REAL ESTATE CONTRACTS ARTICLES
There’s a Big Difference Between Special and General Warranty Deeds
Question: Two years ago we bought a home in Laveen as an investment. We received a special warranty deed from the seller. We are now selling the Laveen home, and the title company is demanding that we sign a general warranty deed because the title company wants “more protection.” What is “more protection?” Answer: You first have to understand the difference between a general warranty deed and a special warranty deed. With a general warranty deed, the seller warrants good title to the home from the beginning of time. With a special warranty deed, however, the seller only warrants good…
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Canceling Purchase Contract After Inspection Period
Question: We signed the standard AAR Purchase Contract (“Purchase Contract”) for the purchase of a Gold Canyon home near the Superstition Mountains. During the 10-day inspection period the seller agreed to make the minor repairs that our home inspector had recommended. We then flew back to Canada. Three days later our real estate agent called us to say that there had been a large monsoon which caused significant damage to the roof and some damage to the living room wall. The seller’s real estate agent told our real estate agent that the seller will fix everything before close of escrow.…
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Can Listing Agent Bind Seller to Purchase Contract?
Question: In a recent column a buyer made a $480,000 offer to purchase a Casa Grande home. The listing agent emailed the buyer’s agent, “Sounds good. Let’s open escrow. Seller signing the purchase contract.” The seller then sold the house to another buyer for $510,000. Your answer was that the email of the listing agent was binding on the seller to sell the Casa Grande home for $480,000. At our Tuesday brokerage office meeting, almost everybody in the office disagreed with you. Please explain your answer. Answer: First, the answer to the question was “probably.” This area of the law…
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Can Seller Cancel Listing Agreement?
Question: We signed a listing agreement to sell our Glendale home for $780,000. Our listing agent said that she had listed and sold 16 homes in our subdivision. Although our listing agent said that the listing price of $780,000 was too high, we were in no rush to sell our home in this “booming” market. Therefore, we refused to lower the $780,000 listing price. After two months our listing agent has not brought us one offer, although a similar home in our subdivision just sold for $755,000. We asked our listing agent to have an open house, but she said…
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Buyer May Want To Waive Home Inspection
Question: In a recent column you said that, if the seller was unhappy with the sale price of the home and as a result would not allow a home inspection by the buyer, the buyer could waive the home inspection. In other words, you said that the buyer should “suck it up” because the seller wanted more money! You obviously do not understand the terms of the AAR Purchase Contract. First, the seller has signed the AAR Purchase Contract, and therefore has agreed to all terms and conditions, including a home inspection by the buyer. Second, lines 302-303 of the…
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What Provisions To Review In Commercial Lease
Question: My son wants to open an 1,100 square foot frozen yogurt shop in a large Mesa shopping center. The shopping center leasing agent gave my son a 32-page lease with 7 exhibits for my son to review. My son can’t afford a lawyer to spend hours reviewing this 32-page lease and seven exhibits. Therefore, I will try to help him because I am a licensed real estate agent, but I sell homes and know very little about retail leases used by shopping centers. Any suggestions? Answer: When we review a retail, industrial, office, or any other commercial lease for…
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Listing Agent’s Representations Can Be Purchase Contract
Question: We made a full listing price offer of $480,000 with $20,000 earnest money for a home in Casa Grande. Our real estate agent emailed our $480,000 offer to the listing agent who emailed our real estate agent back the next day “Sounds good. Let’s open escrow. Seller signing the purchase contract. Will send tomorrow.” After we received a copy of this email from our real estate agent, we thought that we had a contract. We then scheduled a home inspection, called our mortgage broker and filled out some paperwork, and paid $250 to a roofing company for a roof…
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Is 10-Day Inspection Period A ‘Free Look’?
Question: We signed a purchase contract to sell our Rio Verde home to Los Angeles buyers for $1.2 million with $50,000 earnest money. During the 10-day inspection period the buyers cancelled the purchase contract and demanded their $50,000 earnest money back. Their only reason for cancellation of the purchase contract was that they would be too far away from Scottsdale Fashion Square and the downtown Scottsdale area with restaurants, shopping, etc. We think that the buyers just found another home that they liked better than our Rio Verde home. Therefore, we don’t want to give the buyers back their $50,000…
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