The PSA is the binding contract between buyer and seller of an LA multifamily property. It replaces the LOI and governs all terms through close.
A PSA covers: purchase price, payment terms, earnest money, due diligence period, representations and warranties, title conditions, closing date, default remedies, assignments, and many other provisions.
LA multifamily PSAs typically run 25–60 pages. Sophisticated counsel drafts and negotiates the PSA — it's where key risks get allocated between buyer and seller.
LA multifamily PSA negotiations typically take 7–14 days from LOI acceptance to signed PSA. Key areas of negotiation: representations about rent roll accuracy, LAHD compliance, capital condition disclosures, and post-close indemnification. Clean seller disclosures simplify PSA negotiation materially.
From the Sterman LA Multifamily Glossary — defined the way a broker with $1.41 billion across 254 closed transactions actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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