There is no such thing as a "free peek" clause! Well...at least there isn't suppose to be... As most of us know, the California Residential Purchase Agreement is, shall we say, extremely buyer friendly. And unfortunately in this limited inventory market where buyers are outbidding each other for the few listings available, many buyers (or their agents) are taking advantage of this. I recently had the displeasure of being the sellers agent in an abuse of clause 14b of the RPA-CA. The buyers made a great offer...99% list price, 70% cash, 30% financed, had the pre-approval, showed proof of funds, 3% deposit, 30 day escrow... You know, just a great offer... Hard to not accept an offer like this.
So the sellers did accept it, with the earnest intention of fulfilling their side of the contract. However, within the first week the buyers agent informed me that her clients wanted to cancel the contract. What!?! So I asked, "what's the reason for cancelling?" That's a fair question, right? Especially since the home inspection had not been completed, there was nothing in the disclosures that would validate a cancellation, no appraisal had been completed, etc. To which the agent replied, "they will be cancelling under clause 14b."
Hmmm.... okay, but that's not a good enough reason!!!! Buyers agents are misusing this clause in order to make offers on multiple properties. They tie up these homes for sale by entering into contract, and then they wait for a better deal to come along. And when it does, time to apply the old "free peek" clause and simply cancel the contract while the seller's get zip for having their home off the market. Well, that may have been a valid reason in the past, but that doesn't cut it anymore.
If you find yourself in a situation like this, where there is really no actual cause for cancelling simply based on the 14b contingency, turn it around on the agent. If you ask the agent to provide a reason and they simply use the blanket statement of clause 14b, this may constitute a breach of contract and your sellers may be entitled to keep the initial deposit. As always, talk to your broker or a real estate attorney. Obviously it's never any fun going to court to argue over who gets to keep the deposit, but you might just ruffle the feathers of buyers agents who are getting away with abusing the RPA.