Most home sales in California use the standard Residential Purchase Agreement provided by the California Association of Realtors. It’s an eight page document and has a number of important provisions in it. Regardless of what purchase agreement is used, all purchase agreements include the following elements:
Purchase Price: this is the total amount to be paid for the property, but keep reading – the buyer may ask for costly concessions.
Earnest Money Deposit: this is the buyer’s initial deposit, which shows that they are serious buyers. The initial earnest money deposit is usually fully refundable, until the buyer releases all their contingencies for the purchase.
Length of Escrow: this is the number of days after acceptance, or a specific date upon which, the sale of the property will close.
Length of Contingency Period / Due Diligence: the number of days the buyer has to complete their due diligence and secure their financing will be set in writing. These dates may be the same or different.
The allocation of costs: that is, who pays for what, and in what proportion.
The language of the purchase agreement should include language that specifies the property is to be sold as-is, and that the seller will not be required to make any repairs, or issue credits or reduce the price for any reason whatsoever.
The purchase agreement will also include language in the “fine print” about the seller’s right to cancel – which, by the way, the seller typically does not have any right to cancel the contract, unless the buyer fails to perform as the contract requires.
And, of course, there’s a lot of other fine print, with a number of important terms and conditions. I have developed an explanation of the standard California purchase agreement, and it is included in the resources section of this website.