by Mary Pope-Handy | Apr 20, 2023 | Buying Tips, Contracts & Forms, Most Popular Articles, Selling Tips
If you are buying or selling a home in Silicon Valley today, you may be considering including the option to have a seller rent back after closing. What does this mean?
What is a rent back?
A rent back refers to the seller staying in possession of the home after it’s been sold to the new owner. Sometimes it is free, other times there is a cost. Normally, a security deposit is paid and held in escrow or by the new owner. (These are sometimes called rentbacks or rent-back agreements.)
Most of the time, it’s for 60 days or less, because longer than that and the buyer’s lender will consider the property as “non owner occupied” and the interest rate will be higher.
Upon close of escrow, the buyers get a gets a set of keys, but can only enter the property for certain reasons.
Rent back agreements
If you are going to do a rent back in Santa Clara County, you may run into one of three forms that sets this agreement in writing. These can impact each party’s rights and responsibilities.
CAR Forms
With the California Association of Realtor forms (CAR forms), there are two distinct addenda depending on the length of stay for the rent-back after closing.
- For stays up to 29 days, the form used is SIP for Seller In Possession, which is barely 2 pages long with no other addenda attached. With this one, sellers are called sellers and buyers are called buyers – not tenants and landlords, an important distinction due to the many tenant rights that exist in California. The agreement is called a license and not a lease or rental.
- For sellers remaining 30 days or more, the form is RLAS, Residential Lease After Sale. This is quite long – 8 pages plus ancillary documents, about 15 pages in all. With the RLAS, we no longer refer to the principals as sellers and buyers, but tenants and landlords. That reflects the shift in rights and obligations present in this addendum.
PRDS Forms
A second set of forms is sometimes used for real estate transactions, the Peninsula Regional Data Service (PRDS forms). In the past, these were popular just in some areas from about Los Gatos through Saratoga and Cupertino and then up the Peninsula and San Mateo County. They are not as widely used now, at least not in Santa Clara County, as most agents have switched to CAR forms.
PRDS has just one rent back form, the Seller Occupancy After Sale Addendum. It is 1 page long, refers to buyers and buyers and sellers as sellers.
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by Mary Pope-Handy | Jan 4, 2023 | Contracts & Forms
When completing or reading home sale disclosures, you may see something about “work finaled”. What does that mean? It’s simply asking if the county, city, or town inspector came to the property to sign off or final completed work. This happens after the home owner has paid for permits, had the work completed, and then scheduled the government inspection. The contractor may also arrange for this final inspection.
Work finaled in disclosure forms
This phrase will be seen in the PRDS Supplemental Sellers Checklist. That query will come right after one asking if permits were obtained. The reason that they are together is that “work finaled” means was the permit work finaled by the town, city or county inspector.

In short: if a seller did not get permits, the seller did not get the work finaled.
Often I find that this gets mixed up. Sellers divulge that they did not get permits, and then say that the work was finaled.
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by Mary Pope-Handy, Clair Handy | Feb 8, 2022 | Buying Tips, Contracts & Forms, FAQs, Selling Tips
What is an As Is Sale?
Many Silicon Valley home sellers want to sell their homes “as is” (or “as-is”). And most homes in today’s market are. But what does that mean, exactly?
Does it mean that the seller has made no repairs or renovations before listing the home? Or that they do not have to disclose if something is broken to a potential buyer? No.
As is means that the home will be conveyed to the buyer at the end of the transaction in the same general condition it was in on the day that the buyers wrote the offer. If the roof has leaks, the crawl space is full of termites, and the appliances do not work, that is how it will be on the day escrow closes.
What it means is that the seller cannot let the property condition deteriorate during the course of the escrow.
The seller must continue to maintain the home and land in the same general condition. So if the lawn was green and well trimmed, the seller cannot suddenly let the grass die and neglect to mow it. If a baseball breaks a window after the buyer and seller have entered into contract, the seller must repair it. The condition will not have to be better, but it should not be worse than it was on the day the buyer and seller agreed on the price and terms of the sale.
While the contracts most agents use in Santa Clara County and nearby today have “as is” as the default sales agreement, that doesn’t mean all sales are as is.
