Transcript
Chapter 6The Purchase Offer
Filling Out the New Residential Purchase Contract
I. Overview of the Latest Purchase Agreement Contract
A. Why Purchase Contracts Are Necessary
Most transactions for the purchase and sale of real estate begin with a written contract between the buyer and seller
In a real estate transactions the following must be addressed: Financing Possession Condition of title Liens
Most buyers do NOT have the available cash to buy a home, financing is a must
B. Major Changes In the Purchase Agreement
The latest CAR® form, released November 2014, reflects “generational changes” essential to the offer and acceptance of a real estate sale
The new form forces increased clarity – more definite and certain terms
C. Contingency Clauses in The Purchase Agreement
A CONTINGENCY CLAUSE is a contract provision that requires a specific action to occur by a certain time in order for the contract to be considered enforceable
If the party named to fulfill the requirements of the contingency clause is unable to do so, both parties are released from their obligations
II. Now More Detailed RPA – CA Form
• Writing the purchase agreement is a vital step in
bringing the buyers and sellers together, and should be worded in simple and concise language
• The CalBRE has often stated that the purchase agreement is the most important document in a real estate transaction
• The broker’s responsibilities in completing or supervising the purchase agreement contract accurately and unambiguously cannot be overemphasized
A. Changing the Preprinted Form
• Written or typed words supersede the printed word if there is a contradiction
• Use the form itself as a checklist that is complete in all important legal respects
• Cross out printed sentences or paragraphs that are not applicable and have the changes dated and initialed by the impacted parties
B. Form: RPA-CA
C. Filling Out the Form – Breaking it Down
1. Offer
3. Finance Terms
D. Loans
Balance of Down Payment or Purchase Price and
Initials
Property Address and Date
Verification of Loan Terms
K. Buyer Stated Financing
4. Sale of Buyer’s Property
5. & 6. Addenda, Advisories, Other Terms
7. Allocations of Costs
Gov’t Reqs, Escrow & Title
Other Costs
8. Items Included & Excluded from Sale
9. Closing and Possession
9. Closing and Possession (cont.)
Warranties, Keys
10. Statutory Disclosures
A. Disclosures (cont.)
B. Natural & Environmental Hazards
C. Withholding Taxes
D. Megan’s Law
E. Gas & Hazardous Liquid Transmission Pipelines
F. Condo/Planned Development Disclosures
11. Condition of Property
Buyer’s Investigation of Property
Buyer’s Investigation of Property (cont.)
13. Title and Vesting
14. Time Periods, Removal of Contingencies,
Cancellation Rights
Notices, Contingencies, Close
G. Effect of Cancellation on Deposits
15. Final Verification of Condition
16. Repairs
17. Prorations
18. Brokers
19. Representative Capacity
20. Joint Escrow Instructions to Escrow
Holder
20. Joint Escrow Instructions to Escrow Holder (cont.)
20. Joint Escrow Instructions to Escrow Holder (cont.)
21. Remedies for Buyer’s Breach of Contract
22. Dispute Resolution
22. Dispute Resolution (cont.)
23. Service Providers & 24. MLS
25. Attorney Fees
26. Assignment
27. Equal Housing Opportunity
28. Terms and Conditions of Offer
29. Time of Essence, Entire Contract, Changes
30. Definitions
31. Expiration of Offer
32. Acceptance of Offer
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