Your Guide to the California Residential Purchase Agreement

Transcription

Your Guide to the California Residential
Purchase Agreement
USER PROTECTION AGREEMENT
COVERED PUBLICATIONS USER PROTECTION AGREEMENT
The California Association of REALTORS® (C.A.R.) stands behind its covered publications* by assisting the
user of such publications in defense of any claim, on appeal, that any pre-printed provision of the latest version of
the C.A.R. covered publication is unlawful. This Agreement applies only to the latest version of the publications
used in property transactions in California by REALTORS® who have obtained or purchased the publications
consistent with C.A.R.’s copyrights and from a C.A.R. authorized distributor. This Agreement means solely that
C.A.R. will argue that the content of the covered publications are lawful, or that they accurately reflect the
statutory, regulatory or governmentally-approved version of the publication, through an amicus curiae brief on
appeal, or will provide funding for that portion of the appeal attributable to the lawfulness of the publication, or
both, in the discretion of the C.A.R. Legal Action Fund Trustees. Of course, this does not apply to the manner in
which a person provides a publication or uses it in a transaction but rather to the lawfulness of the pre-printed
content of the publication itself.
*Covered publications include only those written by C.A.R. and those required or permitted to be given in
transactions by statute, where the language of the booklet is mandated by statute, regulation or government
agency. Covered publications do not include those publications written by outside authors that may be distributed
by C.A.R.
Copyright © 1997-2002, Revised 2004 CALIFORNIA ASSOCIATION OF REALTORS® AND SURETRAC™, THE
SYSTEM FOR SUCCESS™ ARE SURETRAC, REGISTERED TRADEMARKS OF REAL ESTATE BUSINESS
SERVICES, INC. Published by Real Estate Business Services, Inc., a subsidiary of the California Association of
REALTORS® 525 S. Virgil Avenue, Los Angeles, CA 90020 All rights reserved. No part of this book may be reproduced
by any means, electronic or mechanical, without advance written permission from the publisher.
This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is
published with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional
services. If legal advice or other expert assistance is required, the services of a competent professional person should be
sought.
Table of Contents
Page Number
Introduction................................................................................................................................................... 1
I.
Examining The Contract- Point for Point (RPA-CA page 1) .................................................... 2
Title.................................................................................................................................................. 2
Date.................................................................................................................................................. 2
1.
Offer.................................................................................................................................... 2
2.
Financing ............................................................................................................................ 3
3.
Closing and Occupancy ...................................................................................................... 9
II.
Examining the Contract - Point for Point (RPA-CA page 2)................................................... 10
3.
Closing and Occupancy (cont.)......................................................................................... 10
4.
Allocation of Costs .......................................................................................................... 11
5.
Statutory Disclosures (including Lead-based Paint Hazard Disclosures) ……………… 14
And Cancellation Rights
Examining the Contract-Point for Point (RPA-CA page 3)..................................................... 15
5.
Statutory Disclosures (including Lead-based Paint Hazard Disclosures)
and Cancellation Rights (cont.)........................................................................................ 15
6.
Condominium/Planned Unit Development Disclosures ................................................... 18
7.
Condition Affecting Property ........................................................................................... 18
8.
Items Included In and Excluded From Sale ...................................................................... 19
9.
Buyer’s Investigation of Property and Matters Affecting Property .................................. 19
III.
IV.
10.
Repairs .............................................................................................................................. 20
11.
Buyer Indemnity and Seller Protection for Entry Upon Property .................................... 20
12.
Title and Vesting............................................................................................................... 20
13.
Sale of Buyer’s Property................................................................................................... 21
14.
Time Periods; Removal of Contingencies; Cancellation Rights....................................... 21
V.
14.
Time Periods; Removal of Contingencies; Cancellation Rights, cont.............................. 23
15.
Final Verification of Condition......................................................................................... 23
16.
Liquidated Damages ......................................................................................................... 23
17.
Dispute Resolution............................................................................................................ 24
VI.
18.
Proration of Property Taxes and Other Items ................................................................... 26
19.
Withholding Taxes............................................................................................................ 27
20.
Multiple Listing Service ................................................................................................... 27
21.
Equal Housing Opportunity .............................................................................................. 27
22.
Attorney Fees.................................................................................................................... 28
23.
Selection of Service Providers .......................................................................................... 28
24.
Time of Essence; Entire Contract; Changes ..................................................................... 28
25.
26.
Other Terms and Conditions; Including Attached Supplements....................................... 29
Definitions ........................................................................................................................ 29
VII.
27.
Agency .............................................................................................................................. 30
28.
Joint Escrow Instructions to Escrow Holder..................................................................... 31
29.
Broker Compensation from Buyer............... …………………………………………….32
30.
Terms and Conditions of Offer ............... ……………………………………………….32
VIII.
31.
Expiration of Offer….............................. ………………………………………………..32
Buyer’s Signature Section.............................................................................................................. 33
32.
Broker Compensation from Seller .................................................................................... 33
33.
Acceptance of Offer.......................................................................................................... 33
Seller’s Signature Section ............................................................................................................. 34
Confirmation or Acceptance .......................................................................................................... 34
Broker’s Signature Section ............................................................................................................ 34
Escrow Holder Acknowledgment .................................................................................................. 34
IX.
Addendum to the RPA-CA (BIA)
Buyer’s Inspection Advisory ....................................................................................................... 35
X.
Addendum to the RPA-CA (RR)
Request for Repairs ..................................................................................................................... 36
XI.
Addendum to the RPA-CA (RFR)
Receipt for Reports ..................................................................................................................... 36
XII.
Addendum to the RPA-CA (CR)
Contingency Removal.................................................................................................................. 37
XIII.
Addendum to the RPA-CA (NBP)
Notice to Buyer to Perform .......................................................................................................... 37
XIV.
Addendum to the RPA-CA (NSP)
Notice to Seller to Perform........................................................................................................... 38
XV.
Addendum to the RPA-CA (SSD)
Supplemental Statutory and Contractual Disclosures ............................................................. 38
XVI.
Addendum to the RPA-CA (WPA)
Wood Destroying Pest – Inspection and Allocation of Cost Addendum................................. 39
XVII. Addendum to the RPA-CA (COP)
Contingency for Sale or Purchase of Other Property .............................................................. 40
XVIII. Addendum to the RPA-CA (CC)
Cancellation of Contract, Release of Deposit and Joint Escrow Instructions ....................... 40
XIX.
Addendum to the RPA-CA (AD)
Disclosure Regarding Real Estate Agency Relationships ........................................................ 40
XX.
Addendum to the RPA-CA (DA)
Disclosure and Consent For Representation of More Than One Buyer or Seller ................. 40
XXI.
Addendum to the RPA-CA (CO)
Counter Offer .............................................................................................................................. 40
XXII. Addendum to the RPA-CA (ETA)
Extension of Time Addendum ................................................................................................... 40
XXIII. Addendum to the RPA-CA (RDN)
Receipt and Delivery of Notices to Perform ............................................................................. 40
XXIV. Addendum to the RPA-CA (ARC)
Authorization to Receive and Convey Information ................................................................. 40
XXV. Addendum to the RPA-CA (PAA)
Purchase Agreement Addendum................................................................................................ 41
1.
Cancellation of Prior Sale; Back-Up Offer ....................................................................... 41
2.
Seller to Remain In Possession After Close of Escrow .................................................... 42
3.
Tenant to Remain in Possession ....................................................................................... 43
4.
Junior or Assumed Financing ........................................................................................... 43
5.
Short Pay........................................................................................................................... 44
6.
Court Confirmation........................................................................................................... 44
XXVI. Addendum to the RPA-CA (SFA page 1)
Seller Financing Addendum and Disclosure ............................................................................. 45
XXVII. Addendum to the RPA-CA (SFA page 2 and 3)
Seller Financing Addendum and Disclosure ............................................................................. 46
XXV. Addendum to the RPA-CA (CBC)
Cooperating Broker Compensation Agreement and Escrow Instructions .............................. 47
XXIX. Exclusive Authorization and Right to Sell (LA)......................................................................... 48
XXX. Seller’s Advisory (SA) .................................................................................................................. 59
Conclusion .................................................................................................................................................. 60
Appendix..................................................................................................................................................... 61
C.A.R. Standard Forms:
Residential Purchase Agreement (RPA-CA)
Buyer’s Inspection Advisory (BIA)
Requests for Repairs (RR)
Receipt for Reports (RFR)
Contingency Removal (CR) – (RRCR in package)
Notice to Buyer to Perform (NBP)
Notice to Seller to Perform (NSP)
Supplemental Statutory and Contractual Disclosures (SSD)
Wood Destroying Pest – Inspection and Allocation of Cost Addendum (WPA)
Contingency for Sale or Purchase of Other Property (COP)
Purchase Agreement Addendum (PAA)
Seller Financing Addendum and Disclosure (SFA)
Cooperating Broker Compensation Agreement and Escrow Instructions (CBC)
Cancellation of Contract, Release of Deposit of Joint Escrow Instructions (CC)
Disclosure Regarding Real Estate Agency Relationships (AD)
Disclosure and Consent For Representation Of More Than One Buyer or Seller (DA)
Counter Offer (Co)
Extension of Time Addendum (ETA)
Receipt and Delivery of Notices to Perform (RDN)
Authorization to Receive and Convey Information (ARC)
Introduction
This booklet will discuss the entire revised October 2002 C.A.R. California Residential Purchase
Agreement and Joint Escrow Instructions (RPA-CA) and related addenda. The new purchase
agreement and related addenda contain the essential terms for the formation of a real estate
contract. A copy of the RPA-CA can be found at the end of this booklet and should be used in
conjunction with your reading.
The RPA-CA is a multi-functional document. It serves as:
•
An offer to purchase real property;
•
A completed contract when it is signed by the buyer and seller and communication of the
acceptance is received;
•
A receipt for the good faith earnest money deposit;
•
Joint escrow instructions;
•
A mediation and arbitration agreement;
•
A confirmation of the agency relationships; and
•
An irrevocable assignment of compensation to brokers.
The Purchase Agreement is adequately detailed to address most issues involved in the purchase
and sale of real property. Extensive modification or drafting of additional paragraphs may be
considered to be the unauthorized practice of law and should be avoided.
1
I. Examining the Contract - Point for Point
(RPA-CA, Page 1)
Title
The word “California” reflects the fact that the form is available for use throughout the state. The
words "and Joint Escrow Instructions" reflect that the form includes an instruction to the escrow
holder by both the buyer and the seller (see paragraph 28) and includes space for the escrow
holder to sign for receipt of the document (see page 8 of the contract).
Date
•
Date: The date inserted is the date of preparation.
This is usually, but not always, the date the buyer signs the offer and the earnest money is
received.
The important point is that the "contract date" is the date of final acceptance, provided
that the acceptance has been personally communicated. All dates and time periods in the
agreement are counted from the date of final acceptance, unless otherwise specified.
•
Location: The city inserted is the place where the document is drafted.
This is usually, but not always, the city where the buyer signs the document or the city
where the property is located. This may help to determine the "venue" in the event of a
dispute.
Numbered Paragraphs
1.
Offer
A.
Offer/ Buyers
This sentence identifies the document as being an offer. As such, it is capable of
being accepted as defined later in the document, and creating a binding contract.
It also informs the seller of the identity of the buyers. This aspect is important for
offers that have seller financing.
Here is where the buyers' names are listed not "assignee" or "nominee."
All buyers should be listed, even if not all buyers have signed.
2
Do not identify the buyers with anything that looks like a manner of taking title
(e.g., husband and wife, an unmarried man etc.). There is no place in the
agreement to designate vesting so that you will not be tempted to give tax or legal
advice. This may also avoid any claim of discrimination based upon familial
status under the Federal Fair Housing laws.
•
2.
Description: Clearly identify the property by address or legal description.
B.
Real Property to be Acquired
This is the description of the property for purchase. There is also a space for the
assessor’s parcel number.
C.
Purchase Price: This is the price the buyer offers to pay the seller.
It does not include closing costs, insurance premiums or funding fees that the
buyer may also be required to pay.
D.
Close of Escrow
Choose either a specific date for the close of escrow (COE) or a certain number of
days after the offer is accepted for the close of escrow. Some buyers or sellers
may have to close by a certain date for tax reasons (such as a tax deferred
exchange or sale of a principal residence capital gains exclusion), employment
transfers, or other personal reasons. If either party requires a "date specific" COE,
be sure to address that in the contract.
Financing
Obtaining of the loans specified is a contingency of the agreement, unless this is an all
cash offer or unless the buyer specifies that getting a loan is not a contingency. The
buyer is required to make a good faith effort to obtain the specified financing. If a
contingency fails, the buyer is NOT (1) obligated to perform NOR (2) held liable for
breach of contract damages.
Obtaining deposit, down payment and closing costs are not contingencies. If the buyer
does not have or cannot get the money for these items, seller may be entitled to legal
remedies such as keeping the buyer’s deposit or canceling the sale.
The Buyer represents that the funds will be good when deposited with escrow. Again,
this is a promise by the buyer, not a contingency. If there is not enough money in an
account to cover a check given to escrow, the buyer could be in breach of the contract.
The Seller may be entitled cancel the sale.
3
A.
Initial Deposit
The deposit is given to the agent submitting the offer. Usually this is the buyer's
agent but may be a dual agent or seller's exclusive agent on an in-house sale. If
given to anyone else, that should be specified in the blank line. Indicate to whom
the check is made payable. This will usually be the broker or a title or escrow
company.
Funds received in trust from a principal must not be commingled with a broker's
own funds. Any violation may subject the broker to disciplinary action by the
Real Estate Commissioner, including suspension or revocation of the real estate
license. In addition, deposits must be logged whether they are placed into the
broker’s trust account or in a neutral escrow account.
Deposits must be disposed of properly by the third business day after receipt
unless the parties contractually agree to another disposition. The C.A.R. contract
authorizes holding the check uncashed until the third business day following
acceptance of the offer, or some other choice that is specified in the blank line
such as, “until this back-up offer is in primary position” or “the inspection
contingency has been removed.”
Although a post dated check is not illegal, it may affect the seller's decision and
must be disclosed. Make sure to indicate where the deposit money will be placed
(into escrow or broker’s trust account or elsewhere). The deposit is to be made by
a personal check unless a different form of deposit is specifically written into the
blank line.
The amount should be written out in numbers in the column to the right.
If the deposit is not made on time, seller may be entitled to cancel the sale.
B.
Increased Deposit
For the increased deposit to be included in the amount of liquidated damages
there must be a separate receipt for the increased deposit at the time that it is paid,
in which the buyer initials or signs the liquidated damages provision. (C.A.R.
form RID complies with this requirement.)
4
Fill in the number of days indicating when the increased deposit will be made or
specify a particular condition such as “upon removal of the inspection
contingency.”
As with the initial deposit, if the deposit is not made on time, seller may be
entitled to cancel the sale.
C.
First Loan in the Amount Of
This paragraph encompasses new first loans and can be either conventional or
FHA/VA loans.
The first sub-paragraph only refers to conventional loans. Seller financing
requires a seller-financing addendum and should be referenced in the “Additional
Financing Terms” (2D) paragraph. Secondary financing and assumptions require
an addendum (such as C.A.R. Form PAA) and the appropriate box checked in
paragraph 2D. List only the loan amount and not financing charges or origination
fees that might be included.
The terms should be set forth specifically and not left to future interpretation. Do
not use “best available rate and terms.” Allow for market fluctuations by using
the upper limits of what the buyer will pay. If the market is lower, the lender will
use the current market rate and the buyer will not complain!
If both the fixed rate and the adjustable rate information are filled in, then the
buyer is obligated to complete the transaction with whichever option is obtainable
from the lender. If the buyer does not want an adjustable rate loan then be sure
NOT to complete those blanks. Some loans are due in a short period of time, such
as five or seven years, but payments are amortized over a longer period, such as
20 or 30. This can be specified in the agreement.
There is no place to select a “subject to” option. There is a significant liability for
both the seller and the buyer on loans taken “subject to.” If a loan with a due on
sale clause is taken over “subject to” without the consent of the lender, the loan
may be accelerated (called immediately due and payable). The buyer may lose
the property to foreclosure if unable to secure new financing. The seller may be
held personally liable for the amount of the loan or the amount of the deficiency,
if permitted by law.
5
A deficiency is the difference between the actual loan amount and the amount the
lender actually receives from the property at sale. Deficiency judgments are not
permitted by law (except for VA) under the following circumstances:
•
If the loan was originally a purchase money loan on a one-to-four unit,
single family owner-occupied dwelling;
•
If the foreclosure is by trustee sale; or
•
If the loan was a seller carry-back.
The above exemptions do not apply to VA loans. The VA can hold the veteran
borrowers liable for the loan unless there has been a substitution of eligibility and
release of liability.
Points to be inserted into the blank in paragraph 2C(1) are those to be paid by the
buyer. If the seller is paying the points, indicate that in paragraph 2D - Additional
Financing Terms.
The second sub-paragraph is to be used only for FHA/VA transactions. Although
buyers are allowed to pay points on FHA/VA transactions, there are certain fees
that buyers are not allowed to pay. This paragraph obligates the seller to pay
those costs. If the seller has only agreed to pay for costs up to certain limit, then
the box should be checked and the pre-agreed limit should be written into the
blank line. The buyer is responsible for all other financing costs.
Sometimes repairs, including those for wood destroying pests, are contingencies
of the FHA/VA loan approval. This portion of the paragraph obligates the seller
to pay for lender-required repairs. If the seller has only agreed to pay for repairs
up to a certain limit, then the box should be checked and the pre-agreed limit
should be written into the blank line.
If the Mortgage Insurance Premium (MIP) on an FHA loan, or the origination fee
on a VA loan, is included in the loan amount, it can be specified in the
“Additional Financing Terms” in paragraph 2D. However, the amount should not
be included in the total since these costs are not part of the purchase price to the
seller.
D.
Additional Financing Terms
This paragraph is only for terms that relate to financing. Paragraph 25 is for terms
and conditions other than financing.
6
These additional financing terms will add to the total purchase price if the amount
is for the seller financing, secondary financing or an assumption. However, if it is
MIP or an origination fee, DO NOT put it in the column or the total will not add
up to the purchase price.
If there will be seller financing, secondary financing or an assumption, make sure
to not only check the box provided in this paragraph but also to complete the
actual form referenced and attach that completed form to the California
Residential Purchase Agreement.
E.
Balance of Purchase Price
The balance of the purchase price will be deposited with the escrow holder within
a sufficient time of close. Remember that checks that are not drawn on a
California bank have a time delay to "clear".
F.
Total Purchase Price
Be sure the columns add up! The amount should be written out in numbers in the
column to the right.
The amount of the purchase price is the market value as negotiated between the
buyer and seller. It is not determined by the lender's appraisal.
G.
Loan Applications
Loans require timely application by the buyer.
If the buyer does not provide a letter from a lender showing the buyer is either
pre-qualified or pre-approved, the seller may cancel the agreement. Different
lenders use different terminology in these letters. These letters are not guarantees
that the buyer will be given the loan that was applied for. Instead, these letters
provide the seller with some assurance that the buyer has started the process of
getting a loan and that a third party has made at least a preliminary assessment of
the buyer’s ability to actually qualify for the loan. Whether the buyer provides a
pre-qualification or a pre-approval letter, it must be based upon a written
application and credit report.
7
H.
Verification of Down Payment and Closing Costs
If a buyer does not have, or is unable to obtain by close of escrow, the required
down payment and closing costs then the transaction is not likely to be completed.
As a result, the seller’s property will have been held off the market for a period of
time and the process for the seller of finding a buyer, opening an escrow, and
seeing a new transaction to completion will have to begin again. The buyer will
have spent time and incurred costs unnecessarily and, in addition, could be forced
to forfeit the buyer’s deposit to the seller. While the buyer may be in breach of
contract, and legal remedies are available to the seller, some sellers will prefer to
avoid being put in that situation in the first place. One way to accomplish that
goal is for the buyer (or buyer’s lender or loan broker) to verify the down
payment and closing costs early in the transaction. This paragraph provides for
the verification to be made within a set period of time that usually coincides with
the time for providing a pre-qualification or pre-approval letter.
I.
