When purchasing an existing home in Pennsylvania, most buyers and sellers, at one point or another, have entered into standard agreements for the sale of real estate on forms approved by the Pennsylvania Association of REALTORS®. These forms are useful tools because nearly every provision of these agreements has been phrased carefully and subject to revisions over the years (although, in general, this form of agreement tends to weigh in favor of the seller). Nevertheless, both parties often wish to include certain provisions for their benefit and, depending on whether the real estate attorney is representing the buyer or seller, certain modifications may be proposed and incorporated by addendum or otherwise. Remember, even though the agreement of sale is a form, its terms can be negotiated prior to signing. You are not simply “stuck” with the terms on a form agreement.
The scenario changes when a purchaser contracts with a builder/developer for the construction and sale of a residential property, in which a builder agrees to construct a house on certain real estate and, upon the completion of construction, to sell that home together with the real estate to the purchaser.
Because the builder/developer often prepares its own form of agreement, specifically suited for its own purposes, a buyer would be wise to have the agreement reviewed and negotiated by a real estate attorney. The agreement may be modified to represent the understanding of the parties with respect to what terms, conditions, warranties and disclaimers are part of the deal and what materials and fixtures are to be included in the purchase price. On several occasions, prior to negotiating the terms of an agreement of sale, I have been told by clients (as well as the realtors for the builder), that the builder had advised them that it “never changes a word” in its form of agreement. In each of these occasions, we have been able to negotiate favorable terms for our clients.
Different issues arise in each of the contracts, but certain issues tend to crop up more often than not. For example, it is preferable to have terms limiting the amount of time a builder has to complete “punch list” items. If not, a buyer could potentially be living in a newly constructed home for months before the builder returns to complete those items which, while not material to the use of the house as a home, are annoying just the same. Other issues include the amount of “extras” which the purchaser will be required to pay up front and what amount may be paid at the time of closing, and the ability of the purchaser to have a house inspector inspect the house to verify compliance with applicable building codes and the plans and specifications of the home.
Dealing with these issues prior to the purchase of a new home can prevent serious problems down the road.
— Denise Ciampitti