When a buyer submits a quote for a home, one of the steps to follow is to fulfill a purchase contract with the help of their agent. As part of this contract, they can determine, among other things, what they intend to pay and when they want to conclude. Aug 2, 2019 Some buyers and sellers are not sure of the costs they are responsible for in a real estate transaction, so today we are going to get to the bottom of this common dilemma. When a buyer submits a quote for a home, one of the steps to follow is to fulfill a purchase contract with the help of their agent. As part of this contract, they can determine, among other things, what they intend to pay and when they want to conclude. Today, we are focusing on a particularly important part of this contract: the allocation of costs. This section (also known as Section 7) of the California Residential Purchase Agreement is the part of the real estate agreement that specifies what the buyer is willing to pay and what costs the seller must cover. Paragraphs 7 to 7A, 7B, 7C and 7D contain four subparagraphs. Paragraph 7A covers inspections, reports and certifications. Section 7B covers government requirements and renovations. Paragraph 7C covers the security and the escrow account.

Finally, paragraph 7D covers all other costs. Everything in this section of the contract is negotiable, but a precedent has been set for which the party usually bears each given expense. With that in mind, let`s check out what`s common to each of these categories. “Everything in this section of the contract is negotiable, but a precedent has been set for the party that usually bears each given expense.” 7A: Inspections, reports and certifications. This section is completely empty when the buyer receives the contract, so he and his agent will have to fulfill it, depending on what is appropriate for his specific business. Natural hazard inspections are common in our area, so this is something most buyers should plan for. Typically, buyers will ask the seller to pay for this inspection, identifying potential natural hazards that could threaten the home. The buyer can also ask the seller to pay for a pest inspection that identifies any active infestation of wood-consuming organisms such as termites. When it comes to the general inspection of homes, it is generally expected that buyers will bear these costs themselves. 7B: Regulatory requirements and renovations.

Items in this category include things like smoke or carbon monoxide detectors, which are now needed in every home. And in the state of California, all water heaters require seismic strapping. Most of the time, sellers are expected to take over the modernization of these items. 7C: Title and escrow. In Southern California, it`s common for buyers and sellers to share escrow fees, or at least pay their own. It is also typical for the seller to pay for the title insurance of the new owner. However, the buyer pays for title insurance from their own lender. 7D: Other expenditures. This paragraph generally includes expenses such as county transfer taxes that the seller usually pays. The smoke inspections required in Palm Springs are usually also handled by the seller. If the property happens to be in an owner`s association (or HOA), the seller is usually responsible for paying the HOA document preparation fee – the fee that allows the buyer to obtain all relevant documentation related to the obligations, codes and restrictions of a particular HOA. Hoa transfer fees are another item that the seller is often asked to pay.

In this section of the paragraph, the buyer must also indicate whether they expect the seller to pay in the first year of their home warranty. If you have any further questions or would like more information about what this section includes, or any other aspect of the real estate process, give me or my team a call or send us an email. We look forward to hearing from you soon. 7A: Inspections, reports and certifications. This section is completely empty when the buyer receives the contract, so he and his agent will have to fulfill it, depending on what is appropriate for his specific business. Natural hazard inspections are common in our area, so this is something most buyers should plan for. Typically, buyers will ask the seller to pay for this inspection, identifying potential natural hazards that could threaten the home. The buyer can also ask the seller to pay for a pest inspection that identifies any active infestation of wood-consuming organisms such as termites. When it comes to the general inspection of homes, it is generally expected that buyers will bear these costs themselves. Some buyers and sellers are not sure of the costs they are responsible for in a real estate transaction, so today we are going to get to the bottom of this common dilemma. 7B: Regulatory requirements and renovations. Items in this category include things like smoke or carbon monoxide detectors, which are now needed in every home.

And in the state of California, all water heaters require seismic strapping. Most of the time, sellers are expected to take over the modernization of these items. 7C: Title and escrow. In Southern California, it`s common for buyers and sellers to share escrow fees, or at least pay their own. It is also typical for the seller to pay for the title insurance of the new owner. However, the buyer pays for title insurance from their own lender. Everything in this section of the contract is negotiable, but a precedent has been set for which the party usually bears each given expense. With that in mind, let`s check out what`s common to each of these categories. This section (also known as Section 7) of the California Residential Purchase Agreement is the part of the real estate agreement that specifies what the buyer is willing to pay and what costs the seller must cover. .