Loan Contingency Removal
There are two choices for the length of time the financing contingency is effective:
1. The default choice is for the loan contingency to be removed within a specified
time. Under this choice, the buyer must remove the contingency of obtaining the
loan(s) or elect to cancel the agreement. Once the contingency is removed, the
buyer has created a covenant to complete the transaction even if the lender does not
fund the loan. Even if the buyer may not have the ability to complete the purchase
without the loan, the buyer will be in breach of contract and the seller will have
legal remedies including monetary damages. These damages may be limited if the
liquidated damages clause is initialed by all parties.
2. The optional choice is for the contingency to remain in effect until the loan is
actually funded. Under this method, if the lender will not make the loan, then the
buyer will not be in breach of contract, the buyer is excused from completing the
sale, and the buyer is entitled to return of any deposit.
J.
Appraisal Contingency and Removal
Even if a lender is willing to lend the amount specified in paragraph 2C, the buyer
is not obligated to purchase if the property appraises at less than the purchase
price in paragraph 2F. By default the appraisal contingency must be removed
when the loan contingency is removed. Consequently, the buyer should
determine whether the lender has appraised the property before removing the loan
8
contingency. Buyers who are confident of the property’s value can check a box
and opt-out of this contingency. For buyers who are not obtaining a loan (see 2L)
or who have made an offer without a loan contingency (see 2K) they may want to
get an independent appraisal, and would want to set a time certain for the removal
of the appraisal contingency by completing the blank line.
K.
No Loan Contingency
This is an optional paragraph. If checked, it has the same effect on the transaction
as if an existing loan contingency is removed. The buyer has created a covenant to
complete the transaction even if the lender does not fund the loan. Even if the
buyer may not have the ability to complete the purchase without the loan, the
buyer will be in breach of contract and the seller will have legal remedies
including monetary damages. These damages may be limited if the liquidated
damages clause is initialed by all parties.
L.
All Cash Offer
This paragraph must be checked to apply.
For a cash sale, the buyer must give written verification of funds necessary to
close, within seven (7) days, or days specified. If the buyer does not provide the
verification in time, or the seller disapproves the verification, then the seller may
cancel. If a buyer does not have the cash to purchase the property and requires a
loan to acquire the property, but does not want to make a contingent offer, then
the loan amount line should be filled in in paragraph 2C and the No Loan
Contingency paragraph (2K) should be checked.
3.
Closing and Occupancy
A.
Buyer Occupancy
Whether the buyer intends to occupy the property is important for matters such as
liquidated damages, loan qualification, rate, and terms, and should be noted by
checking the appropriate box.
B.
Seller-occupied or vacant property
Occupancy is to be delivered to the buyer at a specified time on the close of
escrow, or some other specified date before or after the close of escrow. If the
seller remains in the property (e.g. COE + three (3) days) or the buyer moves in
9
early, then a landlord/tenant relationship is possibly established. In either case,
the parties should enter into a written agreement to document this different legal
relationship. When title and occupancy do not occur at the same time, be sure to
complete the applicable “Residential Lease Agreement After Sale” or “Interim
Occupancy Agreement” (C.A.R. Forms RLAS or IOA) or Purchase Agreement
Addendum (C.A.R. Form PAA, paragraph 2, “Seller to Remain in Possession
after Close of Escrow”) concurrently with the RPA-CA. The PAA should only be
used for occupancies less than 30 days. These forms clarify the responsibilities
and obligations of the parties.
Occupancy is also important for insurance purposes. Generally speaking, in the
event that the property is damaged or destroyed through no fault of the buyer
before the title is transferred, the risk of loss falls on the seller. However, if the
buyer intends to occupy early, the risk shifts to the buyer.
Likewise, if the seller continues to occupy the property after COE, the buyer is
generally not protected by the seller’s hazard insurance, nor may the seller be
protected.
Parties should consult their insurance advisors whenever title and occupancy do
not transfer on the same date.
Examining the Contract - Point for Point
(RPA-CA , Page 2)
C.
Tenant-occupied property
(i) Property shall be vacant. If the property is tenant-occupied, it is the seller’s
responsibility to deliver the property vacant unless otherwise agreed. The
Property needs to be vacant before the scheduled close of escrow so that the
buyer may make a final inspection. The seller has the obligation to comply
with lease requirements, rent control and other laws affecting the
landlord/tenant relationship. If these obligations make vacancy impractical or
impossible, then one of the other options should be checked.
(ii) Tenant to remain in possession: C.A.R. Form PAA should be used
and paragraph 3 checked, to indicate that the tenants are to
continue to occupy the property.
(iii) Contingency: If the buyer and seller have not agreed whether the
tenant should remain or should leave, this option allows the parties
10
time to come to an agreement. In no agreement is reached, then
either buyer or seller may cancel.
D.
Warranties
Third-party warranties are automatically assigned by the contract on close of
escrow. Seller should give buyer any documentation concerning these warranties.
The broker does not determine assignability of warranties
E.
Keys
Keys and means of opening all locks are to be delivered to the buyer at the time of
possession. The buyer will pay for HOA key deposits.
4.
Allocation Of Costs
This paragraph allows the buyer and seller to determine who is going to pay for particular
costs in the transaction. While custom and practice dictates which party pays for certain
costs in many areas of the state, all of these items are in fact negotiable and there is no
single statewide practice. This paragraph also explicitly reminds the buyer and seller that
it only concerns the cost of the report, inspection, function or service and not any
recommendations made by the report or inspection or service. Recommended repairs or
services, unless written into this paragraph, are negotiable items.
A(1.) & (2.)
Wood Destroying Pest Inspection
Here the parties identify who is responsible to pay for an inspection for wood
destroying pests and organisms and preparation of the report, including which
company is to conduct the inspection and prepare the report. Be sure to specify if
the report will cover detached garages and carports, decks or other identified
structures. The inspection is for wood destroying pests and organisms and not all
pests (such as rodents or ants, for example).
Roof coverings are not covered. A buyer wishing to inspect the roof must do so
under the investigation of property, paragraph 9.
If the property is a single unit, condo or planned development, only the unit itself
is inspected, not common areas.
11
The report is only applicable to accessible areas of the property. If the report
shows inaccessible areas, and the buyer wants those areas inspected as well, the
buyer may request a further inspection within the time specified. Since
inaccessible areas are not specifically covered by this paragraph, as with any other
item the buyer wants inspected pursuant to paragraph 9, the buyer is responsible
for the cost. Of course, a buyer who is not satisfied with the report may exercise a
right to cancel pursuant to paragraph 14. A seller may consider this fact in making
a decision to pay or not pay for the inspection of inaccessible areas.
The Wood Pest Addendum (WPA) has language similar to that in 4A (1). The
differences include: (1) the Wood Pest Report needs to be separated into section 1
and section 2 recommended repairs. Section 1 means active infestation or infection
by wood destroying pests or organisms. Section 2 refers to conditions likely to lead
to infestation or infection. These terms are defined in the Buyer’s Inspection
Advisory and (2) the addendum gives the parties an opportunity to decide in
advance of the inspection (rather than negotiating after this information is
received) which of them is going to pay for the cost of the recommended repairs.
A buyer who wants to address the issue of inaccessible area inspections up front,
or pre-determine who is to pay for recommended repairs may check the box in 4A
(2) and use the Wood Pest Addendum.
B(1.) – (5.)
Other Inspections and Reports
If the buyer pays to have the septic system or well inspected, it is treated as any
other investigation made by the buyer within the time period for the buyer’s
investigation. The buyer has the right to request that the seller make repairs within
the designated number of days after receipt of the inspection report.
The paragraph determines if either party will pay for reports that disclose if the
property is in certain zones such as earthquake fault, seismic, flood and fire zones,
and who will provide those reports. Private companies are available which, for a
fee, provide zone disclosure reports on property transactions.
Two paragraphs have been added to write in common inspections for particular
areas or types of properties.
C(1.) & (2.)
Government Requirements and Retrofit
Smoke detector installation and water heater bracing requirements apply whether
or not a property is for sale. However, the parties are free to negotiate who will
12
pay for compliance of these requirements. Regardless of who pays, unless exempt,
a statement of compliance is required to be signed by the seller and delivered to the
buyer.
Here the parties specify who will pay for mandatory retrofit. Many communities
require retrofit to be made as a condition of closing. Examples include the
installation of low flow toilets and showers heads, weather stripping, and tempered
glass in showers or sliding doors. Check with your city or county for local
mandatory retrofit.
D(1.) & (2.)
Escrow and Title Costs
Here the parties designate who is to pay for the title policy and escrow fees as well
as who will provide those services. The title policy referenced here is for an
owner’s policy. The buyer is to pay for any required lender’s title policy unless
otherwise agreed.
The owner’s title policy is clarified in paragraph 12.
Escrow fee refers only to the “bare” escrow fee and does not involve items such as
notary fee, document fee, recording, etc. For VA transactions, the seller must pay
the entire escrow fee.
E(1.) –(7.)
Other Costs
In this section the parties designate who is to pay for county and/or city transfer
fees. If a particular cost is going to be split, check both boxes and write that down
in the blank line following the tax or fee.
The county transfer tax is $.55 per $500. Half of that fee goes to the county and the
other half goes to the city, unless the city has a separate transfer fee, in which case
the county keeps the entire amount.
The city transfer tax or fee is set by the city. It is a fee charged upon sale (transfer)
of property in addition to the county transfer fee.
Homeowner Association’s fees and the cost, coverage and provider of a home
warranty plan are covered.
Here the parties identify who is issuing a home warranty plan, if any, who is going
to pay for it, and the limits on coverage and cost.
13
Additional lines have been provided for other cost items that are common to the
area or property.
5.
Statutory Disclosures (Including Lead-Based Paint Hazard Disclosures) And
Cancellation Rights
A.(1) California law creates a requirement for all sellers of one-to-four residential units
(including lease options), unless exempt, to deliver to a buyer two mandated forms: a
Transfer Disclosure Statement (TDS) and a Natural Hazards Disclosure (NHD)
Statement, created by the legislature. If the property is in a Mello-Roos District, or
subject to an assessment pursuant to the Improvement Bond Act of 1915, the seller must
make a good faith effort to obtain a disclosure notice from the taxing authority and to
deliver such notice to the buyer. Nothing in the law imposes a duty to discover a special
tax or district not actually known to the agents. A Mello-Roos District is created under
the Mello-Roos Community Facilities Act, which authorizes the district to issue bonds
and levy special taxes to finance designated public facilities and services.
Additionally, if the seller has actual knowledge that there has been a release of illegal
substances on the property or if the property is in or affected by an industrial use zone (a
zone or district allowing manufacturing, commercial or airport use) or is located within
one mile of a former military ordnance location which may contain potentially explosive
munitions, this fact must be disclosed to the buyer. Seller exemptions from the TDS and
NHD forms, and these other obligations include:
•
•
•
•
Properties covered by a public report. (Re-sales cannot use this exemption.)
Court ordered sales (i.e., probate, bankruptcy, etc.).
Foreclosure, deed in lieu, REO properties.
Transfers between co-owners or spouses.
Federal law requires sellers of all residential properties constructed prior to 1978 to
provide a buyer with a Lead-Based Paint notice as an attachment to the contract, a
disclosure of known lead paint, lead hazard reports, and a lead pamphlet (either the
separate federal lead booklet or the state Environmental Hazards Booklet.)
The TDS and NHD are not warranties, nor are they a part of the contract. Do not attach
them as supplements to the contract or the counter-offer.
Disclosures in the TDS do not eliminate the seller's obligations to disclose all known
material facts.
14
NOTE: Some areas have "local option" disclosures, which are required by local
ordinance. There is a statutory format for these disclosures in Civil Code Section 1102
which is to be used. Delivery of the “local option” disclosure form triggers a three (3) or
five (5) day rescission period (see A.4 below).
A.(2) The buyer is contractually obligated to return the statutory disclosure forms within a
specified period. This way the seller knows that the disclosures have been received and
can determine if the statutory right to rescind has expired.
A.(3) This part of the clause provides that if a seller becomes aware of adverse material
conditions of which the buyer is otherwise unaware, the seller will give the buyer a
subsequent or amended written disclosure unless the condition is disclosed in a report
obtained by the buyer.
(RPA-CA, Page 3)
A.(4) If not previously delivered to the buyer, the TDS, NHD and Lead-Based Paint
Disclosures and pamphlet (lead disclosures) and other disclosures must be given after
acceptance within the number of days specified in paragraph 14. Delivery of the TDS,
NHD or lead or other disclosures after the buyer has signed the Purchase Agreement
triggers a cancellation period of three (3) days from personal receipt or five (5) days if
delivery is by mail. If the buyer receives the TDS, NHD or lead disclosures before
signing the Purchase Agreement, there is no cancellation period.
A.(5) Buyer and seller cannot give up their rights to receive these statutorily required
disclosures.
B.
A seller must, within the time specified in paragraph 14, provide to the buyer the natural
hazard disclosures specified in paragraph 5A. But the booklets specified in 5B only need
be provided if required by law. Keep in mind that the NHD form is required to be used to
make the six (6) natural hazard zone disclosures (Earthquake Fault Zone, Seismic Hazard
Zones, State Fire Responsibility Areas, Very High Fire Severity Zones, Flood Zone A
and Inundation Zones) on any residential one-to-four unit property. The disclosures are
also required (even if a form is not required) on ALL real property, i.e. residential,
commercial, industrial, farmland, etc.
15
(See C.A.R. Legal Q&A’s “California Real Estate Law Disclosure Chart” and
“Natural Hazard Disclosure Statement” for further information.)
Natural Hazard Zones
•
Geologic, Earthquake and Seismic Hazard Zones Disclosure
The law requires a seller’s agent, or a seller without an agent, to disclose to
the buyer if the property is in an Earthquake Fault Zone (formerly called
“Special Studies”) or Seismic Hazard Zone when the seller’s agent or seller
have actual knowledge that the property is in an identified area or when
maps or a notice of where to get the maps are posted at the County Assessor,
Recorder or Planning Office. Construction or development may be
restricted in these zones.
•
Special Flood Hazard Areas
Special Flood Hazard Areas (Zone A) are designated by the Federal
Emergency Management Agency (FEMA). A seller’s agent, or seller
without an agent, must disclose if the property is in a Flood Zone A. Flood
insurance coverage is generally required on these properties. The seller must
also notify the buyer that the buyer must obtain and maintain flood
insurance if the seller has received Federal Disaster Assistance on the
property.
•
Inundation Zone
Inundation zones are those areas subject to flooding in the event of a dam
failure. A seller’s agent, or seller without an agent, must disclose to a buyer
if the property is located in an inundation zone.
•
State (Fire) Responsibility Areas (SRA)
The law requires a seller to disclose to the buyer if the property is located in
an SRA when the seller has actual knowledge that the property is in an SRA
or when maps are available through the County Assessor. The seller must
also inform the buyer that the state has no responsibility to provide fire
protection services to any building or structure located within the SRA
unless an agreement has been reached with a local fire fighting agency, and
16
that the buyer may have to maintain firebreaks and other maintenance
requirements may have to be met.
•
Very High Fire Severity Zone
The areas in this zone are subject to high fire risks. A seller must disclose to
a buyer if the property is located in this fire zone and that the property may
have maintenance requirements on it, such as maintaining firebreaks, or
clearing brush, etc.
•
Earthquake Safety
Effective January 1, 1993, the Government Code requires a disclosure in
the form of a booklet regarding the earthquake safety or seismic
deficiencies of structures of certain types of construction, depending upon
the year built.
"The Homeowner's Guide to Earthquake Safety" (booklet) is used for
conventional light frame construction structures built prior to 1960. The
seller must also disclose any known seismic deficiencies (see page 3 of the
booklet or page 27 of the combined Earthquake and Environmental
Hazards Booklet.)
It is the responsibility of the licensee to give the booklet to the seller. The
seller is responsible for completing the questionnaire page and then giving
the entire booklet to the buyer.
"The Commercial Property Guide to Earthquake Safety" is used for
masonry or pre-cast concrete structures with wood frame floors and roofs
built prior to 1975. Although the title says "commercial," this booklet is
also used for residential structures that meet the construction material
description.
Exemptions to the delivery of the booklet are the same as for the TDS with
an additional exemption if the buyer agrees in writing to demolish the
property within one year.
The broker or seller who delivers the booklet to the buyer, even on exempt
properties, is not required to provide additional information regarding earthquake
hazards in general.
17
Note: The seller and broker must disclose known structural deficiencies and
earthquake hazards on all properties.
Environmental Hazard Booklet
The Environmental Hazard Booklet discusses common environmental hazards:
asbestos; formaldehyde; hazardous waste; household hazardous waste; lead; mold;
and radon. The broker and seller who delivers the booklet is not required to
provide additional information regarding any of those items unless the broker or
seller has specific knowledge about the presence of those items on the property
being sold.
C. Data Base Disclosure
This paragraph, required by statute, informs a buyer that information is available from
law enforcement officials regarding the location of registered sexual offenders.
6.
Condominium/Planned Unit Development Disclosures
A. Sometimes a buyer may not be aware that the property is part of a development
where property is shared in common with other owners or where the property is
subject to certain rules along with other owners. This paragraph provides that the
seller will make this information known to the buyer.
B. The seller must promptly request and provide the contractually required documents
specified, including statements about age restrictions, preliminary list of defects, if
any, or written notice of settlements involving common area defects and including
the names and contact information for the Homeowners Association governing the
property. This agreement requires the delivery of 12 months of Homeowners’
Association (HOA) minutes. Legally required documents are specified on a
separate form (HOA, Homeowner’s Association Information Request).
7.
Condition Affecting Property
The property is sold without warranties. This is consistent with common law in which no
warranties are automatically included in a sale. However, the property is to be
transferred in substantially the same condition as on the date of acceptance of the offer.
Thus, the seller cannot neglect the property during escrow.
The seller remains obligated to disclose known adverse material facts. An important
18
event is whether any insurance claims affecting the property have been filed within the
past five years since homeowner insurance companies have the ability to check an
industry database. Depending on the nature and types of such claims, the property may
be uninsurable or insurance may be hard to get or expensive. The buyer also retains the
right to inspect the property and, based upon those inspections, request that the seller
makes repairs. If the seller is unwilling or unable, the buyer may cancel the contract.
The broker remains obligated to complete a reasonably competent and diligent visual
inspection.
8.
Items Included and Excluded
A. Note to Buyer and Seller
Information about the property from other sources, such as MLS or advertising, is not
determinative but rather the contract is the final word on what is or is not included.
B. Items Included In Sale
The buyer is entitled to receive all existing fixtures and fittings that are attached, free of
liens and without seller warranty.
The clause lists some of the items to be included, whether or not they are fixtures.
Any personal property included in the purchase price is to be free of liens and without
seller warranty.
Describe the personal property as specifically as possible including model numbers, etc.
C. Items Excluded From Sale
Exclusions must be specifically indicated.
9.
Buyer’s Investigation of Property and Matters Affecting Property
This paragraph gives the buyer the right to “investigate” the property and then to either
remove the contingency or cancel the agreement. Inspections include the right to check
for lead-based paint.
Inspections by government entities are not to be done without the seller’s prior approval.
This way, a property will not be “red-tagged” without the seller’s knowledge.
19
The seller is entitled to a copy of all reports, at no cost. The seller shall have utilities on
for buyer’s inspection.
(RPA-CA, Page 4)
10.
Repairs
Any repairs, including those under the pest control paragraph or any repairs agreed upon
by the seller, are to be done with permits and in compliance with building codes and
completed before buyer's final verification of condition. Work performed at the seller’s
expense may be performed by the seller. Exact restoration of appearance is not required.
The seller is required to get receipts and provide them to the buyer.
11.
Buyer Indemnity and Seller Protection For Entry Upon Property
The buyer shall not damage the seller's property while performing inspections or repairs
and shall take steps to assure that the seller will not be harmed, such as by hiring insured
workers and indemnifying the seller. The seller is also cautioned that recording certain
notices may help protect the seller's interest.
12.
Title and Vesting
A. The buyer has a specified amount of time to review the preliminary report (PR) and
give the seller a written notice to take corrective action. The PR may not contain all
items affecting title and is only an “inducement to purchase a title insurance policy.” In
the event an item of record is not disclosed in the PR, and the title policy is issued, the
title company is liable only for the face amount of the policy.
