C.A.R. stands for California Association of Realtors. Most, but certainly not all, agents and brokers belong to this association that are licensed in the state of California. Agents and brokers pay dues to belong to this association. C.A.R provides many resources to agents and brokers. One very important benefit is providing contract forms to its members. Undoubtedly if you have purchased or sold a home in the state of California, you have become familiar with these contracts. There are many different contracts depending on the situation. For example there is the listing contract and there is the purchase offer contract. Most sellers and buyers may look at these contracts as, well, just contracts, but they are very important. These contracts are reviewed by C.A.R. real estate attorneys 4 times a year. Changes are constantly being made, all for the benefit of sellers and buyers. New contracts are also created. Just a few years ago there weren’t too many contracts devoted to Short Sales and Real Estate Owned properties. Now there are many. It is important to note that these contracts protect sellers and buyers. Badly worded contracts are the cause of lawsuits. Every once in a while agents and brokers find clients that want to change some of the language of these contracts. Not saying it can’t be done, because it can, but caution is advised. Agents and Brokers are taught from the beginning of their careers, not to ever act as an attorney or give legal advice. Making requested changes to contracts can force agents and brokers to do just that. It is dangerous not only for them, but also heir clients. If a seller or buyer wants to make changes to preexisting C.A.R. real estate contracts they should seek the advice of a real estate attorney. These C.A.R. contracts are well thought out by C.A.R. attorneys. One of the benefits of sellers and buyers using agents and brokers that are members of C.A.R. is being able to use these contracts. It is a good idea to become familiar with these contracts. Read them and understand them. Use C.A.R. contracts when selling or buying your next home.

See Contracts part 1 here

See Contracts part 2 here

Before you sign a real estate listing contract with a real estate broker, know exactly what you are getting into. Generally there are three types of listing contracts most sellers will be exposed too.

1. Residential Listing agreement (Exclusive Authorization and Right to Sell). This form is an exclusive contract. If the property described in the contract is sold, transferred, leased, rented, withdrawn from sale or otherwise made unmarketable by a voluntary act of the seller during the listing period, the seller owes the broker the agreed upon commission. It doesn’t matter who brings in the buyer or whether the property is sold by the efforts of the seller or the efforts of another person or licensee. This contract is probably the one most preferred by brokers. Why? Because it protects them from not wasting their time in the expense of marketing the property only to loose it if the seller or someone else sells it. This concept will become clearer when the other contract are explained below.
2. Residential Listing agreement (Agency Authorization and Right to sell). This listing contract is similar to the exclusive Authorization and right to sell with one big difference. It reserves the right of the seller to sell the property directly to a purchaser without any obligation to pay compensation to the Broker unless otherwise specified elsewhere is writing. The seller may have had contact with potential buyers before the listing contract is signed. Or during the listing period a potential buyer may contact them and not because of any efforts of the listing Broker. In other words the Broker had nothing to do with these potential buyers contacting the sellers. A better way for the seller is to sign the Exclusive Authorization and Right to Sell. #1 above. In that agreement the seller can list potential buyers they had contact with before the signing of the listing contract. So if one of these potential buyers wanted to purchase the property during a specified time, the seller would not owe compensation to the Broker. A Broker may agree to this type of situation, but only for a period of time. These potential buyers would probably not be excluded for the entire duration of the listing.

The third listing will be explained in the next post.

List of California Real Estate Forms