Buying or selling property anywhere in the world is a high-stakes decision that requires a lot of thought and patience. Even a small mistake can cost you a lot of time and plenty of money. We have some free real estate legal advice in California, irrespective of whether you’re a buyer or seller.
This is why it’s highly advisable to hire some kind of legal advice before buying or selling property, especially in tier-1 cities like California, where the real estate industry is quite complicated. There’s a reason why California has one of the highest concentrations of real estate attorneys in the US.
5 Real Estate Laws in California for Buyers and Sellers
Whether or not you decide to consult an attorney, here’s some legal information that you must know nonetheless:
1. The California Residential Purchase Agreement
The first thing that any real estate attorney in California will tell you is the California Residential Purchase Agreement. It will be your go-to document that outlines all the terms and conditions of the agreement set between the buyer and seller.
The contract isn’t just a piece of paper outlining the terms. It contains even the most minute details that both parties need to agree on before proceeding with the transaction, such as the purchase price, closing date, and any other special obligations that either party must fulfill.
There are three main characteristics of this Purchase Agreement:
- Legally binding: Once both parties have agreed on all the terms outlined in the contract and have signed, neither of them can walk away or disregard the contract without facing legal repercussions.
- Clarity: Since everything has already been outlined in the contract, it gives quite a bit of clarity to both the buyer and the seller, reducing potential disagreements and confusion.
- Protection: The agreement protects the rights and interests of both parties involved. It ensures that both the buyer and the seller are legally safeguarded, covering conditions like failure to meet obligations, contingencies, or breaches of contract.
2. Property Inspections
California’s real estate law requires sellers to give the buyers a comprehensive list of property disclosures, such as information on the property’s current condition, any potential hazards in and around the property, and other defects that it might have.
Buyers have the legal right to conduct thorough inspections of the property during the escrow period to make sure that the property is as per the disclosures mentioned.
However, if you’re a seller and you’re not sure of how to conduct a property survey alone, it might help to consult professionals. In case any minor or major issues are discovered during the property inspections, the buyer can renegotiate with the seller.
3. Title Encumbrances
Sellers also need to uphold their existing title protections while selling their property. This means that buyers need to get a copy of their preliminary title report from the seller.
A title report covers aspects like easements or liens related to the property. Buyers are legally entitled to receive a clear title, which indicates a title without any disputes, to go ahead with the transaction.
In case there are any ongoing disputes under the seller’s name, the seller has to resolve all of them before handing the property to the buyer.
4. Escrow process
Once both parties have agreed on the contract and signed the Residential Purchase Agreement (RPA), the transaction will legally be a part of the escrow process. An escrow is a neutral third-party firm or company that acts as a mediator between the buyer and seller.
It holds all relevant documents, right from the RPA to other legal obligations, funds, and instructions, until all the terms and conditions of the contract have been completed within the given milestone. During this period, the buyer has to make sure that they have the required finances and contingencies to move toward the next process of the transaction.
5. Contingencies – Free Important Real Estate Legal Advice California
Contingencies are terms and conditions that both parties have to agree on before the sale moves forward. Some of the most common contingencies under the California Law are:
- Inspection contingency: If a home inspection reveals major defects or is grossly different from the claims made by the seller, then the buyer can choose not to proceed with buying the property
- Appraisal contingency: This ensures that a property’s appraised value is at par with the actual value
- Financing contingency: These are the finances that the buyer can secure if they are unable to secure a mortgage
Conclusion:
If you’re someone who’s not so legally sound, all the above information may seem overwhelming to you. In that case, please consult with an efficient lawyer who will not only simplify all the legal jargon for you but also ensure a smooth transaction.
Related Content: Legal Tips for Small Business Owners