B. Unless otherwise specified by the buyer in writing, all matters on record will remain
on the title, such as easements, CC&Rs, etc. These matters may be found in the PR or
discovered prior to COE. However, existing liens on the property (such as those securing
financing arranged by the seller) must be removed from the title unless agreed to as part
of the contract.
C. Seller has an obligation to disclose all known title matters, even those not appearing
on a public report or otherwise of record.
20
D. The transfer by grant deed or stock certificate, or as otherwise provided, will include
oil, mineral, and water rights if currently owned by the seller. Vesting shall be designated
in the buyer’s escrow instructions. The agent should never advise on how to take title.
E. This paragraph provides that a buyer is to receive a CLTA/ALTA Homeowner's
Policy of Title Insurance. The Homeowner's policy offers advantages over a CTLA
policy or ALTA-R in terms of certain post-policy forgeries, boundary disputes, transfers
to trusts and permit and map act problems.
13.
Sale of Buyer's Property
Sale of the buyer’s property is not a contingency unless paragraph 13B is checked. If this
matter is to be a contingency, a separate addendum (COP) needs to be attached.
14.
Time Periods; Waiver of Contingencies; Cancellation Rights
Time periods for each contingency in the applicable paragraph are specified for both
the buyer and the seller. Time periods run from date of acceptance. These time
periods are critical for the satisfaction or removal of contingencies.
These time periods can only be changed by written agreement from the involved
parties.
A. This clause establishes how many days the seller has to give specified information to
the buyer. If no number is written into the blank, then the seller has seven (7) days to
provide the buyer with the items specified. Examples would be zone disclosures, lead
paint disclosures, water and sewage tests, and wood destroying pest inspections for
which seller is responsible. (Certain items, such the title report, wood destroying pest
inspections and substituted natural hazard disclosure reports need to be requested
from others and should be requested early on in order to provide them to the buyer
within the required time.)
B. This clause gives the buyer 17 days after acceptance to complete inspections,
investigations, and review reports and other information for which the buyer is
responsible, and either approve the property and remove contingencies or cancel the
agreement. The 17-day time period can be changed by checking the appropriate box
and writing in a different number in the blank line.
Within this time:
(1) The buyer must complete all investigations and review of reports,
such as getting a home inspection, reviewing the lead-based paint
and hazard disclosures, and investigating the insurability of the
21
buyer and the property. Additionally, the buyer must return copies
of signed statutory disclosures to the seller.
(2) The buyer may request that the seller make repairs or take other
action regarding the property. The seller is not obligated to make
repairs.
(3) The buyer must, in writing, either remove their contingencies or
cancel the agreement. If within the time in paragraph 14A, the seller
is unable to deliver any government-mandated disclosure, required
as a condition of closing, the buyer has five days after receipt of the
disclosure to, in writing, remove the contingency or cancel the
agreement.
C. Continuation of Contingency or Contractual Obligation; Seller Right to Cancel
C(1)
This clause provides that the seller may cancel the agreement and return the
buyer’s deposit if the buyer does not remove their contingencies or cancel the
agreement within the time agreed to in paragraph 14B. However, before the seller
can cancel the seller must first have given the buyer a Notice to Buyer to Perform
(see C (4)).
C(2) This clause clarifies that even after the expiration of the time in paragraph 14B(1),
and until the seller exercises cancellation rights under paragraph 14C(1), the buyer
retains the right to make requests of the seller, remove contingencies or cancel the
agreement.
C(3) This clause gives the seller the right to cancel the agreement and return buyer’s
deposit if buyer does not meet certain obligations provided for in the contract such
as, making a deposit, providing a pre-qualification or pre-approved letter or
signing a receipt for uninsured deposit. Before a seller can cancel for a buyer’s
failure to meet these obligations; the seller must first give the Buyer a Notice to
Buyer to Perform (see C (4)).
A Notice to Buyer to Perform is not required to be given if the buyer fails to close
escrow on time.
C(4) The Notice to Buyer to Perform must give the buyer at least 24 hours or until the
previously agreed time in paragraph 14B(1) (whichever occurs last) to either
remove their contingencies or cancel the agreement. The 24-hour notice period
can be changed by checking the appropriate box and writing in a different number
in the blank line.
22
(RPA-CA, Page 5)
D, E. Effect of Removal/Effect of Cancellation on Deposits
In the event of cancellation under the rights of this paragraph, the buyer's deposit,
less costs and fees, shall be returned. A notice of cancellation shall be provided to
the escrow holder along with mutually signed instructions to release the deposit.
(C.A.R. form RC satisfies these requirements. C.A.R. form (CC) may be used to
both cancel and release deposit.) Funds will not be released without mutual
instructions, judicial decision or arbitration award. Refusal to sign the deposit
release instruction, unless there is a good faith dispute, may result in a civil penalty
of $1,000.
15.
Final Verification of Condition
This clause is the authorization for a final "walk-through" five days (or number specified)
prior to COE. No new obligations are created or imposed upon the seller based upon this
paragraph. This clause allows the buyer to verify that the condition of the property is as
agreed upon and that the seller has complied with repair and other obligations.
The buyer does not have a cancellation right under this clause, but it may trigger rights
and remedies under other paragraphs.
16.
Liquidated Damages
NOTE: For this clause to be included as an obligation under this contract, it must be
initialed by the buyer and the seller. If at least one, but not all parties initial, a counteroffer is required until agreement is reached.
The remedy to the seller in the event the buyer is in breach of contract is as follows:
•
For one-to-four unit dwellings that the buyer intends to occupy, the seller shall
retain the deposit actually paid, provided that it doesn't exceed 3% of the purchase
price. If the deposit exceeds 3%, the buyer is entitled to the balance. (For
properties other than one-to-four residential/owner-occupied, the liquidated
damages clause is still enforceable for a reasonable amount of the deposit, without
identifying "reasonable" as 3%.)
23
•
If the deposit has been increased since the initial deposit, it will be included in the
deposit the seller can keep only if the buyer and seller have signed a Receipt for
Increased Deposit (C.A.R. Form RID-11) at the time the increase was received.
This clause limits the dollar amount the seller is entitled to, it does not authorize the
automatic release of funds to the seller. The release of funds will require further written
agreement of the parties or a judicial decision or arbitration award.
17.
Dispute Resolution
A.
Mediation
This is not an "optional” clause that requires a check box or initialing.
The buyer and the seller agree to mediation by a neutral mediator to facilitate the
resolution of any disputes. The mediator is not empowered to impose a settlement.
Any mediator may be used, including mediators from an Association of
REALTORS®, a rabbi, priest, minister, or other neutral party.
Any party who does not attempt mediation before filing an arbitration or court
action (with the limited exceptions such as small claims court actions found in
paragraph 17B(2)) is not entitled to be awarded attorney’s fees even if they are the
prevailing party.
B.
Arbitration of Disputes
For this clause to be included as an obligation under this contract, it must be
initialed by the buyer and the seller. If at least one, but not all parties initial, a
counter-offer is required until agreement is reached.
Arbitration is always an option for the parties and may be agreed upon at some
future time, if not initialed in this contract. However, it is usually more difficult to
get an agreement to arbitrate once the dispute has occurred. By initialing in this
contract, the parties are agreeing in advance to arbitrate.
The first paragraph contains the terms of the arbitration agreement. The last
paragraph is the statutory NOTICE which must be in 10 point bold typeset and
must be initialed by all the parties to be enforceable.
24
B(1).
Arbitration of Disputes
•
The first sentence is a reminder that non-binding mediation is a first step
under this contract. It alerts the parties that a binding decision (not subject
to an appeal) will be made by a neutral arbitrator (not a judge or jury).
NOTE: The only review a court will make is for failure of due process, fraud or
corruption of the arbitrator.
•
The second sentence states the arbitrator will be a retired judge, justice, or
an attorney with at least five (5) years of residential real estate law
experience. The parties can select someone else only if they mutually
agree. The arbitration shall follow California law.
Although neither a judge nor a jury hears the case, the award rendered by the
arbitrator may be filed with the Superior Court resulting in an enforceable court
order.
This paragraph also grants the right to discovery. This means the parties may
request documents, interview witnesses, and otherwise "discover" the evidence the
other party will use (fact finding).
B(2). Exclusions from Mediation and Arbitration
Certain matters are excluded from the obligation to mediate and arbitrate:
•
Judicial or non-judicial foreclosure
•
Unlawful detainer actions
•
Filing of mechanic's liens
•
Probate court, small claims court or bankruptcy court
.
The filing of the following specific judicial actions does not constitute a violation
of the mediation or arbitration provisions:
•
A lis pendens (a notice that there is a pending action against the property in
order to put third parties on notice).
25
•
An order of attachment (so that assets cannot be liquidated to avoid the
judgment rendered).
•
Appointing a receiver to run a business or manage a property.
•
Filing an injunction to start or stop an activity or action.
B(3). Brokers
The buyer and seller agree to mediate and arbitrate claims involving the broker(s)
if the broker(s) agree prior to or within a reasonable time after the claim is
presented. By agreeing, the broker is not deemed to be a party to the transaction.
The final portion of paragraph B is the NOTICE to the parties required by statute.
In addition to referencing the ‘Arbitration of Disputes Provision' in the first two
paragraphs, it puts the parties on notice that the agreement to arbitrate is voluntary,
but once agreed upon, they will be compelled to arbitrate instead of litigate.
The broker should not advise the parties whether to initial the clause or not.
(RPA-CA, Page 6)
18.
Prorations and Property Taxes and Other Items
All prorations shall be paid current by seller and assumed by the buyer as of COE, unless
specified in the space for exceptions.
The buyer will receive NO CREDIT toward the purchase price for Mello-Roos or other
governmental special assessments, or HOA “special” assessment assumed by the buyer.
The end of this paragraph refers to a supplemental tax bill the buyer will receive from the
tax collector to pay the amount of increased taxes owed after the COE and before the next
tax period. Usually the taxes collected through the escrow are based upon the tax bill of
the prior owner. This makes the tax collected less than the amount based upon this new
sales price.
26
Prorations will be made based on a 30-day month, whether the actual month of the
transaction has 28, 29, 30 or 31 days.
19.
Withholding Taxes
There are two tax withholding laws that affect the transfer of all real property in
California: Federal law and California law.
Withholding is required unless an exemption applies. The exemption must be
documented and the documentation retained by the buyer and the broker for five years in
the event of an audit by the IRS or the Franchise Tax Board.
An exemption from withholding is not an exemption from documentation. Either collect
the money or have proof of why you didn't collect. The "proof" may be either the Seller's
Affidavit (C.A.R. Form AS) or the Buyer's Affidavit (C.A.R. Form AB), whichever one
applies.
Under Federal law, the buyer is responsible for withholding 10% of the seller's gross
selling price (not of the "proceeds") if the seller is a "foreign person" as defined by the
Foreign Investment in Real Property Tax Act (FIRPTA). The broker can be held
responsible for the failure to withhold taxes -- up to the amount of the commission. The
buyer is responsible for the actual amount of the tax, which should be withheld.
Under California law, 3 1/3% of the gross selling price must be withheld if the seller is an
individual unless among other exceptions: the property being sold is the seller’s principal
residence for tax purposes; the sales price does not exceed $100,000; or the property is
part of a 1031 tax deferred exchange. If notified by the escrow holder of the requirement
to withhold, the buyer is responsible. If the escrow holder does not inform the buyer, the
escrow
holder is liable for the actual amount of the tax due.
20.
Multiple Listing Service (“MLS”)
The parties authorize dissemination of price, terms, and financing to authorized entities.
21.
Equal Housing Opportunity
Under both Federal and California law, it is illegal to discriminate on the basis of any of
the seven protected categories: race, color, religion, sex, handicap, familial status, or
national origin.
27
22.
Attorney Fees
This paragraph is only between the buyer and the seller and does NOT include the
broker(s). It relates to contractual disputes between the buyer and seller.
The prevailing party is entitled to attorney's fees from the non-prevailing party except as
noted in the Mediation clause.
NOTE: If the parties choose to "settle" a dispute, the attorney’s fees are usually one of
the terms of the negotiated settlement.
23.
Selection of Service Providers
Buyers and sellers can select any provider they want. Brokers do not guarantee
performance of any service providers.
24.
Time of Essence; Entire Contract; Changes
Performance of any act shall take place on the date and/or time stated, unless the period is
mutually extended in writing.
This agreement incorporates all prior oral or written agreements.
All changes must be in writing to be enforceable (Statute of Frauds, Civil Code Section
1624). Under this Statute, certain agreements must be in writing to be enforceable.
These include:
•
A lease agreement for more than one year.
•
An agreement by a purchaser of real property to pay an indebtedness secured by a
mortgage or deed of trust.
•
An employment agreement to find a purchaser. (The listing agreement does not
authorize the broker to sign for the seller, only a written power of attorney gives
that authority.)
•
An employment agreement to find a property. (A Buyer/Broker agreement does
not authorize the broker to sign for the buyer, only a written power of attorney
gives that authority.)
28
25.
•
The broker compensation clause in this Purchase Agreement evidences that the
broker has brought an acceptable offer to the seller. For a pre-printed commission
agreement to be enforceable, it not only has to be in writing, but it must contain a
bold NOTICE that commission rates are not fixed by law and may be negotiable.
•
An authorization to purchase or sell property on the principal's behalf (power of
attorney). Without this written power of attorney, the listing broker's signature
on the acceptance as "Sam Seller by Bob Broker per phone" is not binding on the
seller.
•
An agreement for the sale of real property or an interest therein. This is the
Purchase Agreement. Not only must the terms of this document be in writing, but
all counter-offers, supplements, addenda, or modifications must be in writing.
Anything not in writing is not enforceable.
Other Terms and Conditions; Including Attached Supplements
Additional provisions to be included in this Purchase Agreement must be in writing and
can be stated here and on additional sheets of paper, if necessary.
The Buyer’s Inspection Advisory (C.A.R. Form BIA) which is prepackaged with the
Purchase Agreement is pre-checked in this paragraph as a supplement to the contract.
The form itself should be gone over thoroughly with the buyer and seller and signatures
obtained.
If one of the terms in the Purchase Agreement Addendum (C.A.R. Form PAA) is to be
included, the box should be checked, the paragraph number should be filled in and the
C.A.R. Form PAA itself should be completed and attached.
26.
Definitions
•
"Acceptance" means final acceptance -- after all counter-offers and the
communication of the final acceptance.
•
"Days" are calendar days. (Deposit of trust fund following “acceptance” is
measured in business days.)
•
"Days After." When counting for time periods and notices, the acceptance or
notice date is not counted as day one. The last day ends at 11:59PM of that day.
29
•
"Close of Escrow" is the day of recording. The escrow holder may still have an
"open escrow" in order to cut checks, complete closing statement, or hold funds
for repairs. If scheduled close of escrow falls on a Saturday, Sunday or legal
holiday, the close of escrow date is extended until the next business day.
•
"Copy" can be by any means including photocopy, facsimile or electronic.
•
“Repairs” means any repairs including pest control and retrofitting.
•
"Signed" includes handwritten and electronic signatures.
•
Singular and Plural are interchangeable when appropriate.
•
“C.A.R. Form” means the specific form referenced or other agreed upon
comparable form.
“Electronic Copy” or “Electronic Signature” means an electronic copy or
signature complying with California law.
•
(RPA-CA, Page 7)
27.
Agency:
A.
Disclosure.
Buyer and seller acknowledge prior receipt of a Disclosure Regarding Real Estate
Agency Relationships (C.A.R. Form AD). This form is required to be presented (i)
to the seller prior to taking a listing, (ii) to the buyer prior to signing a contract to
purchase, and (iii) to the seller prior to presenting the offer (if the selling agent is
not also the listing agent).
B.
Potentially Competing Buyers and Sellers.
This language advises the principals of and gets their consent (C.A.R. Form DA)
to the fact that either broker may represent other principals who might compete
with buyer and seller for the property being purchased. For example, an office
representing the buyer may also represent other buyers who are making offers on
the same property. Similarly, the office representing the seller may be
representing another seller of competing property and may be negotiation with the
30
buyer for the acquisition of that property as well. The agency relationship
described below is transaction specific for this buyer and seller only.
C.
Disclosure Confirmation.
Confirmation needs to be signed concurrent with the execution of the Purchase
Agreement. This is the only confirmation that is required under Civil Code
Section 2079.17 and no additional confirmation is needed if complete and
accurate. If the parties do not agree to what is set forth in this confirmation in this
Purchase Agreement or if this confirmation is blank or partially blank, then a
counter-offer will need to be written and a confirmation on a statutory form must
be attached to the counter-offer.
REMINDER: The selling broker (the one who wrote this offer) must sign and
present a disclosure to the seller prior to presenting this offer even if the listing
broker already gave the seller a written disclosure.
28.
Joint Escrow Instructions To Escrow Holder
A.
Selected portions of the purchase agreement are instructions from the buyer and
seller to the escrow holder. The buyer and seller may receive additional
instructions directly from the escrow holder and they agree to sign reasonably
necessary forms to complete the transaction. If deposited with escrow, escrow is
instructed to disperse broker compensation pursuant to separate compensation
agreements provided for in paragraphs 29 or 32A and the Real Estate Broker
section of the agreement.
B.
The parties have three (3) business days to deliver the agreement to the escrow
holder, unless a different period is agreed-upon by the parties. The time to do this
will generally correlate to the time the deposit is placed with escrow. Failure to
submit the agreement to escrow will not invalidate the agreement between the
buyer and seller.
C.
Brokers are a party to the agreement solely for the purpose of compensation. The
Buyer and seller agree to irrevocably assign any broker compensation provided for
in paragraphs 29 and 32A. Escrow agrees to notify the brokers if the buyer fails to
make a required deposit or if buyer and seller submit cancellation instructions to
escrow.
D.
The Buyer and seller agree to provide escrow with a copy of any amendment
affecting any paragraph that is also an escrow instruction.
31
29.
Broker Compensation from Buyer
Provides that if the buyer has a separate compensation agreement with the buyer’s broker,
compensation will be paid at COE.
30.
Terms and Conditions of Offer
This document is the buyer's entire offer for the purchase of this property. There is an
expiration date specified for the offer after which time the offer is revoked. However, the
buyer may revoke the offer at any time prior to communication of the seller's acceptance.
If the seller does not accept the offer exactly as written, there must be a counter-offer.
Remember that the seller may not make changes on this document above the buyer's
signature. The only exception is that the seller may initial either of the optional clauses
(liquidated damages or arbitration) already initialed by the buyer. If the buyer has not
initialed a clause which the seller wants, or if the seller does not want a clause that the
buyer initialed, there must be a counter-offer to clearly evidence the intent of the parties.
Any photocopies or facsimiles will be considered the same as the original document.
There is no need to have all signatures on one original; counterparts are acceptable.
(RPA-CA, Page 8)
31.
Expiration of Offer
This clause specifies who is authorized to receive the seller's acceptance on behalf of the
buyer and how long the offer will remain open. It also specifies that the buyer or the
person designated must personally receive the acceptance. The authority to receive the
acceptance is not an authorization to accept or sign for any changes unless that authority
is in the form of a power of attorney. It is a better practice for the buyer's designated
recipient to be an individual person rather than an office/broker. If the designee is
identified as the broker, then if anyone (such as a receptionist or secretary) in the
brokerage office receives the signed and accepted offer, a contract is created. If the
designee is a named person (such as the specific salesperson working with the buyer)
then no contract is created until that person is in personal receipt.
32
Buyer’s Signature Section
Everything above the buyer's signature constitutes the entire and complete offer made by the
buyer. By signing the agreement, the buyer acknowledges the confirmation of the agency
relationship.
The date on which the last buyer signs is used to determine how long the offer will remain open
(3 calendar days). Remember that it is the acceptance date that is the "contract date."
32.
Broker Compensation from Seller
Compensation is earned when the broker has procured a buyer who is "ready, willing,
and able" to purchase the property under the exact terms of the listing agreement or any
other terms acceptable to the seller. (Remember that the failure of a contingency means
the buyer is not "able.") Commission is payable at COE pursuant to a separate written
agreement, generally the listing agreement (C.A.R. Form LA).
Under the agreement and C.A.R. Form LA commission is payable:
•
Upon recording of the deed.
•
In the event of a default by the buyer if and when the seller collects damages.
(The broker is entitled to no more than half of the damages collected, not to
exceed the amount of commission.)