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by Mary Pope-Handy, Clair Handy | Jan 10, 2022 | Buying Tips, Contracts & Forms, Selling Tips
Every region of the country has some unique real estate vocabulary and phrases. Here, in Silicon Valley, when we say “you’re out of contract“, it’s another way of saying “you are not doing what you promised to do in the purchase agreement that you signed” (meaning the real estate contract). In other words, there is a seller or buyer default happening.
“Out of contract” is not a legal term. I remember hearing a local real estate educator say “there’s no such thing”. It’s not an official status. But it is a way of describing behavior that’s not in alignment with the contract’s express promises.
Contractual “Save the Dates”
Both sellers and buyers make promises to do certain things and most of these promises are tied to time frames or dates. Here are a few of these time-sensitive promises or contractual obligations:
- sellers agree to leave the utilities on until close of escrow
- sellers promise to maintain the home until close of escrow as it was on the day the property went into contract (so mow the lawn, water it etc.)
- buyers assert that they will get their initial deposit to title within a set number of days (the California Association of Realtor’s form states 3 business days or provides a blank to fill in an alternate number – it’s often 1 business day here)
- buyers promise to remove contingencies within the times they stipulated in the offer
- sellers will move out in according to the date set out in the contract
- indecision over material facts or between buyers may make it hard to decide whether or not to remove any contingencies
- buyers agree to take possession (move in) per the time/day agreed to in the purchase agreement (not before)
- sellers bind themselves to having repairs done in a certain manner (depends on contract and clauses, if promised)
At one time or another, I have seen all of these items not adhered to by the parties who were supposed to make good on their word, and stranger violations that I don’t want to write about here lest I give someone a bad idea. I have seen sellers not move out on time (in some cases, elderly sellers who grossly misjudged the effort required to vacate.) The failure to do so causes stress and anxiety, and sometimes worse: fear and anger.
Out of Contract: Why the Delay?
Sometimes, when either party is consumed with worry, a kind of emotional paralysis can set in. Luckily that is rare, but I have seen it. Buying and selling a home is extremely stressful, and once in awhile it coincides with other things: the death of a family member, a diagnosis of cancer, a divorce, a relocation that one party doesn’t want. So many things can happen at the same time. You may have heard the saying that “a confused mind says no”. With real estate, the confused mind doesn’t write or accept an offer, or doesn’t move forward as planned.
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by Mary Pope-Handy | Sep 9, 2021 | Selling Tips, Contracts & Forms, Most Popular Articles, Safety
This post on the coronavirus impact on real estate sales here in Silicon Valley is updated periodically, depending on unfolding events, so please check back often.
The market for houses is hot (still)
The coronavirus pandemic caused a worldwide surge of buyers rushing to purchase homes with more square footage, more rooms (home office, room for elderly parents to move in), and more outside space.
Locally, single family home prices rose about 20% over one year, despite the initial lockdown and restrictions on showings. Pools had not been so desirable pre-Covid, but now they are more sought after as buyers want to vacation at home.
Initially, it was challenging to sell a condo or townhouse, particularly if there was no patio, balcony, yard, etc. Those homes did start appreciating, but have not performed nearly as well as detached housing has.
Now, in September 2021, many of the requirements have been lifted. Buyers are still interested, but the steep appreciation has priced some buyers out of the market.
Quick overview of what is and isn’t allowed with real estate listings and sales
The landscape for home sales is complicated and more restricted than pre-pandemic times, but easier than it was in March – May 2020. The market is strange in many ways, but it is possible to buy and sell now and actually is not so hard at this point.
What’s changed with Covid: (more…)
by Clair Handy, Mary Pope-Handy | Jun 10, 2021 | Contracts & Forms, Environmental Hazards, Foothill Areas, Home Improvement, Natural Hazards, Safety
Just about every year California amends what sellers are required to disclose, and one change that I think we’ll be seeing a lot of is about home fire hardening. Many agents, including myself, will begin to use the fire hardening disclosure / document (which has already changed once in six months). The current one, as of June 2021, is the C.A.R. Form FHDS, 5/21 Fire Hardening and Defensible Space Advisory, Disclosure, and Addendum.
So what is in this document, who will have to use it, and how can it help buyers and current home owners?
The CAR Fire Hardening and Defensible Space form is a two page document completed by the seller of a residential non-commercial property to notify the buyer of fire hazard zoning, code compliance, and possible vulnerabilities and/or defensible features. Both the buyer(s) and seller(s) sign to acknowledge receipt and consent to comply with the appropriate terms in paragraph 4B.
