May 24, 2009
Most consumers don’t realize that there are two sets of real estate forms used by Realtors and other real estate professionals in Silicon Valley and nearby areas. The California Association of Realtors provides the paperwork found throughout most of the state (“CAR forms”). The Peninsula Regional Data Source authors a more regional set (“PRDS forms”).
Did you realize that they are a little different, and each provides different protections and “teeth”?
Here are a couple of the key differences within the purchase agreement between buyer and seller:
- The CAR purchase agreement is an “as is” form; the PRDS purchase agreement states that the home will have certain basic conditions met (no leaks, all systems functional)
- The CAR purchase agreement allows repairs to be done by a handyman; the PRDS form requires that repairs be done by a licensed contractor
- One has more penalties built in for defaults; one allows the seller to cancel more easily on a buyer who’s not performing
The listing agreements vary too – one protects the agents’ position better than another.
There are pros and cons to each of these sets. When you go to list, sell, or purchase a home, be sure to discuss the plusses and minuses of each with your agent. One set is not 100% better for you as a buyer or a seller. There are clauses in each, though, which may protect your interests best.
One caveat: if you are buying a bank owned home, it is very likely that the bank will require you to use the CAR form. They cannot get up to speed on regional contracts and they will insist on the “as is” nature of the CAR form (PRDS can also be “as is” if a box for that is selected). Some banks may use their own forms, or send back an extremely lengthy addendum that may cancel out half the clauses in whichever purchase agreement you use. Don’t be afraid to seek out a good real estate attorney if that is the case. Realtors and other real estate salespeople are not attorneys and this would be an ideal time to call in professional legal help.
Something else to consider is that you may be able to use some paperwork of each set. CAR has a myriad of forms for realty transactions, many more than PRDS does. One of the best addenda in use today is the CAR short sale addendum. It is exceedingly clear about timeframes and responsibilities. Just because you are working with a PRDS purchase agreement does not make a CAR addendum unusable in most cases.
Buying and selling real estate in Los Gatos, Monte Sereno, Saratoga, and San Jose does involve a lot of options and decision making. This is another element to consider because just like all the other choices you face in home buying or selling in Santa Clara County, the choice you make on the forms you’ll use may impact your outcome. Hire a good agent who works with both sets, can explain the pros and cons of each in terms of your position, and is not dependent on just one of them alone.
