Several changes to our most often-used form, the Standard Agreement for the Sale of Real Estate (PAR Form ASR) were approved by the Standard Forms Committee this fall for publication on Jan. 1. The revised form is available now on PAR’s website, along with updated Guidelines for Preparation & Use. To get you started, here are some important changes to learn.
- A title report must be ordered early. Paragraph 14(A) is new and will require the buyer to order a title report within seven days of the execution date. The basis of a home sale is the transfer of good title, and the sooner the parties are aware of any potential clouds or restrictions on the title, the better. While this is usually part of the mortgage process, a report may not be ordered until later in the transaction, after the parties have invested significant time and money in the process. You can read more on this change in tomorrow’s JustListed.
- Details on inspections have been added to Paragraph 12. Starting with subparagraph (A), an explanation of who may attend inspections and the purpose of a pre-settlement walk-through are now in the agreement. Persons who may attend any inspection, other than the inspectors, are limited to the named parties and his or her licensee. Any exceptions to this must be set out in writing prior to the inspections. As for the pre-settlement walk-through, the purpose is limited to confirming the condition of the property. While this was always the intention, the many stories about parties taking advantage of access to the property were plentiful enough that a specific definition was needed.
- The buyer must provide the entire inspection reports to the seller following inspections. Currently, the buyer is only required to provide inspection reports to the seller if requested or with a written corrective proposal. The contract will now specify that inspections reports must be provided in their entirety, and in all circumstances following inspections. Whether the buyer accepts the property, terminates the agreement or wishes to negotiate a change to the agreement, all inspection reports must be provided to the seller.