Mary

Having an attorney in each state tended to cause more problems than it solved. In Texas for instance, the contract favored by many calls for a fee to be paid for the ‘due diligence’ period. It goes directly to the seller, yet is applicable to sales price if the sale closes.

I don’t raise my eyebrows at much these days.

Thanks for your feedback, we appreciate it!

I can’t imagine how complicated it must be to have a variety of contracts (one per state in most cases?) to work with and understand - especially with all the the nuances! Smart idea to run them all past an attorney who understands what’s what. So you have one attorney review them all, or an attorney in each state where you do business?

Thanks again for your thoughtful feedback.

Mary

Whether ‘as is’ or with warranty, the different states and their differing real estate cultures have made for some interesting times. We eventually threw in the towel and decided to have a central clearing house — a round about way of saying a real estate attorney vets just about everything.

You’ve really struck a chord with this topic.

Thank you for the kind words on my post.

You raise an excellent question about who chooses which contract(s) to use (the listing agreement is also a little different from one series to the other). In fact, I once attended a “Legal Update” in which Ron Rossi, a local real estate attorney, discussed this very question. As agents, we really need to talk to our clients about the pros and cons of these forms so that they are able to be better informed and, if possible, choose the form that will best enable them to get what they want in the negotiation. The selection of the contract is, in itself, a negotiation of sorts. Best to do it with the full consent of our principals!

In most of the state (and in the vast majority of the San Francisco Bay Area), the CAR form is used - and the PRDS form is really unknown. It is simply off the radar. In other areas (from Los Gatos to South San Francisco), the PRDS contract is the standard. I’ll give you a little background on this, in case you’re wondering about the gerrymander-appearing boundaries for what’s where.

Historically, the south Bay had a couple of different real estate boards to which members (Realtors) belonged, and the use of one contract or the other pretty much fell along party lines - or political boundaries.

(1) Los Gatos and Saratoga used to be the “Saratoga Los Gatos Board of Realtors” and they were connected to a group of other smaller boards stretching up into the Peninsula to about San Francisco. (These associations kept changing over time - eventually the local ones merged into SILVAR, the Silicon Valley Association of Realtors. It includes Los Gatos, Monte Sereno, Saratoga, Cupertino, Sunnyvale, Mountain View, Los Altos, Los Altos Hills and Palo Alto.) These areas traditionally use the PRDS form (Peninsula Regional Data Service).

(2) The old “San Jose Board of Realtors”, which is now known as SCCAOR or the “Santa Clara County Association of Realtors” traditionally used the CAR form.

(Campbell and Santa Clara agents sometimes belonged to one board, or the other, or sometimes both.)

Anyway, that’s the situation in terms of tradition or habit. Some agents are trained on only one contract, and therefore insist on its use. (Obviously, this is not very good for the consumer, but it is probably worse for agents to use forms they do not understand well.) In a sellers market, of course the listing agent can insist on which form to use. In a buyers market, the listing agent is unlikely to complain about the choice of form when an offer comes in - the buyers’ agent can pretty much decide.

When I work with buyers and sellers, I explain to them that both series of forms exist, and that there are pros and cons to each. When I work with buyers, of course I’d prefer (most of the time) to use the PRDS form because, as you note, it requires the seller to do certain repairs. You don’t have to squabble to get them agreed to later. Sometimes, though, the CAR form can be preferable. It really depends on the situation.

It is interesting to see what happens when a buyer uses the PRDS form and the sellers’ agent has the seller accept it, but without understanding that it’s not the same as the CAR form. (Great for the buyer, a bad surprise for the seller.) It is imperative to actually read and understand what you’re signing. Guy Berry, a local real estate broker and trainer, teaches a course, “What Does The Contract Say?” with the point being that agents (and consumers) need to read and comprehend what’s actually there in the form rather than assume that all the forms are the same because many of the phrases are identical.

Glad to hear that your last transaction worked out in your favor, Blake. Sounds like you had a good agent helping you out.

Thanks again,
Mary

Question: Who makes the decision about which type of agreement is used? Is the seller generally presented with the contract choice by the agent? If so, I can’t imagine why the sellers of our current home chose to do so. If not, seems like their agent did them a dis-service.

Also, thanks for the nice welcome to 1SiliconValley!!

Mary