FOS’ attorneys have noted a few common myths about the form and its impact on residential real estate transactions.
Myth No. 1:A Buyer Can Always “Get Out” of the Contract.
Once buyer and seller have signed, a Residential Offer to Purchase is a binding contract..
As simple as that sounds, sometimes one party believes the contract can simply be cancelled..
That is only true, however, if the contract specifically allows for cancellation, whether under a contingency (home inspection or financing) or another provision.
Myth No. 2: A Buyer Only Risks Earnest Money.
If a buyer violates or tries to wrongly cancel the contract, the buyer may lose his or her earnest money.
But sometimes that is only the beginning.
The WB-11 form allows a wronged seller to sue for additional remedies, such as damage.
The buyer can also be sued for specific performance–a court order requiring the buyer to perform the contract and buy the property.
Myth No. 3: A Buyer Can Always Control How Defects Are Cured
If a buyer’s inspector identifies residential defects, the WB-11’s standard language the seller to decide how to cure that defect.
The contract only requires that the cure be done in “a good and workmanlike manner.”
The buyer has no right right to review or participate in the cure.
Because the seller’s interest is to do the minimum necessary to cure a defect, the buyer can be disappointed in the result.
Myth No. 4: There is No Real Timeline to Address Defects.
The standard contract’s inspection contingency applies to all inspections, including specialized or follow-up inspections.
For example, if the buyer’s home inspector notes a potential chimney issue, the buyer will likely want to have a chimney contractor inspect it.
That additional inspection (and any written report) must occur well before the original inspections deadline, with enough time for buyer to negotiate with the seller or terminate the contract.
The parties may by agreement modify these and other provisions.
However, the first step towards potential modification is understanding the underlying WB-11 form.
If you are contemplating a real estate purchase or sale, contact your FOS attorney.