•
The seller irrevocably assigns the compensation to the broker to be paid from the
seller's proceeds in escrow. In the event of a commission dispute, the funds will
typically be held in escrow (and not released to the seller) until the dispute is
resolved.
The prevailing party in a commission dispute is entitled to reasonable attorney's fees from
the non-prevailing party. The broker is a party to any commission disputes.
33.
Acceptance of Offer
The seller warrants the authority to sell the property. The seller agrees to agency
confirmation. The broker is authorized to deliver the signed contract to the buyer in order
to create a valid acceptance. If a counter-offer is to be issued, the box should be checked
and dated.
33
Seller's Signature Section
By signing the agreement, the seller acknowledges the following:
•
Acceptance of the exact terms and conditions of the offer.
•
Agreement to sell the property.
•
Agreement with the agency confirmation.
•
Agreement to pay the identified broker the amount of compensation for services set forth
in a separate written agreement.
Broker’s Signature Section
This section covers the following:
•
The signature of the broker does not make the broker a party to the contract.
•
The Selling Broker signs to confirm the agency relationship and receipt of a deposit.
•
The Listing Broker signs to confirm the agency relationship and agrees to pay the Selling
Broker pursuant to the MLS offer of compensation (if the Selling Broker is a participant
of that MLS or a reciprocal MLS) or pursuant to a separate written agreement.
Confirmation of Acceptance
A contract is formed when the seller’s acceptance is personally received by the buyer or the
buyer’s agent, whether or not this section is completed. This sentence is solely intended to
provide evidence of the date of acceptance.
Escrow Holder Acceptance of Escrow
The escrow holder acknowledges receipt of the contract and agrees to act as escrow holder. The
escrow holder can also fill in the amount of any deposit and other documentation, such as
counter-offers or addenda, received. The escrow holder is also asked to identify the date that the
parties have advised is the date of acceptance of the agreement.
34
Examining the Contract - Page By Page
(BIA)
Buyer’s Inspection Advisory
The property address should be filled in at the top of the form. The form is attached, and is
identified in paragraph 25 as an addendum to the RPA-CA. It can be purchased separately if the
C.A.R. Purchase Agreement is not used. The form does not create any obligations for the seller.
The first part of the form informs the buyer of the following:
A. The importance of a property inspection.
B. The duties of the buyer including discovery of the legal, practical or technical implications of
disclosed facts. Also the rights of a buyer to conduct inspections, to request corrective action
from the seller, and even to cancel under described circumstances.
C. The seller's obligation to disclose known material facts. Also the seller's right to refuse to
make any repairs requested buyer.
D. The broker’s obligation to conduct an inspection, and disclose known or discovered material
information. The limits on a broker's expertise.
E. The second part lists common items a buyer may wish to investigate and, in many cases, the
professionals who are in the best position to give buyer information about the item.
Specific references to mold, the insurance claims history of both the property and the buyer,
and botanical diseases are new additions.
Part three (the boxed information) is an acknowledgment by the buyer and the seller of the
limits of a broker’s responsibility and knowledge.
Part four is for the buyer’s and seller’s signature. The buyer’s signature acknowledges that the
buyer has been advised to investigate the property. If the buyer does not do so, the buyer is
acting against the advice of the broker. The seller’s signature acknowledges that the seller has
received a copy and is acknowledging what the buyer is advised to investigate and the limits
of a broker’s responsibility and knowledge.
35
Addendum to the RPA-CA
(RR)
Request for Repairs
This form is used in conjunction with the RPA-CA to document a buyer’s request for seller
repairs, the seller’s response, and the parties’ agreement, if agreement is reached.
•
In paragraph 1, the buyer can make repair requests by itemizing requests or
attaching lists, inspections or reports.
•
In paragraph 2, the seller can agree to make all repairs, agree to make some
repairs or indicate that they will make no repairs.
•
In paragraph 3, the buyer can (i) agree to accept the seller’s response and
withdraw all requests for items the seller has not agreed to repair, or (ii) withdraw
this request and submit a new request for repairs.
As with counter offers, multiple forms can be used until agreement is reached.
(RFR)
Receipt for Reports
This form is used in conjunction with the RPA-CA to:
1. Document the buyer’s receipt of disclosures and reports received from the seller and
others.
36
(CR)
Contingency Removal
This form is used in conjunction with the RPA-CA to:
1. Provide a simple form for the buyer to remove contingencies in writing.
The buyer can remove separate contingencies from an itemized list, remove all but select
contingencies (such as loan and appraisal) or remove all contractual contingencies by checking a
single box. There is also language stating that when the buyer removes a contingency, the buyer
has completed all investigations and inspections and review of reports relating to that contingency,
elected to proceed, and assumes all liability for repairs unless the seller has agreed to make repairs
or take other actions.
(NBP)
Notice to Buyer to Perform
The Notice to Buyer to Perform is used in conjunction with the RPA-CA to provide a notice to
the buyer to either remove contingencies or complete required contractual actions. It is separated
into two sections.
•
The first section is for contingency removal. The seller can request that the buyer remove
all contingencies by checking a single box, or can ask for removal of specific
contingencies by checking individual boxes.
•
The second section is for contractual action. The seller can request that the buyer take
specified contractual actions by checking individual boxes.
The Notice to Buyer to Perform gives the buyer at least 24 hour, but in no case less
than the time provided in the RPA-CA to remove the indicated contingencies or take the
indicated contractual action. Additionally, the RPA-CA can provide for a notice period
longer that 24 hours, in which case the Notice to Buyer to Perform must provide at least
37
that much time. If the buyer does not remove the indicated contingency or take the
indicated contractual action within 24 hours (or longer, if applicable) after receipt of the
Notice to Perform by the buyer or the buyer’s agent, the seller may cancel the agreement.
(NSP)
Notice to Seller to Perform
The Notice to Seller to Perform is used in conjunction with the RPA-CA to provide a notice to
the seller to meet the contractual action indicated. It provides a check- list for the required seller
action. If the seller does not perform, the buyer may cancel the agreement or delay removing
certain contingencies.
Although not specifically provided for in the RPA-CA, the Notice to Seller to Perform puts the
seller on notice that they have not completed required contractual actions, such as provide
agreed-to reports and disclosures. This Notice to Seller to Perform can be helpful to document
that the seller has failed to provide an agreed-to disclosure or report within the specified time. A
buyer may use the NSP as a reminder to the seller. The buyer may not have a desire to cancel but
instead may be interested in reviewing relevant documents. The NSP can also be helpful to prove
that a seller has not taken a required action or delivered an agreed to disclosure or report if the
seller now wants to buyer to remove a contingency related to that report or disclosure.
(SSD)
Supplemental Statutory and Contractual
Disclosures
This form is used in conjunction with the RPA-CA and provides a document for making
disclosures required by statute or the RPA-CA, that are not individually addressed on the TDS.
It covers manufacturing, industrial and airport use zones, former military ordnance locations,
release of illegal controlled substances, insurance claims and death of an occupant on the
property within three years.
38
(WPA)
Wood Destroying Pest Inspection and Allocation
of Cost Addendum
This WPA is an addendum the buyer and seller can use to agree to pre-allocate the cost of the
wood destroying pest control report and the cost of section 1 and section 2 repairs.
In paragraph A, the parties identify a pest control company and who is responsible to pay for the
report. Be sure to specify if the report will cover detached garages and carports, decks or other
identified structures.
Roof coverings are not covered. A buyer wishing to inspect the roof must do so under the
investigation of property, paragraph 9 of the RPA-CA.
If the property is a single unit, condo or planned development, only the unit itself is inspected,
not common areas.
In paragraph B, the parties designate who is to pay for Section 1 and Section 2 recommended
work. Section 1 and Section 2 are defined in this paragraph A.
If the report shows inaccessible areas, the buyer may request a further inspection within the time
specified. If no damage is found upon further inspection, the buyer will pay for the entry,
inspection, and closing of those areas. However the seller shall pay for the inspection entry and
closing of those inaccessible areas where active infestation or infection is found if the seller has
agreed to pay for Section 1 work.
If no infestation or infection is found, or upon completion of corrective work, the report will
include a certification, which will be issued prior to COE, unless otherwise agreed. If the
certification will be issued after COE, a separate written agreement is necessary. Section 1 work
must be completed in order to get a certification. A certification can only be issued by a
registered structural pest control company.
39
(COP)
Contingency for Sale or Purchase of Other
Property
The COP is an addendum for use when either: (1) paragraph 13B in the RPA-CA, Sale of
Buyer’s Property, is checked to create a contingency for the sale of buyer’s property or (2) the
seller wants the contingency for the seller to locate replacement property.
Sale of Buyer’s Property
Paragraph A, when checked, makes the purchase agreement contingent on the COE of the
buyer’s property. Paragraphs A1, 2 and 3 identify the property that is the subject of the
contingency and provide valuable information concerning the marketing status or the pending
sale of the contingent property.
The contingency is clearly the close of escrow of the buyer's property. However, the buyer may
remove the contingency early. Be sure the buyer is aware of the consequences of removing the
protection of the contingency before the actual close of escrow.
If the contingency remains and the buyer's property does not close escrow and the seller has not
received another offer on this property by the scheduled close date, then either party may cancel.
The seller can continue to market the property for sale and accept another offer unless paragraph
A6(b) is checked. If another offer is accepted, the seller will notify the buyer to remove the
contingency of the sale of the buyer’s property, remove the loan contingency, provide
verification of funds to close without the sale of buyer’s property and comply with specified
additional requirements. The seller may cancel if the buyer does not complete those actions
within the time specified. This is commonly known as the "72-hour clause" or "contingency
release clause." If paragraph A6(b) is checked, the seller does NOT have the right to require the
buyer to remove the contingency for the sale of the buyer's home. The seller can continue to
offer the property for sale, but only for back-up offers.
Seller’s Purchase of Replacement Property
Paragraph B, when checked, makes the purchase agreement contingent on the seller entering into
a contract for a replacement property. Paragraph B2 provides that the seller has 17 days (unless
40
otherwise agreed) to remove the contingency. If the seller does not remove the contingency, the
buyer can cancel the agreement.
Paragraph B3 provides that when the seller removes the contingency, seller may extend close of
escrow for an agreed upon time. Paragraph B3 also provides that time periods in the purchase
agreement for inspections, contingencies, covenants and other obligations will remain as
specified in the purchase agreement, or, if checked, will begin the day after the seller removes
their contingency.
(PAA)
Purchase Agreement Addendum
The Purchase Agreement Addendum can be used in conjunction with an offer or counter-offer.
Numbered Paragraphs
Only those paragraphs which are checked are included in the offer or counter-offer.
1.
Cancellation of Prior Sale; Back-Up Offer
This offer is contingent upon cancellation of prior offers between the seller and other
buyers. Cancellation of those prior offers is not automatic, and parties to those prior
offers may modify or amend them (e.g., the fact that the escrow time has expired on the
prior offer does not mean the offer has been canceled. Both parties may even agree to
extend that prior offer!).
The buyer may cancel this agreement at any time until cancellation of the prior sale is
signed by all parties. If cancellation of the prior sale has not been signed by the date
specified, then either the seller or buyer may cancel this agreement.
A.
This portion states that the deposited check will be held uncashed until written
cancellation of the prior sale has been signed by the seller and prior buyers.
If the parenthetical is checked, the deposit check will be cashed as stated in the
Purchase Agreement.
41
B.
2.
This portion states that the time periods begin the day the buyer receives written
notification of cancellation of the prior sale. If the parenthetical is checked, time
periods begin as specified in the agreement. If the close of escrow date is a “date
specific,” that date will not be extended without further written agreement.
Seller To Remain in Possession After Close of Escrow
This paragraph is intended for use when the seller is to remain in possession after close of
escrow for a short period of time (i.e. less than 30 days). If the seller will remain in
possession of the property for longer than 30 days, the Residential Lease After Sale
(C.A.R. from RLAS) should be used.
The buyer and seller are advised that local rent control or other laws may affect their
rights if the seller remains in possession after the close of escrow.
This paragraph provides for the length of the term the seller will remain in possession,
and for the amount of compensation, either on a per day basis or as one lump sum. The
seller agrees to deposit the compensation in escrow prior to the close of escrow or to have
the funds withheld from the seller’s proceeds. It also provides that the seller will pay a
specified amount per day for any holding over.
If payment is to be made in more than one payment, the seller agrees to pay a specified
amount as a late charge for any late payment and a $25 charge for any non-sufficient
funds check.
The seller agrees to pay for all utilities and services unless otherwise provided for in the
blank spaces.
The seller agrees to make the property available to the buyer for agreed upon repairs or
services, and to show the property to prospective or actual purchasers, tenants, lenders or
appraisers. Twenty-four hours notice is agreed to as a reasonable notice. The buyer may
enter at any time in the event of an emergency.
The seller agrees to maintain the property in substantially the same condition as on the
date of acceptance of the Purchase Agreement. The seller also agrees not to assign or
sublet the property or transfer the right of occupancy without the buyer’s written consent.
Upon vacating the property, the seller agrees to deliver the property in the condition and
on the terms agreed to in the Purchase Agreement.
The seller is advised that the buyer’s insurance does not protect the seller’s personal
property. The seller agrees to carry insurance to protect the seller’s personal property.
42
The waiver of any breach is not to be considered a waiver of any subsequent breach.
There are blank lines for the buyer and seller to provide for any other conditions.
3.
Tenant To Remain in Possession
This paragraph provides for delivery of possession subject to the rights of the tenants to
continue to occupy the property or to vacate.
Remember that in paragraph 3 of the Purchase Agreement, the property was to be
delivered vacant unless otherwise agreed in writing, which is what this paragraph does.
If the tenant will remain in possession, the buyer must receive copies of all rental
documents within seven (7) days (or date specified) after the acceptance.
If the seller makes changes to the existing leases, buyer may cancel the agreement.
Further unused tenant deposits must be transferred to the buyer.
There is no warranty regarding rent or occupancy control under this paragraph. Under
paragraph 13 of the BIA, the buyer is advised to investigate such controls.
Keep in mind that it may be more appropriate to use C.A.R. Form RIPA (Residential
Income Property Purchase Agreement and Receipt for Deposit) for rental property.
4.
Secondary or Assumed Financing
Secondary financing and assumptions are not provided for in the RPA-CA. The liens
must be spelled out here. If this paragraph is used as an addendum to the RPA-CA, the
amount should be included in paragraph 1 of the Purchase Agreement as part of the total
purchase price and this form should be specifically referenced. The loan and assumption
contingency shall remain for 17 days, or the period specified, or until funding or approval
if that option is checked.
The terms should be set forth specifically and not left to future interpretation. Do not use
“best available rate and terms.” Allow for market fluctuations by using the upper limits
of what the buyer will pay. If the market is lower, the lender will use the current market
rate and the buyer will not complain!
If both the fixed rate and the adjustable rate (ARM) information is filled in, then the
buyer is obligated to complete the transaction with whichever option is obtainable from
43
the lender. If the buyer does not want an ARM then be sure NOT to complete those
blanks.
The buyer has a specified time to disapprove items in the loan documents provided by the
seller. The lender must provide the seller with complete copies of the note and deed of
trust, loan balances, and current interest rate within 21 days of written request. The lender
may charge a fee not to exceed $60. The adjustment between the actual loan balance and
the estimate, if different, is to be made in cash.
The buyer will be charged with the amount of funds in the impound account unless
otherwise specified.
The buyer agrees to obtain a release of liability on the assumption of a V.A. loan. The
buyer must have the lender’s approval to take over that loan (the buyer does not have to
be a veteran to get a release of liability).
The buyer agrees to a substitution of eligibility on the assumption on a V.A. loan. The
buyer must be a qualified veteran to substitute. Until the loan is paid in full, or another
veteran has substituted eligibility, the original veteran borrower will not qualify for
another full VA loan.
5.
Short Pay
The agreement is contingent upon the seller receiving consent from existing lien holders
to a “short pay”. The seller agrees to cooperate with all lenders in the short-pay process.
Either party may cancel if the consent is not received by the contingency date. Lenders do
not have to accept short pays. The seller may continue to submit other offers to the
lender. The seller is advised to seek advice from other professionals regarding credit,
legal or tax implications, of the short pay.
6.
Court Confirmation
If the court confirmation is not received by the specified date, the buyer may cancel.
Court confirmation may be required in a number of proceedings which are listed in this
clause, including probate, bankruptcy, etc. Probate Purchase Agreement and Joint Escrow
Instruction PPA, should be used when probate court confirmation is required. The broker
may continue to market the property and represent competing buyers.
44
(SFA Page-1)
Seller Financing Addendum and Disclosure
This form satisfies the requirement of the law that disclosures be given between the buyer and
the seller when the seller carries financing on residential one-to-four unit properties.
This form is also an addendum to the Purchase Agreement. It is not just a disclosure. It is
contractual.
The terms should be set forth specifically and not left to future interpretation.
The buyer has five (5) days (or days specified) to submit a loan application. The buyer
authorizes, and will pay for, a credit report to be submitted to the seller. The buyer will also
provide other documents requested by the seller such as tax returns, 1099's, etc. to the seller.
The seller may cancel, in writing, if the documents are not provided or if Seller reasonably
disapproves of them.
The terms in paragraphs 4-14 are only contractually included if checked. Even if the paragraph is
not checked, a seller should read the paragraph to make an independent decision about whether
to include, by way of a counter offer, that term as part of the agreement. Many paragraphs
contain advice about the acceptance of each term and what to look out for if the item is not
checked. Also included:
•
Statutory Limits on late charges are specified here.
•
Balloon and pre-payment information should be included here.
•
The seller and lender have the option to call to loan due on sale or to allow an
assumption by a subsequent buyer.
•
There is no time requirement for a lender to file a Notice of Default. The loan could be
several months in arrears before the senior lender initiates a foreclosure action. That puts
the junior lienholder in the difficult position of having to make up many months of back
payments to protect the beneficial interest.
•
The Notice of Delinquency takes care of the problem mentioned above by requiring that
the senior lienholder notify the junior lienholder when the payment is four months in
45
•
arrears.
Tax service is the notice that property taxes have not been paid.
•
Joint protection title insurance covers the seller’s interest, as well as the lender’s, in
addition to the buyer’s ownership interest.
•
The seller must be added as a loss payee on the insurance policy and, if not, should
secure the endorsement or acquire a separate policy. Earthquake and flood insurance are
not required unless specifically checked.
•
Any cash proceeds to the buyer are referenced here.
•
Information about negative amortization and deferred interest is included here.
(SFA Page 2 & 3)
Seller Financing Addendum and Disclosure
Paragraphs 15 – 19 are additional optional paragraphs that are only included if the applicable box
is checked.
•
All-inclusive deed of trust or land sale contract language is outlined here.
•
Social Security numbers or tax I.D. numbers are needed for 1099's and other tax
purposes.
•
Other credit terms should be filled in here.
•
The importance of recording documents is included here.
•
If junior financing terms are included, check the appropriate box and give an explanation.
Paragraph 20 allows for the parties to outline estimates for senior loans and encumbrances.
If there are other documents/disclosures the seller wants from the buyer, they should be
referenced in paragraph 21.
Any substitution, deletion or addition of any person requires the seller’s written consent.
46
Paragraph 23 contains the following warning and should be pointed out to the parties:
•
Warning to the seller about the risk of the buyer’s default.
•
Advisory regarding risk of getting paid on new financing at maturity if the loan is a
balloon payment loan.
•
Ordinarily, contracts are freely assignable but, because the seller is relying on the
financial resources and representation of the buyer, the contract may not be assigned
without the seller’s consent.
For purposes of the seller financing disclosures, the arranger of credit is usually the agent
representing the buyer and is the one responsible for the preparation of this form.
(CBC)
Cooperating Broker Compensation Agreement
and Escrow Instructions
The (CBC) is used to confirm the commission agreement between the listing broker and the
selling (cooperating broker), and to provide an escrow instruction for the disbursement of
commission at the COE.
Paragraph 1 identifies the listing broker, the property and the seller.
Paragraph 2 identifies the selling broker and the buyer.
Paragraph 3 sets out the commission agreement between the brokers and provides four options:
• The property is listed in the MLS and the selling broker is a participant in that MLS or
a reciprocal MLS and accepts the MLS offer of compensation.
• The property is listed in the MLS and the selling broker is a participant in that MLS or
a reciprocal MLS, but the parties have agreed to modify the MLS offer of
compensation as set out following this option.
