Credit crisis delaying home purchases

Loan approval, contingencies, defects take center stage

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Changes in the housing market can change the nature of home-sale transactions. For instance, before the boom in the home-sale market that began in the second half of the 1990s, the California Association of Realtors (CAR) purchase agreement used by most California Realtors included a clause in which the seller warranted the condition of the property.

The boom market changed that. The version of the CAR purchase contract most widely used during the fast-paced market that subsided in 2006 did not include a seller warranty. Instead, the buyer agreed to purchase the property in its present condition subject to the buyer’s inspection rights. Market conditions changed the home-sale transaction in a very significant way.