Palm Desert Real Estate - The Residential Purchase Agreement
In Southern California we use an eight page Residential Purchase Agreement for sellers and purchasers to sign regarding the sale of a residential home or condo. These eight pages hold a lot of information and form a binding contract, which your Realtor should walk you through when signing.
In California, the Purchase Agreement pertains to mediation and arbitration for dispute resolutions, which both the buyer and seller are asked to initial. If there is a dispute between a buyer and a seller that can not be resolved, these dispute resolutions would be considered. Here is what you are initialing and why (courtesy Paul D. Bojic, Esq. Bojic, Pyfrom & Associates):
You Need To Mediate
The Purchase Agreement provides that if there is a dispute between the seller and buyer, that dispute must be mediated. Mediation is a non-binding form of dispute resolution. The mediator shuttles between the seller and buyer in attempt to settle the matter. If the mediator fails to find common ground, the dispute moves back to the litigation track. Mediation does not work well with unreasonable parties.
If the seller and buyer cannot resolve their dispute in Mediation, and if the seller and purchaser initialed the arbitration provision of the purchase agreement, then the seller and purchaser must submit their dispute to arbitration. Arbitration is a binding form of dispute resolution. The arbitrator listens to the facts and then renders a judgment. The arbitration is conducted like a trial and the decision of the arbitrator is final.
Seller and Purchase Do Not Initial the Arbitration Provision
What happens if the seller and purchaser do not initial the arbitration provision of the Purchase Agreement? A lawsuit is filed and all parties head to Court. This process could take years (yes….years). In Mr. Bojic's opinion, nothing good happens at the courthouse!
Purchasing a home may be the biggest investment of your life, work with a Buyer's Agent who has a proven history. Contact me today.