Real INFO | Mediation

When my Dad was a residential Realtor in the 1980s, the purchase contract was 1 page long.  That’s it.  My, how far we’ve come.  The latest version of the California Residential Purchase Agreement (RPA) is 8 pages.  It can be a little intimidating. One area that can be confusing is paragraph 26 that relates to “Dispute Resolution.”  Unfortunately, despite everyone’s best efforts—disputes can arise.  So, what happens when a Buyer and Seller can’t agree?  Or feel they’re owed money by the other party?  In the state of California—mediation comes first.  When you sign the RPA, paragraph 26A states that both “buyer and seller agree to mediate any dispute” before “resorting to arbitration or court action.”

So what does that mean?  The California Association of Realtors has a great Q/A section on their website that includes something called Mediation for Consumers.  It provides a easy-to-understand series of Q/As about mediation, including this definition:

Mediation is the term used to describe a relatively informal form of dispute resolution that occurs outside of the court system. In mediation, the parties to the dispute are assisted by a neutral third person called a mediator. The mediator is not empowered to impose a decision on the parties; instead the mediator facilitates discussions and negotiation between the parties with the goal of assisting them in reaching a mutually acceptable settlement of their dispute.

That means that whether you’re the Seller or the Buyer, you’re agreeing to try to work things out with a mediator first.  In a future post, I’ll touch on arbitration and what that’s all about.  As always, if you have questions or are curious about how any of this works, don’t hesitate to let me know.  I’m here to serve.