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• The property is listed in the MLS and the selling broker is NOT a participant in that
MLS or a reciprocal MLS, and the parties have agreed to compensation as set out
following this option.
• The property is NOT listed in the MLS, and the parties have agreed to compensation as
set out following this option.
Paragraph 4 is an instruction from the listing agent to escrow to disburse the amount agreed to in
paragraph 3 from the listing agent’s proceeds at the COE.
Examining the Listing Agreement (Exclusive
Authorization and Right To Sell) (LA)
The Residential Listing Agreement is a contract between the owner or owners of a piece of
residential real property and a real estate broker. By entering into this contract, the owner agrees
to hire the Broker as an exclusive agent to sell the property. The owner also agrees to
compensate the Broker for procuring a “ready, willing, and able” buyer during the listing period.
Numbered Paragraphs
1.
Exclusive Right to Sell
This paragraph provides the Broker with the exclusive right to sell the subject property.
Seller: List the names of all sellers.
In most situations, the sellers should be the owners of the subject property, the persons
who intend to sell the property, and the persons with the authority to both list and sell the
property. See also “Ownership, Title and Authority” in paragraph 5 below.
Practice Tip: Before taking a listing, it is a good idea to obtain a property profile or check
the public records for the subject property. Use this information to verify that the
Seller(s) entering into the listing agreement matches exactly with the owner(s) of record.
If the purported Seller is not the owner of record, or not the only owner of record, the
listing agent’s efforts in listing and marketing the property might turn out to be a waste of
time.
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Broker: Insert the name of the Listing Broker.
The Seller enters into the Listing Agreement with the real estate broker or brokerage, not
the individual salesperson or broker-associate.
Beginning Date: Insert the calendar date the listing period will begin.
Practice Tip: The listing period should begin, if possible, on the day the parties enter into the
Listing Agreement. This is because the Seller is less likely to have misgivings about the listing if
the listing agent immediately begins advertising and marketing the subject property. Of course,
in some situations, the listing agent has no choice but to schedule the listing period to begin at a
later date (e.g. when waiting for a prior listing agreement to expire).
Ending Date: Insert the calendar date the listing period will end.
Always fill in this blank with an ending date! A listing agent cannot claim, demand, or
receive a commission under an exclusive listing agreement unless that agreement
contains “a definite, specified date of final and complete termination” (see California
Business & Professions Code Section 10176(f)).
Determining the proper length of time for a particular listing requires a careful weighing
of various countervailing factors, such as the listing price, the condition of the property,
the parties’ requirements, and market conditions. If the listing period is very short (e.g.
30 days), the listing agent may spend a lot of time, money, and effort to market the
property, yet not find a buyer, nor earn a commission, within the specified time. On the
other hand, if the listing agent insists on a lengthy listing period (e.g. 12 months), the
seller may distrust the listing agent’s ability to sell the property.
City: Insert the name of the city where the subject property is located.
County: Insert the name of the county where the subject property is located.
2. Items Excluded and Included
A sale will include all fixtures and fittings attached to the subject property.
Fixtures are items that become so related to a piece of real property that they
become part of the sale of that real property. In contrast, items of personal
property are not included in the sale of real property (unless specified otherwise
by contract).
Whether an item is a fixture or personal property is a question of fact to be
determined on a case-by-case basis. Many items are obviously a fixture (e.g.
49
roof) or personal property (e.g. lawn chair), but some items are not so easily
characterized (e.g. custom-made drapes)
A.
Items Included in Sale: List any and all items of personal property to be
included in a subsequent sale.
Whenever in doubt, simply list any and all items the Seller wants to include in a
subsequent sale, such as appliances, custom-made items, and the like.
B.
Items Excluded From Sale: List any and all items attached to the subject
property to be excluded from a subsequent sale.
When in doubt, list anything attached to the property that the Seller wants to
exclude from a subsequent sale. Pay particular attention to items out of the
ordinary, such as family heirlooms, chandeliers, antique fixtures, etc.
3. Listing and Pricing Terms
A.
List Price: Write out the List Price using words, and in the parenthesis after
the dollar sign, using numbers.
The List Price is the target price at which, if offered by a ready, willing, and able
buyer, the Broker earns his or her compensation. Hence, the List Price is usually
what the Seller is willing to sell the property for.
As with the listing period, determining the correct List Price requires a careful
balancing of various factors, including, among other things, the condition of the
property, the parties’ requirements (e.g. how quickly the Seller wants to sell the
property), comparable sales, and market conditions. If the List Price is too low,
the Seller may get frustrated receiving a lot of offers that never amount to
anything. If the List Price is too high, the Seller may get no sales activity at all.
B.
Additional Terms: Insert any additional terms and conditions.
This section contains any additional terms of sale. If the space provided is not
enough, insert here “See attached Addendum Number ____ incorporated herein.”
Set forth the additional terms on a separate piece of paper entitled “Addendum
Number ____,” and attach it to the Listing Agreement.
Note: The terms of sale are set forth here primarily to help the listing agent
advertise and market the property. For a subsequent sale, be sure to reiterate the
50
items to be included and excluded, and any additional terms of sale, in the sales
contract between the Seller and the buyer.
4.
Compensation to the Broker
This paragraph contains the terms and conditions of the Broker’s compensation.
Notice: The amount or rate of real estate commissions is not fixed by law. They are
set by each Broker individually and may be negotiable between Seller and Broker.
This Notice must be set forth in not less than 10-point boldface type on any printed or
standard-form agreement establishing or altering a listing agent’s right to compensation
in the sale of one-to-four residential units (see California Business & Professions Code
Section 10147.5(a)).
A.
(Rate or Amount of Broker’s Compensation).
The Broker’s commission can be expressed either as a percentage of the List Price
(or the sales price if the Seller has entered into a sales contract) or as a flat fee.
The advantage to the Seller of paying a commission rate (e.g. 6%) is that it gives
the Broker an incentive to bring as high of an acceptable offer as possible. On the
other hand, by using a flat fee, the Seller will know exactly how much the
Broker’s commission will be, regardless of the sales price.
Check the appropriate box and insert either the commission rate or amount. Keep
in mind that, for one-to-four residential units, the Broker should never pre-print
the commission rate or amount (see California Business & Professions Code
Section 10147.5(b)).
Some brokers charge some sort of administrative or transaction fee. Before
writing in such a charge in addition to a flat fee or commission, the Broker’s
policy should be consulted. If allowed, any recommended language should be
used and any additional required documentation should be attached.
A(1)
(Exclusive Authorization).
By entering into this exclusive Listing Agreement, the Seller agrees to
compensate the Broker as long as anyone procures a ready, willing, and able
buyer during the listing period. It makes no difference if the procuring cause is
the Broker, the Seller, a cooperating broker, a neighbor, anyone else, or no one at
all.
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If, however, the Seller refuses to compensate the Broker for a buyer procured by
the Seller, the proper listing agreement to use is the “Exclusive Agency
Authorization and Right to Sell” (C.A.R. Form EA-11). If the Seller refuses to
compensate the Broker for a buyer procured by anyone other than the Broker, the
proper listing agreement to use is the “Non-Exclusive (“Open”) Agency
Authorization and Right to Sell” (C.A.R. Form NEA-11).
A(2)
(Safe Harbor Provision): Insert the number of “safe harbor” days after the
listing period ends.
This subparagraph is the safe harbor provision. To avoid paying the Broker’s
compensation, a seller may be tempted to reject an offer from a buyer procured by
the Broker, only to sell the subject property to that same buyer after the listing
period ends. The safe harbor provision reduces the possibility of this type of
abuse by protecting the Broker’s compensation for a certain number of days after
the listing period ends.
The safe harbor provision, however, has two limitations. First, it only pertains to
prospective buyers who, during the listing period, physically entered and were
shown the property, or who submitted written offers to the Seller. Hence, the
Broker is not protected if the property is sold to someone other than one of the
Broker’s prospective buyers or related entities. Second, the safe harbor applies
only if, within 3 calendar days after the listing period ends, the Broker provides
the Seller with a written list of these prospective buyers.
Determining the proper number of safe harbor days requires a weighing of various
factors. If the safe harbor period is too short (e.g. 30 days), the Broker has very
little protection. On the other hand, if the Broker demands a lengthy safe harbor
period (e.g. 12 months), the Seller may not give the listing to the Broker.
A(3)
(Seller’s Interference).
The Broker is entitled to full compensation if, without the Broker’s consent, the
Seller withdraws the property from sale, transfers the property, or renders the
property unmarketable.
B.
(Third-Party Default).
If a subsequent sale falls through at no fault of the Seller, the Broker’s
compensation is limited to one-half of whatever the Seller collects as money
52
damages, not to exceed the agreed-upon commission (plus the
administrative/transaction fee).
C.
(Other Fees): List any costs to be paid by Seller, other than the commission.
Other costs to be paid by the Seller could include MLS fees, special advertising
fees, or other costs for marketing the property. If there are no other costs to the
Seller, insert “N/A” to emphasize this fact.
D.
(Cooperating Brokers).
The Broker has the discretion to determine the rate or amount of compensation
for any cooperating broker, unless such compensation is specifically set forth
below.
E.
(Irrevocable Assignment; Payment Through Escrow).
This provision entitles the Broker to receive his or her compensation through
escrow, thereby avoiding any problems of collecting such funds from the Seller
directly. Also, the irrevocable assignment language means that the Seller agrees
not to revoke, cancel, or put on hold any instruction to escrow to pay such
compensation to the Broker at close of escrow.
F.
(Previous Listings): Identify any prior listing agent(s) to whom the Seller
may owe compensation, AND list the names of the prospective buyers
procured by that agent.
Even if a listing period has ended, a seller who had a Listing Agreement with
Broker A will not want to enter into a new Listing Agreement with Broker B
during Broker A’s safe harbor period (see paragraph 4A(2) above). Otherwise,
the Seller risks being obligated to pay full commissions to both brokers if a buyer
procured by Broker A buys the property during both Broker A’s safe harbor
period, and Broker B’s listing period.
To avoid this result, subparagraph 4F allows the Seller to exclude prospective
buyers procured by Broker A from Broker B’s Listing Agreement. Broker B will
not receive any compensation if anyone on this list buys the property.
Practice Tips: A prudent listing agent in Broker B’s position will carefully
review the terms of the Seller’s Listing Agreement with Broker A, and verify
that Broker A’s list of prospective buyers has been timely and properly submitted
to the Seller. Also, if Broker A’s safe harbor period ends before Broker B’s
53
listing period ends, Broker B may want the exclusion to terminate when Broker
A’s safe harbor period ends. For example, Broker B takes a listing from January
1 to March 31, but Broker A’s safe harbor period for certain buyers ends April
30. Broker B may want to exclude these buyers until April 30 only, and not for
the full duration of Broker B’s listing period to March 31.
5.
Multiple Listing Service (“MLS”): Do nothing if property will be listed in MLS;
otherwise, check “will not” box.
Unless otherwise checked, the Broker has the authority to list the property in the MLS,
and in any Internet service approved by the MLS.
6.
Ownership, Title and Authority
The Seller warrants that he or she owns the property, that no one else owns the property,
and that the Seller has the authority to both enter into the Listing Agreement and any
subsequent sales contract. Any exceptions to these warranties of ownership, title, and
authority should be explained under “Exceptions.”
7.
Seller Representations
The Seller represents that seller has no knowledge of certain facts likely to affect the
marketability of the property, such as recorded notices of default, delinquent obligations,
bankruptcies, pending or threatened lawsuits or other actions, and special assessments. If
the seller becomes aware of the existence of any of these facts seller shall give a
disclosure to the Broker.
8.
Broker’s and Seller’s Duties
The Broker agrees to work diligently to achieve the purposes of the Listing Agreement.
The Broker has the authority to advertise and market the property in any medium,
including the Internet.
The Seller agrees to consider all offers, to act in good faith to sell the property, to make
the property available for showings, to refer all inquiries to the Broker, and to assume
responsibility for determining the List Price. The Seller also agrees to indemnify, defend,
and hold the Broker harmless from all claims arising from any misrepresentation or
concealment of fact made by the Seller.
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9.
Deposit
The Broker has the authority to accept and hold, on the Seller’s behalf, any earnest
money deposits received.
10.
Agency Relationships
A.
Disclosure: For one-to-four residential units, provide the Seller with the
“Disclosure Regarding Real Estate Agency Relationships” (C.A.R. Form AD11).
The agency disclosure form, which sets forth the various types of agency
relationships, must be provided by the listing agent to the Seller “prior to entering
into the listing agreement” (see California Civil Code Section 2079.14(a)). Both
the Seller and the listing agent should sign and date the disclosure form where
indicated.
B.
Seller Representation.
The Broker will represent the Seller in any subsequent sale of the property.
C.
Possible Dual Agency With Buyer.
The Seller consents that, upon proper disclosure, the Broker may act as a dual
agent representing both the Seller and the buyer.
D.
Other Sellers.
The Seller consents that the Broker may have other listings and other clients.
E.
Confirmation.
For one-to-four residential units, the Broker agrees to confirm his or her status as
the listing agent, or to modify his or her status to dual agent, before the Seller
enters into a sales contract.
11.
Security and Insurance
The Seller agrees that the Broker is not responsible for any loss or damage caused by
using a keysafe/lockbox or by showing the property. The Seller is advised to take all
55
reasonable precautions for safeguarding the real property and its contents, and to obtain
insurance to protect against any risks.
12.
Keysafe/Lockbox
The Broker is authorized to install a keysafe/lockbox on the property, unless the box is
checked withholding the consent.
13.
Sign
The Broker is authorized to install a For Sale/Sold sign on the property, unless the box is
checked withholding the consent.
14.
Equal Housing Opportunity
Both the Seller of real property and a listing agent are prohibited from discriminating
against a protected class, including, but not necessarily limited to, classes of race, color,
religion, sex, handicap, familial status, and national origin.
15.
Attorney’s Fees
In the event of a lawsuit or other proceeding involving the Broker’s compensation, the
prevailing party can recover attorney’s fees and costs.
16.
Additional Terms: Set forth any additional terms to the Listing Agreement.
Compare: All additional terms involving a subsequent sale of the property should be set
forth in paragraph 3B above whereas all additional terms involving the Listing
Agreement should be set forth here in paragraph 16.
17.
Management Approval
A salesperson or broker-associate often enters into a Listing Agreement on behalf of the
Broker. In most cases, this poses no problem. However, if the salesperson agrees to
terms that are unacceptable to the Broker/manager, this provision allows the
Broker/manager to cancel the Listing Agreement within 5 days of execution.
18.
Successors and Assigns
The Listing Agreement is binding upon the Seller’s successors and assigns. If, without
the Broker’s consent, the Seller transfers the property in violation of the Listing
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Agreement (see paragraph 3A(3) above), the Broker may prefer to act as the listing agent
for the transferee, rather than sue for compensation. This provision may be used to assist
the Broker in convincing any transferee to continue with the listing.
19.
Dispute Resolution
A.
Mediation.
The parties agree to mediate any dispute arising out of the Listing Agreement
(with certain exceptions set forth in paragraph 19B(2) below). Mediation is
required even if the parties do not initial anything.
Mediation entails an attempt by a neutral third-party to convince the contractual
parties to voluntarily resolve their differences. If a party commences an action
without first attempting mediation pursuant to this provision, that party is barred
from recovering attorneys’ fees.
B.
Arbitration of Disputes: Both parties must insert their initials for this clause
for the Arbitration Clause to apply.
If properly initialed, the parties agree to submit to binding arbitration for any
dispute arising out of the Listing Agreement, which is not settled by mediation
(with certain exceptions set forth in paragraph 19 B(2) below). The “Notice”
must be set forth in at least 10-point boldface type for an arbitration agreement to
be enforceable.
Arbitration is an alternative dispute resolution to the court system. The parties
submit their arguments and evidence to an agreed-upon arbitrator (rather than a
judge or jury). The arbitrator shall render a decision. The arbitrator’s decision or
award can only be set aside by the losing party in very limited circumstances,
such as failure of due process, fraud, or corruption by the arbitrator. Otherwise,
the prevailing party can have the arbitrator’s award confirmed as a judgment in
any court having proper jurisdiction.
Determining whether arbitration is a better way to resolve a dispute as compared
to the court system entails legal opinion. Thus, the Broker should not advise the
Seller to initial or not initial the arbitration clause.
B2.
Exclusions from Mediation and Arbitration.
57
Various matters are excluded from the obligation to mediate or arbitrate,
including foreclosures, unlawful detainer actions, mechanic’s lien procedures,
probate, small claims, and bankruptcy matters, notices of lis pendens, attachment
orders, and receivership, injunction, and other provisional remedies.
20.
Entire Contract
The Listing Agreement supercedes any and all prior negotiations and agreements
between the parties regarding this matter. The Listing Agreement, including any
photocopy or facsimile, can be signed in counterparts.
Signature by Sellers
By signing the Listing Agreement, the Seller acknowledges that he or she has read and
understands the agreement and has received a copy. The Seller should insert the date of
signature, and provide an address, phone, fax, and e-mail information. The Seller should also
initial the bottom of pages 1 and 2.
This section has space for two sellers to sign. However, in most situations, all owners of the
subject property should sign the Listing Agreement. Thus, if there are additional sellers, use
additional signature pages.
Signature by Broker
The salesperson or broker-associate taking the listing can complete the Broker’s information and
sign as authorized representative of the Broker. The listing agent should also write in the
property address and date of execution on the top of pages 2 and 3, and initial the bottom of
pages 1 and 2.
No one should sign the Listing Agreement until all pages have been completed. Upon
completion and signature, the listing agent should immediately provide the Seller with a copy of
the entire Listing Agreement.
58
Examining the Contract
(SA)
Seller’s Advisory
The 2-page Seller’s Advisory is attached to the Listing Agreement. Its purpose is to inform the
Seller up front of various matters that may arise when selling real estate in California, including
disclosure issues (including those related to death on the property), contract terms and legal
requirements, pre-sale considerations, post-sale protections, safety precautions, and expenses.
The goal of the form is to make the seller aware of these issues early on, encouraging the
seller to identify, address, and resolve potential problems as soon as possible. These issues
should be considered either before the property is put on the market or before the negotiating
and selling process consumes the seller's attention. This approach establishes expectations
and helps avoid surprise and efforts to sidestep or bypass necessary steps in the sale process
that can result if expectations are not met. The form is both an educational and preparation
tool.
Fill in the property address of the subject property at the top of pages 1 and 2. Any additional
advisory items should be set forth in paragraph 5 on page 2. The Seller should initial page 1, and
sign and date page 2 where indicated. Upon signing, the listing agent should immediately
provide the Seller with a complete copy of the Seller’s Advisory.
59
Conclusion
The C.A.R. California Residential Purchase Agreement (RPA-CA), standing alone or with
related addenda discussed in this book, can be used in almost all residential transactions as it
serves the needs of most parties desiring to contract to purchase and sell real estate.
Remember, the purchase and sale of a home is a major financial investment and should be
handled as such. In addition, the Purchase Agreement is the foundation of the real estate
transaction. Be sure that you understand the entire Purchase Agreement BEFORE drafting or
reviewing an offer for your client.
60
CALIFORNIA
A S S O C I AT I O N
OF REALTORS®
CALIFORNIA
RESIDENTIAL PURCHASE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
For Use With Single Family Residential Property — Attached or Detached
(C.A.R. Form RPA-CA, Revised 10/02)
LLEE
MMPP
SSAA
Date _____________________________, at ______________________________________________________________, California.
1. OFFER:
A. THIS IS AN OFFER FROM ________________________________________________________________________________ (“Buyer”).
B. THE REAL PROPERTY TO BE ACQUIRED is described as _______________________________________________________
______________________________________________________, Assessor’s Parcel No. __________________________, situated in
______________________________________________, County of __________________________________, California, (“Property”).
C. THE PURCHASE PRICE offered is ________________________________________________________________________
________________________________________________ Dollars $ ___________________________________________.
D. CLOSE OF ESCROW shall occur on ___________________________________ (date)(or ■ ______ Days After Acceptance).
2. FINANCE TERMS: Obtaining the loans below is a contingency of this Agreement unless: (i) either 2K or 2L is checked below; or
(ii) otherwise agreed in writing. Buyer shall act diligently and in good faith to obtain the designated loans. Obtaining deposit, down
payment and closing costs is not a contingency. Buyer represents that funds will be good when deposited with Escrow Holder.
