The California Real Estate Purchase Contract
May 25, 2010
I had an occasion today to receive a copy of a real estate contract from the State of Michigan. Upon reviewing this document I felt compelled to share with my fellow California Realtors the fact that the contract there is only 4 pages long. I am sure that Michigan Realtors think that this is a lot of paperwork but compared to California whose pages total about 40, it is wonderfully brief and simple. Yes, the language is still all legalize and double talk but there is so little that you can pull out your dictionary, do some research and be finished reading it within 15 minutes. I tell my clients in California to take it home, read up, pinch yourself when you fall asleep and pour yourself a cup of coffee (or a large glass of wine depending upon what time of day it is), because you are in it for the long haul.
Why do you suppose that this contract can be so different in the two states and yet they both convey the same idea and accomplish the same job? I ask myself this question and can only come to one conclusion. California Realtors and their clients have experienced way more lawsuits based on the transfer of real estate. The length of the contract, I believe, is an attempt to “cover all of the bases” in the hope that a lawsuit will not occur.
California used to have bragging rights on being the state of the environmentally conscious. Considering all of the trees that the real estate contract and appurtenant disclosure documents have killed, I believe that crown has slipped.
It is because California is a very pro consumer protection rights state. We have litigation in this state of the drop of a hat. Attorneys know that insurance companies will settle long before going to court. So contract in California are born out of the myriad of lawsuits we see filed day after day. Nothing wrong with longer forms and paperwork, it’s just part of the State we live in.
Kappy
you are so right!
when i got into the RE business in 1978, the contract was like 2 pages long and the entire file was the size of a small manilla file folder.
today, the file ends up being about 4 or 5 inches thick.
while the additional paperwork does attempt to protect the consumer as Ted suggests, the reality is the most important factor for the consumer – the buyer or seller – is the integrity and knowledge of their real estate agent.
dishonest folks can still hurt consumers if they want.
the consumer buys or sells what maybe 4 or 5 homes in a lifetime, there is no way they can have a deep understanding of the process.
that’s why having a real estate agent you can count in is most important.
agents in CA are to be fudiciaries – which means they have to handle the affairs of their clients with some the same care and skill as agents would for themselves.
it is the highest level of legal responsiblity an agent can have.
Arn