Every year the Pennsylvania Association of Realtors reviews different forms. Last year the Pennsylvania Agreement of Sale was given a review in light of comments from Realtors using the form. These changes are just about to be released with the new version of the Agreement of Sale in 2010. There are a lot of changes to language but let's discuss a few of the highlights.
How will these changes affect you as an agent, a seller or as a buyer? As an agent you need to become conversant with the new forms and what changes have been made and how these affect your customers.
As a seller or buyer the forms now have all parties involved in the transaction located on the front page with the address of the property, zip and school district noted as well. Not only is broker information provided but also all contact information for the agent handling the transaction for each party.
The seller assist has been moved to right below the offer price, so it is now more obvious to a seller if they are being asked to provide any monetary assistance to the buyer. Whilst this does not show the net the seller will receive it does make it more understandable and gives less chance of being missed in a review of the agreement terms.
The mortgage block now includes a loan to value appraisal option for both the first and second mortgages if this contingency is selected, alternatively you can still use a separate appraisal addendum. Buyers if using the defaults are now required to act quicker to apply for their mortgages and arrange appraisals. Also buyers are required if given the option by their mortgage provider to lock their loan rate not less than 15 days before settlement.
Under inspections gone is the confusion between option 1 and 2. There is now only one option that requires the buyer to either terminate the transaction or submit a written corrective proposal to the seller within the agreed time lines. Each inspection is now initialed to select or waive, making it much clearer what inspections are being selected, these include an option for a survey, not usually done in Pennsylvania but not a bad idea if you want to be certain of what you are buying. Again time lines have been tightened up.
New language has been inserted to cover the oil, mineral and gas rights that have become a large issue in many parts of the state due to the Marcellus Shale and the natural gas rights being leased.
All paperwork, other than homeowner and condominium documents if delievered to the agent for the buyer or seller is considered delivered to the seller or buyer. However, condominium and home owner association documents must be delivered to the buyer direct before time lines take effect.
Another big change is the information regarding deposits and how they will be distributed in case of a dispute and how this can actually be decided by both parties before there is a dispute.
Mediation is a now a default rather than being selected.
As I said these are just a few of the changes to the new agreement of sale, when writing an agreement make sure you understand fully what you are agreeing to and take time to read over the notes as well as the agreement itself.
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