A. INITIAL DEPOSIT: Buyer has given a deposit in the amount of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ ____________
to the agent submitting the offer (or to ■ _________________________________), by personal check
(or ■ _____________________), made payable to ______________________________________,
which shall be held uncashed until Acceptance and then deposited within 3 business days after
Acceptance (or ■ _____________________________________________________________), with
Escrow Holder, (or ■ into Broker’s trust account).
B. INCREASED DEPOSIT: Buyer shall deposit with Escrow Holder an increased deposit in the amount of . . .$ ____________
within ____ Days After Acceptance, or ■ _________________________________________________.
C. FIRST LOAN IN THE AMOUNT OF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ ____________
(1) NEW First Deed of Trust in favor of lender, encumbering the Property, securing a note payable at
maximum interest of ________% fixed rate, or ________% initial adjustable rate with a maximum
interest rate of ________%, balance due in ________ years, amortized over ________ years. Buyer
shall pay loan fees/points not to exceed ________. (These terms apply whether the designated loan
is conventional, FHA or VA.)
(2) ■ FHA ■ VA: (The following terms only apply to the FHA or VA loan that is checked.)
Seller shall pay ______% discount points. Seller shall pay other fees not allowed to be paid by
Buyer, ■ not to exceed $______________. Seller shall pay the cost of lender required Repairs
(including those for wood destroying pest) not otherwise provided for in this Agreement, ■ not to
exceed $ ___________. (Actual loan amount may increase if mortgage insurance premiums,
funding fees or closing costs are financed.)
■ Seller financing, (C.A.R. Form SFA); ■ secondary financing, . . . .$ ____________
D. ADDITIONAL FINANCING TERMS: ____________________________________________________
(C.A.R. Form PAA, paragraph 4A); ■ assumed financing (C.A.R. Form PAA, paragraph 4B)
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
E. BALANCE OF PURCHASE PRICE (not including costs of obtaining loans and other closing costs) in the amount of . . .$ ____________
to be deposited with Escrow Holder within sufficient time to close escrow.
F. PURCHASE PRICE (TOTAL): . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ ______________
G. LOAN APPLICATIONS: Within 7 (or ■ ______) Days After Acceptance, Buyer shall provide Seller a letter from lender or
mortgage loan broker stating that, based on a review of Buyer's written application and credit report, Buyer is prequalified or
preapproved for the NEW loan specified in 2C above.
H. VERIFICATION OF DOWN PAYMENT AND CLOSING COSTS: Buyer (or Buyer’s lender or loan broker pursuant to 2G) shall, within
7 (or ■ ____________) Days After Acceptance, provide Seller written verification of Buyer’s down payment and closing costs.
I. LOAN CONTINGENCY REMOVAL: (i) Within 17 (or ■ ______) Days After Acceptance, Buyer shall, as specified in paragraph
14, remove the loan contingency or cancel this Agreement; OR (ii) (if checked) ■ the loan contingency shall remain in effect
until the designated loans are funded.
J. APPRAISAL CONTINGENCY AND REMOVAL: This Agreement is (OR, if checked, ■ is NOT) contingent upon the Property
appraising at no less than the specified purchase price. If there is a loan contingency, at the time the loan contingency is
removed (or, if checked, ■ within 17 (or ____) Days After Acceptance), Buyer shall, as specified in paragraph 14B(3), remove
the appraisal contingency or cancel this Agreement. If there is no loan contingency, Buyer shall, as specified in paragraph
14B(3), remove the appraisal contingency within 17 (or ____) Days After Acceptance.
K. ■ NO LOAN CONTINGENCY (If checked): Obtaining any loan in paragraphs 2C, 2D or elsewhere in this Agreement is NOT
a contingency of this Agreement. If Buyer does not obtain the loan and as a result Buyer does not purchase the Property, Seller
may be entitled to Buyer’s deposit or other legal remedies.
L. ■ ALL CASH OFFER (If checked): No loan is needed to purchase the Property. Buyer shall, within 7 (or ■ _____) Days After Acceptance,
provide Seller written verification of sufficient funds to close this transaction.
3. CLOSING AND OCCUPANCY:
A. Buyer intends (or ■ does not intend) to occupy the Property as Buyer's primary residence.
B. Seller-occupied or vacant property: Occupancy shall be delivered to Buyer at _____ AM/PM, ■ on the date of Close Of
Escrow; ■ on _____________; or ■ no later than _______ Days After Close Of Escrow. (C.A.R. Form PAA, paragraph 2.) If
transfer of title and occupancy do not occur at the same time, Buyer and Seller are advised to: (i) enter into a written occupancy
agreement; and (ii) consult with their insurance and legal advisors. Buyer’s Initials (__________)(__________)
The copyright laws of the United States (Title 17 U.S. Code) forbid the unauthorized
reproduction of this form, or any portion thereof, by photocopy machine or any other
means, including facsimile or computerized formats. Copyright © 1991-2002,
CALIFORNIA ASSOCIATION OF REALTORS®, INC. ALL RIGHTS RESERVED.
RPA-CA REVISED 10/02 (PAGE 1 OF 8) Print Date
4.
Broker’s Initials (__________)(__________)
Buyer’s Initials (__________)(__________)
Seller’s
Initials (__________)(__________)
Reviewed
by ___________
Date _______
Reviewed by _______ Date _______
CALIFORNIA RESIDENTIAL PURCHASE AGREEMENT (RPA-CA PAGE 1 OF 8)
61
EQUAL HOUSING
OPPORTUNITY
EQUAL HOUSING
OPPORTUNITY
Property Address: _____________________________________________________
Date: _________________
Tenant-occupied property: (i) Property shall be vacant at least 5 (or ■ ______) Days Prior to Close Of Escrow, unless
otherwise agreed in writing. Note to Seller: If you are unable to deliver Property vacant in accordance with rent control
and other applicable Law, you may be in breach of this Agreement.
OR (ii) (if checked) ■ Tenant to remain in possession. The attached addendum is incorporated into this Agreement (C.A.R. Form
PAA, paragraph 3.);
OR (iii) (if checked) ■ This Agreement is contingent upon Buyer and Seller entering into a written agreement regarding occupancy
of the Property within the time specified in paragraph 14B(1). If no written agreement is reached within this time, either Buyer or
Seller may cancel this Agreement in writing.
D. At Close Of Escrow, Seller assigns to Buyer any assignable warranty rights for items included in the sale and shall provide any
available Copies of such warranties. Brokers cannot and will not determine the assignability of any warranties.
E. At Close Of Escrow, unless otherwise agreed in writing, Seller shall provide keys and/or means to operate all locks, mailboxes,
security systems, alarms and garage door openers. If Property is a condominium or located in a common interest subdivision,
Buyer may be required to pay a deposit to the Homeowners’ Association (“HOA”) to obtain keys to accessible HOA facilities.
ALLOCATION OF COSTS (If checked): Unless otherwise specified here, this paragraph only determines who is to pay for the report,
inspection, test or service mentioned. If not specified here or elsewhere in this Agreement, the determination of who is to pay for any
work recommended or identified by any such report, inspection, test or service shall be by the method specified in paragraph 14B(2).
A. WOOD DESTROYING PEST INSPECTION:
(1) ■ Buyer ■ Seller shall pay for an inspection and report for wood destroying pests and organisms (“Report”) which shall be
prepared by ____________________________________________________________, a registered structural pest
control company. The Report shall cover the accessible areas of the main building and attached structures and, if
checked: ■ detached garages and carports, ■ detached decks, ■ the following other structures or areas
____________________ ___________________________________________________________. The Report shall
not include roof coverings. If Property is a condominium or located in a common interest subdivision, the Report shall
include only the separate interest and any exclusive-use areas being transferred and shall not include common areas,
unless otherwise agreed. Water tests of shower pans on upper level units may not be performed without consent of the
owners of property below the shower.
OR (2) ■ (If checked) The attached addendum (C.A.R. Form WPA) regarding wood destroying pest inspection and allocation of
cost is incorporated into this Agreement.
B. OTHER INSPECTIONS AND REPORTS:
(1) ■ Buyer ■ Seller shall pay to have septic or private sewage disposal systems inspected __________________________.
(2) ■ Buyer ■ Seller shall pay to have domestic wells tested for water potability and productivity _______________________.
(3) ■ Buyer ■ Seller shall pay for a natural hazard zone disclosure report prepared by _______________________________.
(4) ■ Buyer ■ Seller shall pay for the following inspection or report ______________________________________________.
(5) ■ Buyer ■ Seller shall pay for the following inspection or report _____________________________________________.
C. GOVERNMENT REQUIREMENTS AND RETROFIT:
(1) ■ Buyer ■ Seller shall pay for smoke detector installation and/or water heater bracing, if required by Law. Prior to Close Of
Escrow, Seller shall provide Buyer a written statement of compliance in accordance with state and local Law, unless
exempt.
(2) ■ Buyer ■ Seller shall pay the cost of compliance with any other minimum mandatory government retrofit standards,
inspections and reports if required as a condition of closing escrow under any Law. _____________________________.
D. ESCROW AND TITLE:
(1) ■ Buyer ■ Seller shall pay escrow fee _________________________________________________________________.
Escrow Holder shall be _____________________________________________________________________________.
(2) ■ Buyer ■ Seller shall pay for owner’s title insurance policy specified in paragraph 12E __________________________.
Owner’s title policy to be issued by ____________________________________________________________________.
(Buyer shall pay for any title insurance policy insuring Buyer’s lender, unless otherwise agreed in writing.)
OTHER COSTS:
(1) ■ Buyer ■ Seller shall pay County transfer tax or transfer fee _______________________________________________.
(2) ■ Buyer ■ Seller shall pay City transfer tax or transfer fee __________________________________________________.
(3) ■ Buyer ■ Seller shall pay HOA transfer fee _____________________________________________________________.
(4) ■ Buyer ■ Seller shall pay HOA document preparation fees ________________________________________________.
(5) ■ Buyer ■ Seller shall pay the cost, not to exceed $ ___________________________, of a one-year home warranty plan,
issued by ______________________________________________________________________________________,
with the following optional coverage: ___________________________________________________________________.
(6) ■ Buyer ■ Seller shall pay for________________________________________________________________________.
(7) ■ Buyer ■ Seller shall pay for________________________________________________________________________.
STATUTORY DISCLOSURES (INCLUDING LEAD-BASED PAINT HAZARD DISCLOSURES) AND CANCELLATION RIGHTS:
A. (1) Seller shall, within the time specified in paragraph 14A, deliver to Buyer, if required by Law: (i) Federal Lead-Based Paint
Disclosures and pamphlet (“Lead Disclosures”); and (ii) disclosures or notices required by sections 1102 et. seq. and 1103 et. seq.
of the California Civil Code (“Statutory Disclosures”). Statutory Disclosures include, but are not limited to, a Real Estate
Transfer Disclosure Statement (“TDS”), Natural Hazard Disclosure Statement (“NHD”), notice or actual knowledge of
release of illegal controlled substance, notice of special tax and/or assessments (or, if allowed, substantially equivalent
notice regarding the Mello-Roos Community Facilities Act and Improvement Bond Act of 1915) and, if Seller has actual
knowledge, an industrial use and military ordnance location disclosure (C.A.R. Form SSD).
(2) Buyer shall, within the time specified in paragraph 14B(1), return Signed Copies of the Statutory and Lead Disclosures to Seller.
(3) In the event Seller, prior to Close Of Escrow, becomes aware of adverse conditions materially affecting the Property, or any
material inaccuracy in disclosures, information or representations previously provided to Buyer of which Buyer is otherwise
unaware, Seller shall promptly provide a subsequent or amended disclosure or notice, in writing, covering those items.
However, a subsequent or amended disclosure shall not be required for conditions and material inaccuracies
disclosed in reports ordered and paid for by Buyer.
C.
E.
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4.
Buyer’s Initials (__________)(__________)
Seller’s Initials (__________)(__________)
Copyright © 1991-2002, CALIFORNIA ASSOCIATION OF REALTORS®, INC.
RPA-CA REVISED 10/02 (PAGE 2 OF 8)
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6.
Date: _________________
(4) If any disclosure or notice specified in 5A(1), or subsequent or amended disclosure or notice is delivered to Buyer after the
offer is Signed, Buyer shall have the right to cancel this Agreement within 3 Days After delivery in person, or 5 Days After
delivery by deposit in the mail, by giving written notice of cancellation to Seller or Seller's agent. (Lead Disclosures sent by
mail must be sent certified mail or better.)
(5) Note to Buyer and Seller: Waiver of Statutory and Lead Disclosures is prohibited by Law.
B. NATURAL AND ENVIRONMENTAL HAZARDS: Within the time specified in paragraph 14A, Seller shall, if required by Law:
(i) deliver to Buyer earthquake guides (and questionnaire) and environmental hazards booklet; (ii) even if exempt from the
obligation to provide a NHD, disclose if the Property is located in a Special Flood Hazard Area; Potential Flooding (Inundation)
Area; Very High Fire Hazard Zone; State Fire Responsibility Area; Earthquake Fault Zone; Seismic Hazard Zone; and (iii)
disclose any other zone as required by Law and provide any other information required for those zones.
C. DATA BASE DISCLOSURE: NOTICE: The California Department of Justice, sheriff’s departments, police departments serving
jurisdictions of 200,000 or more and many other local law enforcement authorities maintain for public access a data base of the
locations of persons required to register pursuant to paragraph (1) of subdivision (a) of Section 290.4 of the Penal Code. The
data base is updated on a quarterly basis and a source of information about the presence of these individuals in any
neighborhood. The Department of Justice also maintains a Sex Offender Identification Line through which inquiries about
individuals may be made. This is a “900” telephone service. Callers must have specific information about individuals they are
checking. Information regarding neighborhoods is not available through the “900” telephone service.
CONDOMINIUM/PLANNED UNIT DEVELOPMENT DISCLOSURES:
A. SELLER HAS: 7 (or ■ ______) Days After Acceptance to disclose to Buyer whether the Property is a condominium, or is
located in a planned unit development or other common interest subdivision.
B. If the Property is a condominium or is located in a planned unit development or other common interest subdivision, Seller
has 3 (or ■ ______) Days After Acceptance to request from the HOA (C.A.R. Form HOA): (i) Copies of any documents
required by Law; (ii) disclosure of any pending or anticipated claim or litigation by or against the HOA; (iii) a statement
containing the location and number of designated parking and storage spaces; (iv) Copies of the most recent 12 months of
HOA minutes for regular and special meetings; and (v) the names and contact information of all HOAs governing the Property
(collectively, “CI Disclosures”). Seller shall itemize and deliver to Buyer all CI Disclosures received from the HOA and any CI
Disclosures in Seller’s possession. Buyer’s approval of CI Disclosures is a contingency of this Agreement as specified in
paragraph 14B(3).
CONDITIONS AFFECTING PROPERTY:
A. Unless otherwise agreed: (i) the Property is sold (a) in its PRESENT physical condition as of the date of Acceptance and
(b) subject to Buyer’s Investigation rights; (ii) the Property, including pool, spa, landscaping and grounds, is to be
maintained in substantially the same condition as on the date of Acceptance; and (iii) all debris and personal property not
included in the sale shall be removed by Close Of Escrow.
B. SELLER SHALL, within the time specified in paragraph 14A, DISCLOSE KNOWN MATERIAL FACTS AND DEFECTS
affecting the Property, including known insurance claims within the past five years, AND MAKE OTHER DISCLOSURES
REQUIRED BY LAW.
C. NOTE TO BUYER: You are strongly advised to conduct investigations of the entire Property in order to determine its
present condition since Seller may not be aware of all defects affecting the Property or other factors that you consider
important. Property improvements may not be built according to code, in compliance with current Law, or have had
permits issued.
D. NOTE TO SELLER: Buyer has the right to inspect the Property and, as specified in paragraph 14B, based upon
information discovered in those inspections: (i) cancel this Agreement; or (ii) request that you make Repairs or take
other action.
ITEMS INCLUDED AND EXCLUDED:
A. NOTE TO BUYER AND SELLER: Items listed as included or excluded in the MLS, flyers or marketing materials are not
included in the purchase price or excluded from the sale unless specified in 8B or C.
B. ITEMS INCLUDED IN SALE:
(1) All EXISTING fixtures and fittings that are attached to the Property;
(2) Existing electrical, mechanical, lighting, plumbing and heating fixtures, ceiling fans, fireplace inserts, gas logs and grates,
solar systems, built-in appliances, window and door screens, awnings, shutters, window coverings, attached floor coverings,
television antennas, satellite dishes, private integrated telephone systems, air coolers/conditioners, pool/spa equipment,
garage door openers/remote controls, mailbox, in-ground landscaping, trees/shrubs, water softeners, water purifiers,
security systems/alarms; and
(3) The following items: ________________________________________________________________________________
__________________________________________________________________________________________________.
(4) Seller represents that all items included in the purchase price, unless otherwise specified, are owned by Seller.
(5) All items included shall be transferred free of liens and without Seller warranty.
C. ITEMS EXCLUDED FROM SALE: ________________________________________________________________________
____________________________________________________________________________________________________.
BUYER’S INVESTIGATION OF PROPERTY AND MATTERS AFFECTING PROPERTY:
A. Buyer’s acceptance of the condition of, and any other matter affecting the Property, is a contingency of this Agreement as
specified in this paragraph and paragraph 14B. Within the time specified in paragraph 14B(1), Buyer shall have the right, at
Buyer's expense unless otherwise agreed, to conduct inspections, investigations, tests, surveys and other studies (“Buyer
Investigations”), including, but not limited to, the right to: (i) inspect for lead-based paint and other lead-based paint hazards;
(ii) inspect for wood destroying pests and organisms; (iii) review the registered sex offender database; (iv) confirm the
insurability of Buyer and the Property; and (v) satisfy Buyer as to any matter specified in the attached Buyer’s Inspection
Advisory (C.A.R. Form BIA). Without Seller’s prior written consent, Buyer shall neither make nor cause to be made: (i) invasive
or destructive Buyer Investigations; or (ii) inspections by any governmental building or zoning inspector or government
employee, unless required by Law.
B. Buyer shall complete Buyer Investigations and, as specified in paragraph 14B, remove the contingency or cancel this
Agreement. Buyer shall give Seller, at no cost, complete Copies of all Buyer Investigation reports obtained by Buyer. Seller
shall make the Property available for all Buyer Investigations. Seller shall have water, gas, electricity and all operable pilot lights
on for Buyer's Investigations and through the date possession is made available to Buyer.
Buyer’s Initials (__________)(__________)
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10. REPAIRS: Repairs shall be completed prior to final verification of condition unless otherwise agreed in writing. Repairs to be
performed at Seller’s expense may be performed by Seller or through others, provided that the work complies with applicable Law,
including governmental permit, inspection and approval requirements. Repairs shall be performed in a good, skillful manner with
materials of quality and appearance comparable to existing materials. It is understood that exact restoration of appearance or cosmetic
items following all Repairs may not be possible. Seller shall: (i) obtain receipts for Repairs performed by others; (ii) prepare a written
statement indicating the Repairs performed by Seller and the date of such Repairs; and (iii) provide Copies of receipts and statements
to Buyer prior to final verification of condition.
11. BUYER INDEMNITY AND SELLER PROTECTION FOR ENTRY UPON PROPERTY: Buyer shall: (i) keep the Property free and
clear of liens; (ii) Repair all damage arising from Buyer Investigations; and (iii) indemnify and hold Seller harmless from all resulting
liability, claims, demands, damages and costs. Buyer shall carry, or Buyer shall require anyone acting on Buyer’s behalf to carry,
policies of liability, workers’ compensation and other applicable insurance, defending and protecting Seller from liability for any injuries
to persons or property occurring during any Buyer Investigations or work done on the Property at Buyer’s direction prior to Close Of
Escrow. Seller is advised that certain protections may be afforded Seller by recording a “Notice of Non-responsibility” (C.A.R. Form
NNR) for Buyer Investigations and work done on the Property at Buyer’s direction. Buyer’s obligations under this paragraph shall
survive the termination of this Agreement.