Who Will Use This Form? Paragraphs 1 and 2: Prerequisites
This disclosure is required for homes (1-4 unit residential properties) in high or very high fire hazard severity zones when the seller must complete a Transfer Disclosure Statement (TDS form). Sellers for California real estate transactions falling within those criteria are obligated to provide specific information contained in this form to the buyer. If these properties were improved or were built before January 1, 2010 there are additional stipulations. However, use is not restricted to properties in these zones.
Owners of residences where the zone is unknown, or those outside of the designated fire hazard zones which are “in, upon, or adjoining a mountainous area, forest-covered land, brush-covered land, grass-covered land, or land that is covered with flammable material,” (Gov’t Code 51182 and 1C in CAR FHDS 5/21 – basically, homes in or near ample kindling) should also make these disclosures if they might be considered materially important. Even when it’s not legally necessary, any homeowner might voluntarily disclose using sections of this form. To show that a home is not in a designated high or very high fire hazard severity zone, sellers simply check the box indicating so in paragraph 2B.
Is the address in a high or very high fire hazard severity zone?
Not all homeowners know if their property is in one of these zones, but it’s the seller’s responsibility to find out! In paragraph 1B the form suggests that a natural hazard zone disclosure company could determine this information (and if you’re selling you may have already ordered a report that would contain those details), but it certainly isn’t the only resource.
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by Mary Pope-Handy | Feb 23, 2021 | Contracts & Forms, Most Popular Articles

Agent Visual Inspection Disclosure, top of page 1
What is the agent visual inspection, and why is it required?
When real estate sales people represent buyers and sellers on residential real estate transactions in California, they must do a visual inspection of the property. In other words, they are required to walk through the property, inside and out, and look carefully at what they sell and advise the parties to the contract of any red flags noticed.
If an attentive Realtor walks through and notes something that would make a buyer unhappy to discover after close of escrow, that agent needs to note it on the required form.
Where do the agents write up their visual inspection disclosure comments?
Sometimes the real estate licensees will simply make a few comments on page 3 of the Transfer Disclosure Statement (TDS). More and more, though, they are completing the separate 3 page AVID (Agent Visual Inspection Disclosure) form instead. It is larger and allows for more thorough list of items noted. Both approaches are permitted by law to fulfill that obligation, though.
Why is this required?
Why do we need to do this? As with much of our standard of practice, this has its roots in a lawsuit, the watershed case of Easton vs Strassburger (1984). The California Department of Real Estate put out information on this case which clarifies an agent or broker’s disclosure obligation (click on the link above to read about the case):
The Easton case stands for the proposition that a real estate broker acting as an agent in the sale of a residential real property has a duty to the prospective buyer, not only to disclose facts about the property known to the broker that may materially affect the value or desirability of the property to the buyer, but also a “duty to conduct a reasonably competent and diligent inspection of property . . . in order to discover defects … ” to be disclosed to the buyer.
Sometimes home sellers really don’t like the comments that the real estate licensees write, especially when it comes from their own listing agent – and there may be pressure to gloss over things which must be disclosed. On more than a few occasions, I’ve had sellers push me to change my disclosure to eliminate something negative that they denied was an issue or to change the wording – as if it were a marketing piece. Listing and buyers agents are legally required to make disclosures of known issues, though. Most sellers do understand this and appreciate that they are avoiding future lawsuits by fully disclosing what they are aware of and not impeding their Realtors from doing the same. On one occasion I had to cancel the listing agreement due to this issue: I had a legal obligation to disclose something, but the sellers refused to sign my AVID unless I removed it.
What’s the difference between a home inspection by an inspector and a visual inspection by a Realtor or licensee?
Real estate agents are looking for a broad range of red flags, or anything that might impact value & desirability, which is discernible from a simple walk through of the property (inside and out). Inspectors are checking to see if the systems of the house are working as intended, or if there are problems structurally, and of course they do more than just walk through the townhouse, condo or house. (Please note: home inspectors have a scope of knowledge about these systems which far exceed an agent’s, so buyers and sellers should not rely on their agents as a substitution for any professional inspection.) Agents consider a wider range of issues, though. There will be some overlap, certainly, but they are not identical. The home buyer will benefit from the input from both. It is also always a good idea to have a second set of eyes looking at the property.
