Prac pp chp 6

1. Chapter 6
The Purchase Offer
Filling Out the New Residential Purchase Contract

2. I. Overview of the Latest
Purchase Agreement
Contract

3. 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

4. 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

5. 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

6. II. Now More Detailed
RPA – CA Form

7. • 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

8. 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

9. B. Form: RPA-CA

10. C. Filling Out the Form –
Breaking it Down

11. 1. Offer

13. 3. Finance Terms

15. D. Loans

16. Balance of Down Payment
or Purchase Price and
Initials

17. Property Address and Date

18. Verification of Loan Terms

19. K. Buyer Stated Financing

20. 4. Sale of Buyer’s Property

21. 5. & 6. Addenda, Advisories,
Other Terms

22. 7. Allocations of Costs

23. Gov’t Reqs, Escrow & Title

24. Other Costs

25. 8. Items Included &
Excluded from Sale

26. 9. Closing and Possession

27. 9. Closing and Possession
(cont.)

28. Warranties, Keys

29. 10. Statutory Disclosures

30. A. Disclosures (cont.)

31. B. Natural & Environmental
Hazards

32. C. Withholding Taxes

33. D. Megan’s Law

34. E. Gas & Hazardous Liquid
Transmission Pipelines

35. F. Condo/Planned
Development Disclosures

36. 11. Condition of Property

37. Buyer’s Investigation of
Property

38. Buyer’s Investigation of
Property (cont.)

39. 13. Title and Vesting

40. 14. Time Periods, Removal
of Contingencies,
Cancellation Rights

42. Notices, Contingencies,
Close

43. G. Effect of Cancellation on
Deposits

44. 15. Final Verification of
Condition

45. 16. Repairs

46. 17. Prorations

47. 18. Brokers

48. 19. Representative Capacity

49. 20. Joint Escrow
Instructions to Escrow
Holder

50. 20. Joint Escrow
Instructions to Escrow
Holder (cont.)

51. 20. Joint Escrow
Instructions to Escrow
Holder (cont.)

52. 21. Remedies for Buyer’s
Breach of Contract

53. 22. Dispute Resolution

54. 22. Dispute Resolution (cont.)

55. 23. Service Providers & 24.
MLS

56. 25. Attorney Fees

57. 26. Assignment

58. 27. Equal Housing Opportunity

59. 28. Terms and
Conditions of Offer

60. 29. Time of Essence, Entire
Contract, Changes

61. 30. Definitions

62. 31. Expiration of Offer

63. 32. Acceptance of Offer