why contract ask me to give up my judicial rights???

I am a first time buyer. I was going to sign contract to buy new home, but when I read the sample contract I notice one paper work ask me to initialing on it to give up my judicial rights and agree to have any dispute arising out of matters decided by neutral arbitration. And on this paper work it also written this agreement is voluntary.

Is the above "giving up judicial rights" common for buying a new home?

Since it is voluntary, why people still sign it to give up their rights? Will buyer get any trouble from the seller if they didn't sign this paper work? :-\

In many fields, to keep costs down, arbitration is used to settle all disputes.  With TIC if you don't sign they will just move on to the next buyer.

max said:

I am a first time buyer. I was going to sign contract to buy new home, but when I read the sample contract I notice one paper work ask me to initialing on it to give up my judicial rights and agree to have any dispute arising out of matters decided by neutral arbitration. And on this paper work it also written this agreement is voluntary.

Is the above "giving up judicial rights" common for buying a new home?

Since it is voluntary, why people still sign it to give up their rights? Will buyer get any trouble from the seller if they didn't sign this paper work? :-\

Click to expand...

This is also common on the Residential Purchase Agreement (RPA) when it comes to resales.  There is a section within the RPA that states that both parties will attempt to resolve any disputes via mediation and/or arbitration.  Also, most real estate brokers will require their clients to sign a document stating that the client will opt for mediation and/or arbitration instead of going to court. 

Thanks, now it's clear to me: I have to give up my rights after paying them a lot money...

doctors do the same thing. they make you sign paperwork saying you will arbitrate - i asked what would happen if i didnt sign it and they said i would not be treated there. im not sure how well these hold up in court.  in particular the ones doctors make you sign. if all doctors make you sign one of these and you have no choice but to sign it to get medical treatment im pretty sure it would not hold up in court.

max said:

I am a first time buyer. I was going to sign contract to buy new home, but when I read the sample contract I notice one paper work ask me to initialing on it to give up my judicial rights and agree to have any dispute arising out of matters decided by neutral arbitration. And on this paper work it also written this agreement is voluntary.

Is the above "giving up judicial rights" common for buying a new home?



Since it is voluntary, why people still sign it to give up their rights? Will buyer get any trouble from the seller if they didn't sign this paper work? :-\

Click to expand...

The chief advantage of the binding arbitration clause (after trying mediation, of course) is that you will have typically a lower-cost solution with a person making the decision having had at least 5 years' experience specifically in RE law. Personally, I would rather take my chances with someone experienced than with a jury, which I see as a total crapshoot. But the choice is truly optional, and no harm if you do not sign.

*note that you can seek an appeal if you specifically request it during the "arbitration of disputes" portion of the proposal.

Good luck,
IrvineRealtor