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I am in negotiations to purchase a new construction townhouse in Los Angeles county. The property has about 20 units and has been on the market for over 100 days likely becuase it was overpriced initially, but also because the property has not received FHA or Fannie Mae approval yet. We decided to include several contingencies in the contract. Do you think these are acceptable?
1. If property does not receive FHA approval prior to close of escrow, buyer is refunded all deposits and contract void.
2. If property does not appraise for sell value, buyer refunded all deposits and contract void.
3. Buyer approval of CC&Rs; if not satisfactory, buyer refunded all deposits and contract void.
4. Property inspectiion; if not satisfactory, buyer refunded all deposits and contract void.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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All of those except #1 are included (or checkable) in the CA assn of realtors standard purchase agreement. If you want to write #1 in as an additional clause, I see no problems.
Unfortunately, our contract is NOT the CA standard purchase agreement but rather a specific contract drawn up by the seller for this specific property... Makes me a little concerned by they didn't use the CA standard purchase agreement contract...
Unfortunately, our contract is NOT the CA standard purchase agreement but rather a specific contract drawn up by the seller for this specific property... Makes me a little concerned by they didn't use the CA standard purchase agreement contract...
I would then suggest that you work with a knowledgeable Realtor or real estate attorney in order to protect yourself. It's not unusual in my area for the owner of new construction to want to use their own contract as it is in their best interests. However, if they want to sell badly enough to a qualified buyer they need to consider your best interests. It would definitely be in your best interests(and protection) to include appropriate contingencies. I have dealt with many new construction contracts and have little problem getting appropriate contingencies put in to protect my buyer.
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