12. TITLE AND VESTING:
A. Within the time specified in paragraph 14, Buyer shall be provided a current preliminary (title) report, which is only an offer by
the title insurer to issue a policy of title insurance and may not contain every item affecting title. Buyer’s review of the preliminary
report and any other matters which may affect title are a contingency of this Agreement as specified in paragraph 14B.
B. Title is taken in its present condition subject to all encumbrances, easements, covenants, conditions, restrictions, rights and
other matters, whether of record or not, as of the date of Acceptance except: (i) monetary liens of record unless Buyer is
assuming those obligations or taking the Property subject to those obligations; and (ii) those matters which Seller has agreed
to remove in writing.
C. Within the time specified in paragraph 14A, Seller has a duty to disclose to Buyer all matters known to Seller affecting title,
whether of record or not.
D. At Close Of Escrow, Buyer shall receive a grant deed conveying title (or, for stock cooperative or long-term lease, an
assignment of stock certificate or of Seller’s leasehold interest), including oil, mineral and water rights if currently owned by
Seller. Title shall vest as designated in Buyer's supplemental escrow instructions. THE MANNER OF TAKING TITLE MAY
HAVE SIGNIFICANT LEGAL AND TAX CONSEQUENCES. CONSULT AN APPROPRIATE PROFESSIONAL.
E. Buyer shall receive a CLTA/ALTA Homeowner’s Policy of Title Insurance. A title company, at Buyer's request, can provide
information about the availability, desirability, coverage, and cost of various title insurance coverages and endorsements. If
Buyer desires title coverage other than that required by this paragraph, Buyer shall instruct Escrow Holder in writing and pay
any increase in cost.
13. SALE OF BUYER’S PROPERTY:
A. This Agreement is NOT contingent upon the sale of any property owned by Buyer.
OR B. ■ (If checked): The attached addendum (C.A.R. Form COP) regarding the contingency for the sale of property owned by
Buyer is incorporated into this Agreement.
14. TIME PERIODS; REMOVAL OF CONTINGENCIES; CANCELLATION RIGHTS: The following time periods may only be
extended, altered, modified or changed by mutual written agreement. Any removal of contingencies or cancellation under
this paragraph must be in writing (C.A.R. Form RRCR).
A. SELLER HAS: 7 (or ■ ______) Days After Acceptance to deliver to Buyer all reports, disclosures and information for which
Seller is responsible under paragraphs 4, 5A and B, 6A, 7B and 12.
B. (1) BUYER HAS: 17 (or ■ ______) Days After Acceptance, unless otherwise agreed in writing, to:
(i) complete all Buyer Investigations; approve all disclosures, reports and other applicable information, which Buyer receives
from Seller; and approve all matters affecting the Property (including lead-based paint and lead-based paint hazards as well
as other information specified in paragraph 5 and insurability of Buyer and the Property); and
(ii) return to Seller Signed Copies of Statutory and Lead Disclosures delivered by Seller in accordance with paragraph 5A.
(2) Within the time specified in 14B(1), Buyer may request that Seller make repairs or take any other action regarding the
Property (C.A.R. Form RR). Seller has no obligation to agree to or respond to Buyer’s requests.
(3) By the end of the time specified in 14B(1) (or 2I for loan contingency or 2J for appraisal contingency), Buyer shall, in writing,
remove the applicable contingency (C.A.R. Form RRCR) or cancel this Agreement. However, if the following inspections,
reports or disclosures are not made within the time specified in 14A, then Buyer has 5 (or ■ ______) Days after receipt of
any such items, or the time specified in 14B(1), whichever is later, to remove the applicable contingency or cancel this
Agreement in writing: (i) government-mandated inspections or reports required as a condition of closing; or (ii) Common
Interest Disclosures pursuant to paragraph 6B.
C. CONTINUATION OF CONTINGENCY OR CONTRACTUAL OBLIGATION; SELLER RIGHT TO CANCEL:
(1) Seller right to Cancel; Buyer Contingencies: Seller, after first giving Buyer a Notice to Buyer to Perform (as specified
below), may cancel this Agreement in writing and authorize return of Buyer's deposit if, by the time specified in this
Agreement, Buyer does not remove in writing the applicable contingency or cancel this Agreement. Once all contingencies
have been removed, failure of either Buyer or Seller to close escrow on time may be a breach of this Agreement.
(2) Continuation of Contingency: Even after the expiration of the time specified in 14B(1), Buyer retains the right to make
requests to Seller, remove in writing the applicable contingency or cancel this Agreement until Seller cancels pursuant to 14C(1).
Once Seller receives Buyer’s written removal of all contingencies, Seller may not cancel this Agreement pursuant to 14C(1).
(3) Seller right to Cancel; Buyer Contract Obligations: Seller, after first giving Buyer a Notice to Buyer to Perform (as
specified below), may cancel this Agreement in writing and authorize return of Buyer's deposit for any of the following
reasons: (i) if Buyer fails to deposit funds as required by 2A or 2B; (ii) if the funds deposited pursuant to 2A or 2B are not
good when deposited; (iii) if Buyer fails to provide a letter as required by 2G; (iv) if Buyer fails to provide verification as
required by 2H or 2L; (v) if Seller reasonably disapproves of the verification provided by 2H or 2L; (vi) if Buyer fails to return
Statutory and Lead Disclosures as required by paragraph 5A(2); or (vii) if Buyer fails to sign or initial a separate liquidated
damage form for an increased deposit as required by paragraph 16. Seller is not required to give Buyer a Notice to
Perform regarding Close of Escrow.
(4) Notice To Buyer To Perform: The Notice to Buyer to Perform (C.A.R. Form NBP) shall: (i) be in writing; (ii) be signed by
Seller; and (iii) give Buyer at least 24 (or ■ _____) hours (or until the time specified in the applicable paragraph, whichever
occurs last) to take the applicable action. A Notice to Buyer to Perform may not be given any earlier than 2 Days Prior to the
expiration of the applicable time for Buyer to remove a contingency or cancel this Agreement or meet a 14C(3) obligation.
Buyer’s Initials (__________)(__________)
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EFFECT OF BUYER’S REMOVAL OF CONTINGENCIES : If Buyer removes, in writing, any contingency or cancellation rights,
unless otherwise specified in a separate written agreement between Buyer and Seller, Buyer shall conclusively be deemed to
have: (i) completed all Buyer Investigations, and review of reports and other applicable information and disclosures pertaining
to that contingency or cancellation right; (ii) elected to proceed with the transaction; and (iii) assumed all liability, responsibility
and expense for Repairs or corrections pertaining to that contingency or cancellation right, or for inability to obtain financing.
E. EFFECT OF CANCELLATION ON DEPOSITS: If Buyer or Seller gives written notice of cancellation pursuant to rights duly
exercised under the terms of this Agreement, Buyer and Seller agree to Sign mutual instructions to cancel the sale and escrow
and release deposits, less fees and costs, to the party entitled to the funds. Fees and costs may be payable to service providers
and vendors for services and products provided during escrow. Release of funds will require mutual Signed release
instructions from Buyer and Seller, judicial decision or arbitration award. A party may be subject to a civil penalty
of up to $1,000 for refusal to sign such instructions if no good faith dispute exists as to who is entitled to the
deposited funds (Civil Code §1057.3).
15. FINAL VERIFICATION OF CONDITION: Buyer shall have the right to make a final inspection of the Property within 5 (or
____________) Days Prior to Close Of Escrow, NOT AS A CONTINGENCY OF THE SALE, but solely to confirm: (i) the Property
is maintained pursuant to paragraph 7A; (ii) Repairs have been completed as agreed; and (iii) Seller has complied with Seller’s
other obligations under this Agreement.
16. LIQUIDATED DAMAGES: If Buyer fails to complete this purchase because of Buyer’s default, Seller shall
retain, as liquidated damages, the deposit actually paid. If the Property is a dwelling with no more than four
units, one of which Buyer intends to occupy, then the amount retained shall be no more than 3% of the
purchase price. Any excess shall be returned to Buyer. Release of funds will require mutual, Signed release
instructions from both Buyer and Seller, judicial decision or arbitration award.
BUYER AND SELLER SHALL SIGN A SEPARATE LIQUIDATED DAMAGES PROVISION FOR ANY INCREASED
DEPOSIT. (C.A.R. FORM RID)
Buyer's Initials ______/______
Seller's Initials
_______/_______
17. DISPUTE RESOLUTION:
A. MEDIATION: Buyer and Seller agree to mediate any dispute or claim arising between them out of this Agreement, or any
resulting transaction, before resorting to arbitration or court action. Paragraphs 17B(2) and (3) below apply whether or not the
Arbitration provision is initialed. Mediation fees, if any, shall be divided equally among the parties involved. If, for any dispute
or claim to which this paragraph applies, any party commences an action without first attempting to resolve the matter through
mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees,
even if they would otherwise be available to that party in any such action. THIS MEDIATION PROVISION APPLIES WHETHER
OR NOT THE ARBITRATION PROVISION IS INITIALED.
B. ARBITRATION OF DISPUTES: (1) Buyer and Seller agree that any dispute or claim in Law or equity arising
between them out of this Agreement or any resulting transaction, which is not settled through mediation,
shall be decided by neutral, binding arbitration, including and subject to paragraphs 17B(2) and (3) below.
The arbitrator shall be a retired judge or justice, or an attorney with at least 5 years of residential real
estate Law experience, unless the parties mutually agree to a different arbitrator, who shall render an
award in accordance with substantive California Law. The parties shall have the right to discovery in
accordance with California Code of Civil Procedure §1283.05. In all other respects, the arbitration shall be
conducted in accordance with Title 9 of Part III of the California Code of Civil Procedure. Judgment upon
the award of the arbitrator(s) may be entered into any court having jurisdiction. Interpretation of this
agreement to arbitrate shall be governed by the Federal Arbitration Act.
(2) EXCLUSIONS FROM MEDIATION AND ARBITRATION: The following matters are excluded from mediation and
arbitration: (i) a judicial or non-judicial foreclosure or other action or proceeding to enforce a deed of trust, mortgage
or installment land sale contract as defined in California Civil Code §2985; (ii) an unlawful detainer action; (iii) the filing
or enforcement of a mechanic's lien; and (iv) any matter that is within the jurisdiction of a probate, small claims or
bankruptcy court. The filing of a court action to enable the recording of a notice of pending action, for order of
attachment, receivership, injunction, or other provisional remedies, shall not constitute a waiver of the mediation and
arbitration provisions.
(3) BROKERS: Buyer and Seller agree to mediate and arbitrate disputes or claims involving either or both Brokers,
consistent with 17A and B, provided either or both Brokers shall have agreed to such mediation or arbitration prior to,
or within a reasonable time after, the dispute or claim is presented to Brokers. Any election by either or both Brokers
to participate in mediation or arbitration shall not result in Brokers being deemed parties to the Agreement.
“NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING
OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION DECIDED BY
NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS
YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN
THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL,
UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE ‘ARBITRATION OF DISPUTES’
PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU
MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.”
“WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT
OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION TO NEUTRAL ARBITRATION.”
Buyer's Initials ______/______
Seller's Initials
_______/_______
Buyer’s Initials (__________)(__________)
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18. PRORATIONS OF PROPERTY TAXES AND OTHER ITEMS: Unless otherwise agreed in writing, the following items shall
be PAID CURRENT and prorated between Buyer and Seller as of Close Of Escrow: real property taxes and assessments,
interest, rents, HOA regular, special, and emergency dues and assessments imposed prior to Close Of Escrow, premiums
on insurance assumed by Buyer, payments on bonds and assessments assumed by Buyer, and payments on Mello-Roos
and other Special Assessment District bonds and assessments that are now a lien. The following items shall be assumed by
Buyer WITHOUT CREDIT toward the purchase price: prorated payments on Mello-Roos and other Special Assessment
District bonds and assessments and HOA special assessments that are now a lien but not yet due. Property will be
reassessed upon change of ownership. Any supplemental tax bills shall be paid as follows: (i) for periods after Close Of
Escrow, by Buyer; and (ii) for periods prior to Close Of Escrow, by Seller. TAX BILLS ISSUED AFTER CLOSE OF
ESCROW SHALL BE HANDLED DIRECTLY BETWEEN BUYER AND SELLER. Prorations shall be made based on a
30-day month.
19. WITHHOLDING TAXES: Seller and Buyer agree to execute any instrument, affidavit, statement or instruction reasonably
necessary to comply with federal (FIRPTA) and California withholding Law, if required (C.A.R. Forms AS and AB).
20. MULTIPLE LISTING SERVICE (“MLS”): Brokers are authorized to report to the MLS a pending sale and, upon Close Of
Escrow, the terms of this transaction to be published and disseminated to persons and entities authorized to use the
information on terms approved by the MLS.
21. EQUAL HOUSING OPPORTUNITY: The Property is sold in compliance with federal, state and local anti-discrimination Laws.
22. ATTORNEY FEES: In any action, proceeding, or arbitration between Buyer and Seller arising out of this Agreement, the
prevailing Buyer or Seller shall be entitled to reasonable attorney fees and costs from the non-prevailing Buyer or Seller,
except as provided in paragraph 17A.
23. SELECTION OF SERVICE PROVIDERS: If Brokers refer Buyer or Seller to persons, vendors, or service or product providers
(“Providers”), Brokers do not guarantee the performance of any Providers. Buyer and Seller may select ANY Providers of
their own choosing.
24. TIME OF ESSENCE; ENTIRE CONTRACT; CHANGES: Time is of the essence. All understandings between the parties are
incorporated in this Agreement. Its terms are intended by the parties as a final, complete and exclusive expression of their
Agreement with respect to its subject matter, and may not be contradicted by evidence of any prior agreement or
contemporaneous oral agreement. If any provision of this Agreement is held to be ineffective or invalid, the remaining
provisions will nevertheless be given full force and effect. Neither this Agreement nor any provision in it may be
extended, amended, modified, altered or changed, except in writing Signed by Buyer and Seller.
25. OTHER TERMS AND CONDITIONS, including attached supplements:
✓ Buyer’s
■
Inspection Advisory (C.A.R. Form BIA)
A. __
________________________________________________________________________________________________________
■ Purchase Agreement Addendum (C.A.R. Form PAA paragraph numbers:
)
B. _____________________________________________________________________
___________________________________
C. _____________________________________________________________________________________________________
_____________________________________________________________________________________________________
_____________________________________________________________________________________________________
26. DEFINITIONS: As used in this Agreement:
A. “Acceptance” means the time the offer or final counter offer is accepted in writing by a party and is delivered to and
personally received by the other party or that party’s authorized agent in accordance with the terms of this offer or a final
counter offer.
B. “Agreement” means the terms and conditions of this accepted California Residential Purchase Agreement and any
accepted counter offers and addenda.
C. “C.A.R. Form” means the specific form referenced or another comparable form agreed to by the parties.
D. “Close Of Escrow” means the date the grant deed, or other evidence of transfer of title, is recorded. If the scheduled
close of escrow falls on a Saturday, Sunday or legal holiday, then close of escrow shall be the next business day after
the scheduled close of escrow date.
E. “Copy” means copy by any means including photocopy, NCR, facsimile and electronic.
F. “Days” means calendar days, unless otherwise required by Law.
G. “Days After” means the specified number of calendar days after the occurrence of the event specified, not counting the
calendar date on which the specified event occurs, and ending at 11:59PM on the final day.
H. “Days Prior” means the specified number of calendar days before the occurrence of the event specified, not counting
the calendar date on which the specified event is scheduled to occur.
I. “Electronic Copy” or “Electronic Signature” means, as applicable, an electronic copy or signature complying with
California Law. Buyer and Seller agree that electronic means will not be used by either party to modify or alter the content
or integrity of this Agreement without the knowledge and consent of the other.
J. “Law” means any law, code, statute, ordinance, regulation, rule or order, which is adopted by a controlling city, county,
state or federal legislative, judicial or executive body or agency.
K. “Notice to Buyer to Perform” means a document (C.A.R. Form NBP), which shall be in writing and Signed by Seller
and shall give Buyer at least 24 hours (or as otherwise specified in paragraph 14C(4)) to remove a contingency or
perform as applicable.
L. “Repairs” means any repairs (including pest control), alterations, replacements, modifications or retrofitting of the
Property provided for under this Agreement.
M. “Signed” means either a handwritten or electronic signature on an original document, Copy or any counterpart.
N. Singular and Plural terms each include the other, when appropriate.
Buyer’s Initials (__________)(__________)
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27. AGENCY:
A. DISCLOSURE: Buyer and Seller each acknowledge prior receipt of C.A.R. Form AD “Disclosure Regarding Real
Estate Agency Relationships.”
B. POTENTIALLY COMPETING BUYERS AND SELLERS: Buyer and Seller each acknowledge receipt of a
disclosure of the possibility of multiple representation by the Broker representing that principal. This disclosure
may be part of a listing agreement, buyer-broker agreement or separate document (C.A.R. Form DA). Buyer
understands that Broker representing Buyer may also represent other potential buyers, who may consider, make
offers on or ultimately acquire the Property. Seller understands that Broker representing Seller may also represent
other sellers with competing properties of interest to this Buyer.
C. CONFIRMATION: The following agency relationships are hereby confirmed for this transaction:
Listing Agent _____________________________________________________ (Print Firm Name) is the agent
of (check one): ■ the Seller exclusively; or ■ both the Buyer and Seller.
Selling Agent _______________________________________________________(Print Firm Name) (if not same
as Listing Agent) is the agent of (check one): ■ the Buyer exclusively; or ■ the Seller exclusively; or ■ both the
Buyer and Seller. Real Estate Brokers are not parties to the Agreement between Buyer and Seller.
28. JOINT ESCROW INSTRUCTIONS TO ESCROW HOLDER:
A. The following paragraphs, or applicable portions thereof, of this Agreement constitute the joint escrow
instructions of Buyer and Seller to Escrow Holder, which Escrow Holder is to use along with any related
counter offers and addenda, and any additional mutual instructions to close the escrow: 1, 2, 4, 12, 13B, 14E, 18,
19, 24, 25B and C, 26, 28, 29, 32A, 33 and paragraph D of the section titled Real Estate Brokers on page 8. If a
Copy of the separate compensation agreement(s) provided for in paragraph 29 or 32A, or paragraph D of the
section titled Real Estate Brokers on page 8 is deposited with Escrow Holder by Broker, Escrow Holder shall
accept such agreement(s) and pay out from Buyer’s or Seller’s funds, or both, as applicable, the Broker’s
compensation provided for in such agreement(s). The terms and conditions of this Agreement not set forth in the
specified paragraphs are additional matters for the information of Escrow Holder, but about which Escrow Holder
need not be concerned. Buyer and Seller will receive Escrow Holder’s general provisions directly from Escrow
Holder and will execute such provisions upon Escrow Holder’s request. To the extent the general provisions are
inconsistent or conflict with this Agreement, the general provisions will control as to the duties and obligations of
Escrow Holder only. Buyer and Seller will execute additional instructions, documents and forms provided by
Escrow Holder that are reasonably necessary to close the escrow.
B. A Copy of this Agreement shall be delivered to Escrow Holder within 3 business days after Acceptance
(or ■ ______________________________________________________). Buyer and Seller authorize Escrow
Holder to accept and rely on Copies and Signatures as defined in this Agreement as originals, to open escrow and
for other purposes of escrow. The validity of this Agreement as between Buyer and Seller is not affected by
whether or when Escrow Holder Signs this Agreement.
C. Brokers are a party to the escrow for the sole purpose of compensation pursuant to paragraphs 29, 32A and
paragraph D of the section titled Real Estate Brokers on page 8. Buyer and Seller irrevocably assign to Brokers
compensation specified in paragraphs 29 and 32A, respectively, and irrevocably instruct Escrow Holder to
disburse those funds to Brokers at Close Of Escrow or pursuant to any other mutually executed cancellation
agreement. Compensation instructions can be amended or revoked only with the written consent of Brokers.
Escrow Holder shall immediately notify Brokers: (i) if Buyer’s initial or any additional deposit is not made pursuant
to this Agreement, or is not good at time of deposit with Escrow Holder; or (ii) if Buyer and Seller instruct Escrow
Holder to cancel escrow.
D. A Copy of any amendment that affects any paragraph of this Agreement for which Escrow Holder is responsible
shall be delivered to Escrow Holder within 2 business days after mutual execution of the amendment.
