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Contract Series Paragraph 16 Change

George Clements ~ Greenville, SC Real Estate

 

Well, the Contract For Sale just had a major change while I am in the middle of this series.  Paragraph 16 had a clause added to it that I am not sure that I like.  It looks something like this:

 

(B) Rig ht to Termi nate: Prior to the expiration of the Inspection Period, Purchaser ___ will ___ will not have
the unilateral right to reject the condition of the Property and to terminate this Contract, upon written notice
to Seller or Seller’s Agent. If such termination rights are exercised, Purchaser shall be entitled to a return of
the earnest money (subject to the release requirements of Paragraph 14). If such termination rights are not
exercised, Purchaser and Seller shall proceed as provided below.

 

This is basically saying that the purchaser can back out of the contract for any reason during the inspection period.  In my opinion, this makes the rest of 16 worthless if "will" is checked.  It also makes the amount of earnest money worthless.  The purchaser would have to do this before the inspection period ran out so this will make sellers want that period to be as short as possible.

So how would this play out?  A home goes under contract.  The inspection is done.  There could be no problems with the house at all but the inspection report might say that there is a small spot on the carpet.  The purchaser could give written notice to the seller and say we don't want to buy the house anymore for something as small as that.  In the meantime the seller has wasted precious listing time and missed out on other possible puchasers.  

Of course, if I were a buyer, I would want this to be checked because it gives me a huge advantage over the seller.  We'll see how this plays out but I think it is going to greatly increase the number of transactions that fall through.

Comment balloon 0 commentsGeorge Clements • April 01 2008 02:19PM

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