If you are home buying or selling in Silicon Valley, the odds are good that your area is one where the contracts and forms could be either the PRDS set or the CAR set. Does it matter which one is used?
Weary home buyers who’ve written multiple offers on one set of forms would really prefer to not switch and suddenly need to learn a new set of terms, risks, and benefits that come with each. The majority of Realtors representing sellers, who are listing agents, will accept offers on either one. Not all will, though, so it’s important for the buyer’s agent to read the MLS instructions and to communicate with the listing agent ahead of time to make sure.
There are many differences between the PRDS and CAR real estate contracts. The biggest one is that the PRDS contract by default requires that the property be delivered to the buyer in a certain conditon (unless the As Is box is checked) while the CAR contract is by default an As Is agreement. But there are many other issues too.
These contracts also reference other forms from their same set of documents which will be important to the sale. For instance, the CAR contract requires that the seller fill out a particular disclosure form along with the Transfer Disclosure Statement:
10 A (4) Within the time specified in paragraph 14A, (i) Seller, unless exempt from the obligation to provide a TDS, shall, complete
and provide Buyer with a Seller Property Questionnaire (C.A.R. Form SPQ)
The PRDS contract, by contrast, requires the PRDS Supplemental Seller’s Checklist. They are not interchangeable unless all parties agree in writing to the substitution.
If a seller’s disclosures are all on PRDS forms, it’s easy to infer that the seller or listing agent prefers offers on the PRDS contract OR that adjustments may need to be made to keep the seller from having to fill out yet another form after completing the presale disclosure package. Otherwise, giving a CAR offer on a listing where PRDS disclosure forms have been used puts an obligation on the seller to complete another new disclosure. At best, this may generate a counter offer from the seller. If your offer is neck and neck with another, this could potentially harm your negotiating position in a multiple offer situation.
Related reading – older articles (the forms have changed a little since these were written):
Did You Know that You Have a Choice in Which Forms Are Used to Buy & Sell Homes in Silicon Valley? (2009, this blog)
What is the difference between the CAR and PRDS purchase agreements? Does it matter which contract is used? (2011, this blog)
Market activity in Santa Clara County:
