The Blog

The Market Conditions Advisory

The Market Conditions Advisory is one of those California Association of Realtors® forms that actually may not be required by your brokerage. As you’ve probably already realized, there are so many forms on the CAR® website, and not all of the contract forms are actually required for each and every transaction. The Market Conditions Advisory is one such form that is not required. Nevertheless, it’s a good idea to use it.

Here’s why:

The Market Conditions Advisory discusses topics such as the loan, the appraisal, and home inspection and disclosure contingencies. It also covers information about the current condition of the marketplace and the fact that real estate professionals do not have a crystal ball and cannot be responsible for changes to market conditions that may impact the value of a property. (Note, however, that the Advisory never uses the words “crystal ball,” but you get the point.)

If you represent a buyer on a home that costs say (for example) $400,000. Then, three months after the buyer completes the purchase, property values decline by 5 percent. Your buyer needs to understand that this is a risk that is inherent to the purchase of property.

The same goes for a seller. If a seller agrees to sell his or her home for (as an example) $400,000, and the property increases in value by 5 percent a few months after the sale, the real estate professional bears no responsibility for that—for those changes in the marketplace.

Typically, and I do not mean to offend anyone, California is known as a litigious state. Real estate professionals, if they are not careful, can end up in arbitration, mediation, or court. The Market Conditions Advisory is one such form that can protect you from a not-so-pleasant path.

If you’d like to include one in your next real estate transaction file, and you would like our team to prepare your BRE compliant file for you, please do not hesitate to contact our office!