Like any other contract, the Residential Purchase Contract is composed for the protection of both home buyers and sellers. While in contract, both parties have to negotiate in good faith. The term good faith is an abstract and comprehensive expression that encompasses a sincere belief or motive without any malice or the desire to defraud others.The buyer immediately puts down a good faith deposit written in the purchase contract declaring their commitment to buy that home. Attorneys prepare these contracts with consumer protection as the highest priority. Both sides have obligations and timelines that have to be met. Homebuyers have numerous contingencies that protect them throughout the process including the inspection contingency.
They can have as many inspections as they deem necessary during that phase. Any defects found during the investigative stage can be negotiated prior to the contingency removal. Unless specified otherwise, many homes are being sold in “as is” condition. Sellers have to realize that an “as is” sale will not garner a top of the line price and is not the preferred way of selling a home.The loan and appraisal contingencies are to protect the buyer from buying a property at higher than market value. A lender will not loan on a home whose value can’t be substantiated.
Just as a seller can’t expect a fair market price selling their home in its present condition, a buyer should not anticipate negotiating a below market price and then assume the owner will complete every minor repair found during the inspections. That’s negotiating in good faith. When it comes to disclosures, honesty is the only policy. Any known defects should be noted and disclosed. Buyers have the right to review and approve all of the disclosures during the contingency period. Non disclosure is probably the main reason a buyer and seller could be combatants in a legal dispute.
Most home sales run smoothly with few roadblocks, but occasionally there will be that disagreement that can’t be worked out between buyer and seller. If communications break down and buyers and sellers can no longer work in good faith, the best resolution might be to dissolve the contract. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying and selling a home, scan my informative blogs, join my professional networks on Twitter and LinkedIn and easy access to view local area homes for sale in Davis, California and the surrounding communities.