The coronavirus addendum issued by the California Association of Realtors is not mandatory, but you’re able to include it anytime you’re writing an offer. If you’re a seller, and the buyer did not include it, you’re able to counter their offer by including it.
If you’re already in a transaction, however, neither party is required to sign it; if you send it over and the other party refuses to sign, there’s really no recourse for you—hopefully, the parties are reasonable and willing to work out the best route.
Every once in a while, life brings you those “Oh sh*t” moments—that’s the reason for this document. Some hypothetical, yet entirely plausible, ways COVID-19 could disrupt a transaction include lender and title company offices shutting down, a loss of employment, and travel bans prohibiting parties from signing documents. This preemptive addendum allows a buyer and seller to come to an agreement before any of that stuff happens.
Essentially, it’s a way for parties to say, “Hey, I don’t know if any of these scenarios will transpire, but if they do, these are our options.”
Here’s what the addendum allows:
- Buyer and seller can agree to postpone the close of escrow up to 30 days to accommodate unforeseen circumstances.
- If a loan contingency has already been removed, but due to unforeseen circumstances, the buyer may be now unable to fund the loan, escrow can be canceled and the deposit returned to the buyer.
- Mutual agreement to cancel simply due to the general circumstances of the COVID-19 outbreak.
If you have more specific questions on this or any other real estate topic, please feel free to reach out to me by phone or email. I’m happy to help you out and address your concerns.