Is our sale in danger after purchasers bring up adding a replacement buyer?
Oct 08, 2023Marketwise for the Bay Area News Group and its flagships The Mercury News and East Bay Times
By Pat Kapowich | Published: August 16, 2022
Q: We thought we were selling our home to a young couple. Not so, apparently. The agent representing the buyers told our seller’s agent that the young couple is adding a buyer. It was quite a surprise. The buyer’s agent used the term “floating the idea” of having the young couple replaced as the buyer. Something is amiss. The young couple shared their plans for our house and their young family.
We are relocating from the Bay Area and signing a contract with the mover. We bought a new house under construction in a development. We just rented a home near our new housing tract. This news of switching or replacing the homebuyers is very troubling.
When switching homebuyer(s) two weeks from closing escrow, what are the odds our sale will fall apart?
A: If I were a betting man, and I’m not, I’d wager that your home sale will close escrow. Thanks to home-flipping real estate markets, assignments do not have a good reputation in residential real estate circles. Since this is not a home-flipper marketplace, the buyers and assignee(s) must want your house as a home.
But closing escrow and closing on time are not the risk management issues that are most important.
It is alarming for sellers and their agents to learn the homebuyer is exercising their right of assignment. Real estate purchase contracts have an assignment paragraph hiding in plain sight. For instance, in the California Association of Realtors Residential Purchase Agreement and Joint Escrow Instructions, the assignment segment is paragraph 23 on Page 12 of 16. Sellers and seller’s agents are hyper-focused on paragraph 3 on Page 1 regarding price and the proposed date to close escrow. Unfortunately, they are often unfocused on so-called boilerplate sections in the back of the contract. That’s why assignments are such a surprise.
Real estate attorneys are concerned that the assignee might not receive and approve the seller’s disclosures, reports, and inspections. Real estate attorneys remind us that homebuyers file almost all the claims in California. The home sellers can protect against being defendants by over-disclosing. All the more reason that assignees joining the transaction at the eleventh hour must verifiably receive home sellers’ reports, inspections and disclosures 15 minutes later. To help you manage risk, use the C.A.R. Assignment of Agreement Addendum (C.A.R. Form AOAA). It is your guide to a safer assignment, especially regarding the delivery of documents.
Questions? Or are you or someone you know navigating life’s transitions? Let lauded negotiator Pat Kapowich make your next move easy. Visit Kapowich’s website for free area housing data, insights and trends. Or put his artful blend of specialized credentials, decades of experience and endorsed skill set to work for you. Kapowich instills confidence when buying, selling, relocating or resizing homes. Do not just make a move — make the best move. Contact him today, Realtor Pat Kapowich, a career-long consumer-protection advocate.
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