are at risk to lose your initial deposit.
- The As is Clause: According to the California Residential Purchase Agreement a property sold “As Is” is sold in its present condition which is its condition as of the date of acceptance of the offer. As a result, you can ask sellers to pay for repairs or ask for a price reduction when the inspection reports reveal unexpected issues. However, the “As Is” clause places the seller under no legal or contractual obligation to do so. Note that if the seller refuses to accommodate your requests, you can either decide to go ahead of bail out of the contract.
- The Date of Close of Escrow: This is the date when the property will be officially transferred to you. Your name(s) will be recorded in the public records as the new owners of the property. It is crucial that the funds be transferred to the title company 3-5 days before the date of the Close of Escrow if you want to avoid any issues at closing.
Read Part 2 of this blog here
to learn about the provisions which apply if you finance your real estate purchase with a loan.
© Sophia Delacotte CDPE, SFR, CHS
San Jose Realtor
Cell: (408) 717-2575