Here are some items that a buyer’s agent or seller’s agent might note which would not be discussed in a home inspection: (more…)
by Mary Pope-Handy | Feb 3, 2021 | Buying Tips, Contracts & Forms, Multiple Offers
With multiple offer situations in Silicon Valley real estate bids, sometimes buyers write an offer and later decide that it’s too much or too little, or that some other change is warranted (before it’s submitted). Can you change your purchase offer after it’s written, or is it a “done deal” once you’ve signed it?
The good news is that you can change your offer before it has been given to the listing agent / sellers. Many buyers do, either because they changed their mind or strategy, or because they just got new information. What is key is circling back to your buyer agent quickly, before the email is sent.
Why would you change your purchase offer?
Awhile back, some of my buyers were bidding on a San Jose home. As I asked the listing agent more questions and we got a little more information from that agent on the numbers of offers being received, my clients wanted to improve their offer. We redid page 1 of the contract, which is where all the financial basics are listed. Their improved offer went to the listing agent and it was seamless.
At other times, even after the offer is submitted, I have had buyers ask to improve their offer. The pages of the contract which were involved in the change were redone, signed and resubmitted. This is a bit like going through the counter offer process yourself. (more…)
by Mary Pope-Handy | Oct 24, 2020 | Buying Tips, Contracts & Forms, Most Popular Articles, Selling Tips
What is an exclusion in a real estate contract? What is an inclusion? Both of these refer to fixtures at the property which is for sale. If you want to sell your home in 2021, it’s very important to understand the “law of fixtures” as it relates to what you leave and what you take with you – unless the inclusion or exclusion is specified in the contract.
What is a fixture?
Generally speaking, a fixture is any item affixed or attached to the house, townhouse, condo or property which is installed with the intention that it be there permanently.
Examples of fixtures (items which stay or are included):
- built in in cabinets (in the bathroom, kitchen, or anywhere else)
- lights mounted from the ceiling
- built-in ovens or other appliances which are built-in
- in-ground (not potted) rose bushes.
- built in fire screens
- a fireplace insert
- window coverings
- wall air conditioning unit
- built in speakers
- built in wine fridge
- hot tub (unless it is a portable model, which most aren’t)
The exception to the rule is anything attached solely for earthquake safety. This would be the case if you have a large hutch which you have bolted to the wall so that it doesn’t topple in the case of a big quake. In Silicon Valley, fixtures are normally included with the sale of the home.
What is an exclusion?
Exclusions refer to fixtures which the seller does not want to include with the sale of the real property (real estate) but which otherwise would or should stay.

Exclusion examples:
- there may be a light fixture in the dining room which is a family heirloom and the seller does not want to leave it with the house
- an in-ground plant, bush, or small tree that the seller wants to take when moving out
- curtains which match a bedspread or other decor
- stereo speakers that are built in
- surveillance equipment, such as a Ring doorbell or camera (I saw this recently where the seller wanted to keep it)
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by Mary Pope-Handy | Jun 22, 2020 | Contracts & Forms
An As Is sale is one in which the seller is not required to make any repairs and underscores that the buyer is purchasing the property in its current condition. In Silicon Valley today, nearly all home purchases are “As Is” and without the current owner providing fixes or improvements to the property.
One small note to the As Is being the norm: in California, the seller is usually obligated by law to have a gas water heater properly braced and strapped, to provide the necessary smoke detectors and carbon monoxide detectors. (There are very few exceptions for these three items.)
It wasn’t always that way. My mom was a Realtor and back in the 1960s, when their contracts were short, the one thing that seemed to be included in every sale was that the seller would provide a Section 1 Pest Clearance. If the termite and pest control company found active infestations of wood destroying organisms, such as drywood or subterranean termites, fungus, boring beetles, etc., they had to be eradicated before the sale could close.
Having roof, chimney, or foundation repairs paid for by the home owner was not uncommon, either. After the Loma Prieta earthquake of 1989, for years chimney inspections discovered breaks that required rebuilding the chimney from the roof line up. The seller paid for it most of the time.
This As Is situation being the norm is just a function of supply and demand. If the tables were to turn, sellers would be doing work as needed to get the sale to close.
Purchase agreement forms and As Is sales
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