11 Things California Home Sellers Must Know About Reviewing Offers

By Home Bay

Posted on January 25th, 2016

You got an offer – yay! So now what? Deciphering all the legalese can be a little daunting without some guidance, so use this post to learn about the 11 most important things to focus on when reviewing a California home offer.


Before we dive in, we have to do a little shameless promotion. If you list with Home Bay and your offers are submitted through our system, we’ll review them for you and will provide you with pointers, counter offer tips and overall guidance.

  1. Purchase Price:
    No explanation required here — the higher the amount, the better. In the real estate offer form most widely used by the California Association of Realtors (CAR), you will find the Purchase Price in section 1.

  2. Close of Escrow Date:
    This is the date your sale is finalized and is also typically the day you will receive payment for your home. If you are looking at the CAR offer form, the Close of Escrow Date is in section 1. 30 to 60 days is the most common.

  3. Real Estate Agent Commissions:
    If the buyer is asking you to pay commissions, there will typically be information for a buyer’s agent and their brokerage written into section 2 of the CAR offer form.

  4. Earnest Money aka Initial Deposit to Escrow:
    In California, the standard amount of earnest money is 1 to 3% of the Purchase Price. In the CAR offer form, you will find the Earnest Money Amount referenced in section 3A. If the buyer is offering less than 1 to 3%, beware of their ability to successfully close.

  5. Loan Amount:
    This is found in section 3D of the CAR offer form. The lower the Loan Amount relative to the Purchase Price, the higher the probability that the buyer can successfully obtain a loan to close.

  6. Purchase Contingent on the Sale of Another Property:
    In the CAR offer form, see if the buyer checked the box contained in Section 4B. If so, be very leery of the offer because the buyer is saying he or she must first sell their home in order to be able to buy yours. If the box is checked, their offer is commonly referred to as a contingent offer.

  7. Included Items:
    Is the buyer asking you to provide things like furniture and electronics? See section 8B of the CAR offer form to find out.

  8. Tenant Possession:
    If you have a tenant, see section 9D of the CAR offer form. It will tell you whether the buyer wants you to keep the tenant or boot them at Close of Escrow.

  9. Contingency Removal Periods:
    The contingency removal date is the date defined in the offer that buyer will remove contingencies and indicate a firm intent to close escrow. Did the buyer change the defaults for removal of contingencies? The check boxes in section 14 of the CAR offer will tell you.

  10. Liquidated Damages, Mediation and Arbitration:
    Typically the buyer and seller will both want to agree to liquidated damages, mediation and arbitration. If the buyer has initialed all the boxes contained in sections 21 and 22 of the CAR offer form, the buyer is agreeing to them.

Remember, reviewing legal agreements is not for novices. If you need our help, we’re here to assist.

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Posted in Real Estate Negotiations