New Louisiana Purchase Agreement - What's Missing?

By
Real Estate Agent with Home After Home

Have you guys and gals read the new purchase agreement that will be mandated for use by licensees in 2008?  I have.  In Baton Rouge, our purchase agreements have a clause that requires the seller to obtain a termite certificate for the closing.  The wording further requires the seller to have the home treated if a clean termite certificate cannot be obtained.  And, it allows the buyer to cancel the contract if damage due to wood destroying insects in found.

This is not in the state contract that will be mandated to us to use.  Now I know the buyer can go ahead and get the termite certificate.  But, the buyer has to fork out money for the appraisal, the inspection, the good faith deposit, and other inspections all before they purchase the home.  The buyer spends money on the seller's home to verify that the seller doesn't have it overpriced or in bad shape.  Personally, I think the seller should be getting the inspection, but that's another topic entirely.

It concerns me that this wording isn't in the new contract to protect the buyer.  The next question, "Is there anything else that isn't in the new contract?"

By the way, in case you didn't know we are not allowed to scratch out anything on the new contract.

All-in-all, I think the new state mandated contract is a great idea.  I love the fact that people all across the state are using the same form.  What I think needs to be changed in the law is one minor little detail.  The law requires licensees to use the new contract.  It is not required for every real estate transaction in Louisiana -- only those involving a licensee.  Now, if the contract is an agreement between the buyer and the seller, they should be able to write their contract on a napkin if they want, and they can, as long as a licensee isn't involved.

What are your thoughts?

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Rainmaker
413,435
Lisa Heindel
Crescent City Living LLC - New Orleans, LA
New Orleans Real Estate Broker
Bridget, the state mandated purchase agreement probably doesn't have that in there because that is a regional thing.  In New Orleans, the buyer typically pays for the termite inspection and certificate.  It seems that there is a different standard in various parts of the state and that you will need to add this under the "additional terms" section to protect your client.
Aug 26, 2007 03:31 PM #1
Rainer
3,271
Shaun Ramos
M.A. Allen Realty Group - Denham Springs, LA

When I took the class for the new purchase agreement I was newly licensed, and didn't really know much about the current agreement.  Now that I'm very familiar with our GBRAR agreement I'm  taking the class again.  Burk Baker is coming to our office Tuesday to give the class. 

Of all the buyers I've worked with so far, not a single one of them has had a professional home inspection done.  I'm afraid that this will be one of those things that doesn't get done as often as it should if it's the buyers responsibility.

Sep 08, 2007 10:21 AM #2
Rainmaker
413,435
Lisa Heindel
Crescent City Living LLC - New Orleans, LA
New Orleans Real Estate Broker
Shaun - were you representing the buyers that didn't have the inspections done?
Sep 08, 2007 10:29 AM #3
Rainer
3,271
Shaun Ramos
M.A. Allen Realty Group - Denham Springs, LA
Yes, I'm still fairly new, but with the 6 or so buyers I've gotten in a contract  not a single one of them wanted to hire an inspector.  Some wanted to do their own and the others didn't even bother with that.  I think I'm going to type up a waiver of inspection form for when this happens again.  I suggest to every buyer that they get one... they don't listen though.
Sep 08, 2007 10:35 AM #4
Rainmaker
413,435
Lisa Heindel
Crescent City Living LLC - New Orleans, LA
New Orleans Real Estate Broker

Shaun, I don't even give my clients a choice.  After their offers are accepted, I let them know the next step is to have the home inspected and offer them 3 names to call along with the time frame for having inspections completed.  There is a reason an inspection period is in the purchase agreements - it's to protect them!  I would NEVER allow a buyer to bypass an inspection without getting something in writing from them - you need to protect yourself as well.

sorry for hijacking your post Bridget!

Sep 08, 2007 11:26 AM #5
Rainer
6,020
Chris Hutto
Louisiana Dream Home Real Estate Group - Baton Rouge, LA

Hello Bridget,

I would have to disagree with you.  I think the buyer is more protected when he is the one getting the termite inspection.  If the seller gets the inspection, he can choose anyone that he wishes to do it (for example a personal friend or relative that might possibly be less than forthcoming about any signs of damage or infestation that he may find.)  If the buyer is the one getting the termite inspection, then he may choose the inspector.  A termite inspection is inexpensive and a buyer will usually not mind paying this small fee.  This termite inspection can be done during the inspection period.  If termite infestation or damage is found then the buyer can request that the seller have the home treated for termites and provide a termite warranty (at the seller's expense).  If the seller refuses, then the buyer may back out of the contract if he chooses.

Chris Hutto
Realtor
Prudential Gardner Realtors - Baton Rouge, Louisiana
http://www.chrishuttorealestate.com/
chrishutto@chrishuttorealestate.com
(225)229-2912 - Cell
(225)296-0500 - Office
(225)296-0410 - Fax

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Sep 24, 2007 06:59 AM #6
Rainer
2,761
Jim Roberts
Coldwell Banker, J Wesley Dowling - Shreveport, LA

Bridget,

Good post!  This has also been a hot topic up here in Shreveport too.  In our market, the seller usually pays the appraisal, termite and many times pays closing costs or partial closing costs.  We have decided to use contract addendum's to specify who pays what to make it very clear with no confusion. 

Our buyers are responsible for the inspection costs always!  I am convinced inspections are necessary!!!  I have had only one client decline an inspection.  Our company (Coldwell Banker, Dowling) has a form advising clients of the right to inspection.  I make a note on this form of the refusal and have the client initial, date and time the sheet to protect me and the company if all goes wrong. 

I recommend taking the contract class at least two times to fully understand the fine points of the new document.  I took it twice and learned more the second time around.  I think it will ultimately be a good tool but it will be very time consuming explaining everything to our clients.

Good job and good luck with the new contract!

Jim

Sep 26, 2007 03:57 PM #7
Rainmaker
3,067,302
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Contrary to popular opinion, Buyer Inspection Period is not an opportunity for a "free look".  The Buyer must act in "Good Faith" when making a decision to cancel during the inspection period.  Deciding they no longer like the floor plan doesn't count.....

Aug 18, 2010 12:41 AM #8
Anonymous
Anonymous

I am buying a house and the termite report checked off visible damage.  my broker says no lender will loan unless there is a clean certificate.  would a warranty of termite treatment alleviate this issue and continue with the loan process or must the seller repair the visible damage and then get a new inspection?  my broker tells me this is a roadblock

Dec 06, 2012 10:59 AM #9
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Rainmaker
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Bridget Fredericks

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