Beware Mandatory Addendums that Aren’t Mandatory
Posted on April 20th, 2008 by Jonathan Dalton
Let’s bring back an old topic for a brief revisit - the so-called “mandatory” adult communities addendum some agents in the Phoenix real estate market, particularly those working in any of the Sun Cities or other neighboring communities such as Westbrook Village and Ventana Lakes say are “required.”
In short, these addenda are not required. These forms date back before the 2005 changes to the Arizona Residential Resale Purchase contract and some of the language regarding the fees to be paid and who is responsible for the fees contradicts the new contract.
Virtually no fees automatically are signed in the contract. Not title policies. Not the cost of the appraisal. Not discount points. Not the cost of the home warranty. Not even the loan origination fee for the buyers’ loan. All of these are negotiable.
So too are the fees common to active adult communities - capital preservation fees, resale disclosure fees, transfer fees, etc. You wouldn’t get this impression reading many listings in these areas as there’s often language that the buyer must pay the fees - as if this isn’t open for discussion in a market where homes remain on the market for months.
One of the things the adult communities addendum does is lock the buyer into paying what traditionally are buyer expenses. Which is well and good, unless you represent the buyer and are trying to negotiate the best possible deal on their behalf.
Two weeks ago, my clients closed on a house on the water in Ventana Lakes. We did so without the “mandatory” addendum (the listing agent apparently shares my view as no demand to include the addendum was made.) And we did so with the seller picking up the cost of the transfer and preservation fees.
One of my objectives when I started working in Westbrook Village was to change the way business there was done, even if only by a little. Conceited? Perhaps. But we’re already on the way simply by attracting buyers electronically through the Internet, something some skeptics in my own office said couldn’t be done.
Of course a pretty website with some Google juice isn’t enough. You need to know the ins and outs of the homes on the market. And you need to know what really is required and what truly is negotiable. Otherwise you could be costing your buyers hundreds of dollars in the name of what’s always been done.
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