29. BROKER COMPENSATION FROM BUYER: If applicable, upon Close Of Escrow, Buyer agrees to pay compensation
to Broker as specified in a separate written agreement between Buyer and Broker.
30. TERMS AND CONDITIONS OF OFFER:
This is an offer to purchase the Property on the above terms and conditions. All paragraphs with spaces for initials
by Buyer and Seller are incorporated in this Agreement only if initialed by all parties. If at least one but not all parties
initial, a counter offer is required until agreement is reached. Seller has the right to continue to offer the Property
for sale and to accept any other offer at any time prior to notification of Acceptance. Buyer has read and
acknowledges receipt of a Copy of the offer and agrees to the above confirmation of agency relationships. If this
offer is accepted and Buyer subsequently defaults, Buyer may be responsible for payment of Brokers'
compensation. This Agreement and any supplement, addendum or modification, including any Copy, may be
Signed in two or more counterparts, all of which shall constitute one and the same writing.
Buyer’s Initials (__________)(__________)
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Property Address: ______________________________________________________
Date: _________________
31. EXPIRATION OF OFFER: This offer shall be deemed revoked and the deposit shall be returned unless the offer is Signed by Seller
and a Copy of the Signed offer is personally received by Buyer, or by _____________________________________, who is
authorized to receive it by 5:00 PM on the third calendar day after this offer is signed by Buyer (or, if checked, ■ by
_________________________________________________________________ (date), at _______________________ AM/PM).
Date _______________________________________________ Date __________________________________________________
BUYER _____________________________________________ BUYER _______________________________________________
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____________________________________________________ ______________________________________________________
(Print name)
(Print name)
___________________________________________________________________________________________________________
(Address)
32. BROKER COMPENSATION FROM SELLER:
A. Upon Close Of Escrow, Seller agrees to pay compensation to Broker as specified in a separate written agreement between
Seller and Broker.
B. If escrow does not close, compensation is payable as specified in that separate written agreement.
33. ACCEPTANCE OF OFFER: Seller warrants that Seller is the owner of the Property, or has the authority to execute this Agreement.
Seller accepts the above offer, agrees to sell the Property on the above terms and conditions, and agrees to the above confirmation
of agency relationships. Seller has read and acknowledges receipt of a Copy of this Agreement, and authorizes Broker to deliver a
Signed Copy to Buyer.
■ (If checked) SUBJECT TO ATTACHED COUNTER OFFER, DATED _______________________________________________.
Date _______________________________________________
Date __________________________________________________
SELLER _____________________________________________ SELLER ______________________________________________
____________________________________________________ ______________________________________________________
(Print name)
(Print name)
___________________________________________________________________________________________________________
(Address)
(_____/_____) CONFIRMATION OF ACCEPTANCE: A Copy of Signed Acceptance was personally received by Buyer or Buyer’s authorized
agent on (date) __________________________________ at _________ AM/PM. A binding Agreement is created when
(Initials)
a Copy of Signed Acceptance is personally received by Buyer or Buyer’s authorized agent whether or not
confirmed in this document. Completion of this confirmation is not legally required in order to create a binding
Agreement; it is solely intended to evidence the date that Confirmation of Acceptance has occurred.
REAL ESTATE BROKERS:
A. Real Estate Brokers are not parties to the Agreement between Buyer and Seller.
B. Agency relationships are confirmed as stated in paragraph 27.
C. If specified in paragraph 2A, Agent who submitted the offer for Buyer acknowledges receipt of deposit.
D. COOPERATING BROKER COMPENSATION: Listing Broker agrees to pay Cooperating Broker (Selling Firm) and Cooperating
Broker agrees to accept, out of Listing Broker’s proceeds in escrow: (i) the amount specified in the MLS, provided Cooperating
Broker is a Participant of the MLS in which the Property is offered for sale or a reciprocal MLS; or (ii) ■ (if checked) the amount
specified in a separate written agreement (C.A.R. Form CBC) between Listing Broker and Cooperating Broker.
Real Estate Broker (Selling Firm) _______________________________________________________________________________
By ____________________________________________________________________________ Date _________________________
Address ___________________________________________City _________________________State ________ Zip ___________
Telephone _______________________ Fax _______________________________ E-mail ____________________________________
Real Estate Broker (Listing Firm) _______________________________________________________________________________
By ____________________________________________________________________________ Date _______________________
Address ___________________________________________City _________________________State ________ Zip ___________
Telephone _______________________ Fax _______________________________ E-mail __________________________________
ESCROW HOLDER ACKNOWLEDGMENT:
Escrow Holder acknowledges receipt of a Copy of this Agreement, (if checked, ■ a deposit in the amount of $ ________________________________),
counter offer numbers _______________________________________________ and ___________________________________________________
___________________________________________________, and agrees to act as Escrow Holder subject to paragraph 28 of this Agreement, any
supplemental escrow instructions and the terms of Escrow Holder’s general provisions.
Escrow Holder is advised that the date of Confirmation of Acceptance of the Agreement as between Buyer and Seller is ________________________
Escrow Holder ________________________________________________________________ Escrow # ___________________________________
By __________________________________________________________________________ Date_______________________________________
Address ________________________________________________________________________________________________________________
Phone/Fax/E-mail_________________________________________________________________________________________________________
Escrow Holder is licensed by the California Department of ■ Corporations, ■ Insurance, ■ Real Estate. License # ____________________________
THIS FORM HAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR
ADEQUACY OF ANY PROVISION IN ANY SPECIFIC TRANSACTION. A REAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE
TRANSACTIONS. IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL.
This form is available for use by the entire real estate industry. It is not intended to identify the user as a REALTOR®. REALTOR® is a registered collective membership mark
which may be used only by members of the NATIONAL ASSOCIATION OF REALTORS® who subscribe to its Code of Ethics.
Published by the
California Association of REALTORS®
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CALIFORNIA
OF REALTORS®
BUYER’S INSPECTION ADVISORY
(C.A.R. Form BIA, Revised 10/02)
Property Address: __________________________________________________________________________________ (“Property”).
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A. IMPORTANCE OF PROPERTY INVESTIGATION: The physical condition of the land and improvements being purchased is not
guaranteed by either Seller or Brokers. For this reason, you should conduct thorough investigations of the Property personally and with
professionals who should provide written reports of their investigations. A general physical inspection typically does not cover all aspects
of the Property nor items affecting the Property that are not physically located on the Property. If the professionals recommend further
investigations, including a recommendation by a pest control operator to inspect inaccessible areas of the Property, you should contact
qualified experts to conduct such additional investigations.
B. BUYER RIGHTS AND DUTIES: You have an affirmative duty to exercise reasonable care to protect yourself, including discovery of
the legal, practical and technical implications of disclosed facts, and the investigation and verification of information and facts that you
know or that are within your diligent attention and observation. The purchase agreement gives you the right to investigate the Property.
If you exercise this right, and you should, you must do so in accordance with the terms of that agreement. This is the best way for you
to protect yourself. It is extremely important for you to read all written reports provided by professionals and to discuss the results of
inspections with the professional who conducted the inspection. You have the right to request that Seller make repairs, corrections or
take other action based upon items discovered in your investigations or disclosed by Seller. If Seller is unwilling or unable to satisfy your
requests, or you do not want to purchase the Property in its disclosed and discovered condition, you have the right to cancel the
agreement if you act within specific time periods. If you do not cancel the agreement in a timely and proper manner, you may be in
breach of contract.
C. SELLER RIGHTS AND DUTIES: Seller is required to disclose to you material facts known to him/her that affect the value or
desirability of the Property. However, Seller may not be aware of some Property defects or conditions. Seller does not have an obligation
to inspect the Property for your benefit nor is Seller obligated to repair, correct or otherwise cure known defects that are disclosed to you
or previously unknown defects that are discovered by you or your inspectors during escrow. The purchase agreement obligates Seller
to make the Property available to you for investigations.
D. BROKER OBLIGATIONS: Brokers do not have expertise in all areas and therefore cannot advise you on many items, such as soil
stability, geologic or environmental conditions, hazardous or illegal controlled substances, structural conditions of the foundation or other
improvements, or the condition of the roof, plumbing, heating, air conditioning, electrical, sewer, septic, waste disposal, or other system.
The only way to accurately determine the condition of the Property is through an inspection by an appropriate professional selected by
you. If Broker gives you referrals to such professionals, Broker does not guarantee their performance. You may select any professional
of your choosing. In sales involving residential dwellings with no more than four units, Brokers have a duty to make a diligent visual
inspection of the accessible areas of the Property and to disclose the results of that inspection. However, as some Property defects or
conditions may not be discoverable from a visual inspection, it is possible Brokers are not aware of them. If you have entered into a
written agreement with a Broker, the specific terms of that agreement will determine the nature and extent of that Broker’s duty to you.
YOU ARE STRONGLY ADVISED TO INVESTIGATE THE CONDITION AND SUITABILITY OF ALL ASPECTS OF THE PROPERTY.
IF YOU DO NOT DO SO, YOU ARE ACTING AGAINST THE ADVICE OF BROKERS.
E. YOU ARE ADVISED TO CONDUCT INVESTIGATIONS OF THE ENTIRE PROPERTY, INCLUDING, BUT NOT LIMITED TO THE FOLLOWING:
1. GENERAL CONDITION OF THE PROPERTY, ITS SYSTEMS AND COMPONENTS: Foundation, roof, plumbing, heating, air
conditioning, electrical, mechanical, security, pool/spa, other structural and non-structural systems and components, fixtures,
built-in appliances, any personal property included in the sale, and energy efficiency of the Property. (Structural engineers are
best suited to determine possible design or construction defects, and whether improvements are structurally sound.)
2. SQUARE FOOTAGE, AGE, BOUNDARIES: Square footage, room dimensions, lot size, age of improvements and boundaries.
Any numerical statements regarding these items are APPROXIMATIONS ONLY and have not been verified by Seller and cannot
be verified by Brokers. Fences, hedges, walls, retaining walls and other natural or constructed barriers or markers do not
necessarily identify true Property boundaries. (Professionals such as appraisers, architects, surveyors and civil engineers are
best suited to determine square footage, dimensions and boundaries of the Property.)
3. WOOD DESTROYING PESTS: Presence of, or conditions likely to lead to the presence of wood destroying pests and organisms
and other infestation or infection. Inspection reports covering these items can be separated into two sections: Section 1 identifies
areas where infestation or infection is evident. Section 2 identifies areas where there are conditions likely to lead to infestation
or infection. A registered structural pest control company is best suited to perform these inspections.
The copyright laws of the United States (Title 17 U.S. Code) forbid the
unauthorized reproduction of this form, or any portion thereof, by photocopy
machine or any other means, including facsimile or computerized formats.
Copyright © 1991-2002, CALIFORNIA ASSOCIATION OF REALTORS®,
INC. ALL RIGHTS RESERVED.
Buyer’s Initials (__________)(__________)
BIA REVISED 10/02 (PAGE 1 OF 2) Print Date
BUYER’S INSPECTION ADVISORY (BIA PAGE 1 OF 2)
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Date: _________________
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4. SOIL STABILITY: Existence of fill or compacted soil, expansive or contracting soil, susceptibility to slippage, settling or movement,
and the adequacy of drainage. (Geotechnical engineers are best suited to determine such conditions, causes and remedies.)
5. ROOF: Present condition, age, leaks, and remaining useful life. (Roofing contractors are best suited to determine these conditions.)
6. POOL/SPA: Cracks, leaks or operational problems. (Pool contractors are best suited to determine these conditions.)
7. WASTE DISPOSAL: Type, size, adequacy, capacity and condition of sewer and septic systems and components, connection to
sewer, and applicable fees.
8. WATER AND UTILITIES; WELL SYSTEMS AND COMPONENTS: Water and utility availability, use restrictions and costs. Water
quality, adequacy, condition, and performance of well systems and components.
9. ENVIRONMENTAL HAZARDS: Potential environmental hazards, including, but not limited to, asbestos, lead-based paint and
other lead contamination, radon, methane, other gases, fuel oil or chemical storage tanks, contaminated soil or water, hazardous
waste, waste disposal sites, electromagnetic fields, nuclear sources, and other substances, materials, products, or conditions
(including mold (airborne, toxic or otherwise), fungus or similar contaminants). (For more in formation on these items, you may
consult an appropriate professional or read the booklets “Environmental Hazards: A Guide for Homeowners ,Buyers, Landlords
and Tenants,” “Protect Your Family From Lead in Your Home” or both.)
10. EARTHQUAKES AND FLOODING: Susceptibility of the Property to earthquake/seismic hazards and propensity of the Property
to flood. (A Geologist or Geotechnical Engineer is best suited to provide information on these conditions.)
11. FIRE, HAZARD AND OTHER INSURANCE: The availability and cost of necessary or desired insurance may vary. The location
of the Property in a seismic, flood or fire hazard zone, and other conditions, such as the age of the Property and the claims history
of the Property and Buyer, may affect the availability and need for certain types of insurance. Buyer should explore insurance
options early as this information may affect other decisions, including the removal of loan and inspection contingencies. (An
insurance agent is best suited to provide information on these conditions.)
12. BUILDING PERMITS, ZONING AND GOVERNMENTAL REQUIREMENTS: Permits, inspections, certificates, zoning, other
governmental limitations, restrictions, and requirements affecting the current or future use of the Property, its development or size.
(Such information is available from appropriate governmental agencies and private information providers. Brokers are not
qualified to review or interpret any such information.)
13. RENTAL PROPERTY RESTRICTIONS: Some cities and counties impose restrictions that limit the amount of rent that can be
charged, the maximum number of occupants; and the right of a landlord to terminate a tenancy. Deadbolt or other locks and
security systems for doors and windows, including window bars, should be examined to determine whether they satisfy legal
requirements. (Government agencies can provide information about these restrictions and other requirements.)
14. SECURITY AND SAFETY: State and local Law may require the installation of barriers, access alarms, self-latching mechanisms
and/or other measures to decrease the risk to children and other persons of existing swimming pools and hot tubs, as well as
various fire safety and other measures concerning other features of the Property. Compliance requirements differ from city to city
and county to county. Unless specifically agreed, the Property may not be in compliance with these requirements. (Local
government agencies can provide information about these restrictions and other requirements.)
15. NEIGHBORHOOD, AREA, SUBDIVISION CONDITIONS; PERSONAL FACTORS: Neighborhood or area conditions, including
schools, proximity and adequacy of law enforcement, crime statistics, the proximity of registered felons or offenders, fire
protection, other government services, availability, adequacy and cost of any speed-wired, wireless internet connections or other
telecommunications or other technology services and installations, proximity to commercial, industrial or agricultural activities,
existing and proposed transportation, construction and development that may affect noise, view, or traffic, airport noise, noise or
odor from any source, wild and domestic animals, other nuisances, hazards, or circumstances, protected species, wetland
properties, botanical diseases, historic or other governmentally protected sites or improvements, cemeteries, facilities and
condition of common areas of common interest subdivisions, and possible lack of compliance with any governing documents or
Homeowners' Association requirements, conditions and influences of significance to certain cultures and/or religions, and
personal needs, requirements and preferences of Buyer.
Buyer and Seller acknowledge and agree that Broker: (i) Does not decide what price Buyer should pay or Seller should accept;
(ii) Does not guarantee the condition of the Property; (iii) Does not guarantee the performance, adequacy or completeness of
inspections, services, products or repairs provided or made by Seller or others; (iv) Shall not be responsible for identifying defects
that are not known to Broker and (a) are not visually observable in reasonably accessible areas of the Property; (b) are in common
areas; or (c) are off the site of the Property; (v) Shall not be responsible for inspecting public records or permits concerning the title
or use of Property; (vi) Shall not be responsible for identifying the location of boundary lines or other items affecting title; (vii) Shall
not be responsible for verifying square footage, representations of others or information contained in Investigation reports, Multiple
Listing Service, advertisements, flyers or other promotional material; (viii) Shall not be responsible for providing legal or tax advice
regarding any aspect of a transaction entered into by Buyer or Seller; and (ix) Shall not be responsible for providing other advice
or information that exceeds the knowledge, education and experience required to perform real estate licensed activity. Buyer and
Seller agree to seek legal, tax, insurance, title and other desired assistance from appropriate professionals.
By signing below, Buyer and Seller each acknowledge that they have read, understand, accept and have received a Copy of
this Advisory. Buyer is encouraged to read it carefully.
______________________________________________________ ___________________________________________________
Buyer Signature
Date
Buyer Signature
Date
______________________________________________________ ___________________________________________________
Seller Signature
Date
Seller Signature
Date
Published by the
BIA REVISED 10/02 (PAGE 2 OF 2)
BUYER’S INSPECTION ADVISORY (BIA PAGE 2 OF 2)
70
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REQUEST FOR REPAIR No. _____
CALIFORNIA
OF REALTORS®
(Or Other Corrective Action)
(C.A.R. Form RR, Revised 10/02)
In accordance with the terms and conditions of the: ■ California Residential Purchase Agreement or ■ Other ___________
______________________________________________________________________ (“Agreement”), dated ___________________,
on property known as _______________________________________________________________________________ (“Property”),
between ___________________________________________________________________________________________ (“Buyer”),
and ________________________________________________________________________________________________ (“Seller”).
1. BUYER’S REQUEST:
A. Buyer requests that Seller repair the following items or take the specified action prior to final verification of condition:
■ See attached list dated ____________________________________________________________________ for requests.
B.
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__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
A copy of the following inspection or other report is attached.
■ _______________________________________________ ■ _________________________________________________
■ _______________________________________________ ■ _________________________________________________
Buyer ____________________________________________________________________ Date ________________________
Buyer ____________________________________________________________________ Date ________________________
2.
SELLER’S RESPONSE TO BUYER’S REQUEST:
A. If Buyer agrees to remove in writing the following contingency(ies), _____________________________________
(i) ■ Seller agrees to repair or take the other specified action with respect to all of the items in 1A above.
OR (ii)■ Seller agrees to repair or take the other specified action with respect to all of the items in 1A above, with the following
exception(s): _______________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
B. ■ Seller does not agree to any of Buyer’s requests.
Seller _____________________________________________________________________ Date ________________________
Seller _____________________________________________________________________ Date ________________________
3.
BUYER’S REPLY TO SELLER’S RESPONSE:
A. ■ Buyer accepts Seller’s response, withdraws all requests for items that Seller has not agreed to, and removes the
contingency(ies) identified in 2A.
B. ■ Buyer withdraws the request in 1A above, and makes a new request as specified in the attached Request for Repair No. ______.
Buyer _____________________________________________________________________ Date ________________________
Buyer _____________________________________________________________________ Date ________________________
The copyright laws of the United States (Title 17 U.S. Code) forbid the unauthorized reproduction of this form, or any portion thereof, by photocopy machine or any other means, including
facsimile or computerized formats. Copyright © 2001-2002, CALIFORNIA ASSOCIATION OF REALTORS®, INC. ALL RIGHTS RESERVED.
®
THIS FORM HAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.). NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR
Published by the
RR REVISED 10/02 (PAGE 1 OF 1) Print Date
REQUEST FOR REPAIR (RR PAGE 1 OF 1)
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72
CALIFORNIA
OF REALTORS®
NOTICE TO BUYER TO PERFORM
No. ________
(C.A.R. Form NBP, Revised 10/02)
In accordance with the terms and conditions of the: ■ California Residential Purchase Agreement or ■ Other ___________
__________________________________________________________ (“Agreement”), dated ____________________,
on property known as _____________________________________________________________________ (“Property”),
between _________________________________________________________________________________ (“Buyer”),
and _____________________________________________________________________________________ (“Seller”).
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SELLER hereby gives Buyer notice to remove the following contingencies or take the specified contractual action:
Contractual Action
Contingency
■ ALL CONTINGENCIES
A. ■ Loan (Paragraph 2I)
L. ■ Initial Deposit (Paragraph 2A)
B. ■ Appraisal (Paragraph 2J)
M. ■ Increased Deposit (Paragraph 2B)
C. ■ Tenant-Occupied Property (Paragraph 3C(iii))
N. ■ Loan Application Letter (Paragraph 2G)
D. ■ Disclosures/Reports (Paragraphs 4 and 5)
O. ■ Down Payment Verification (Paragraph 2H)
E ■ Common Interest Disclosures (Paragraph 6B)
P. ■ All Cash Verification (Paragraph 2L)
F. ■ Buyer Investigation, including insurability (Paragraph 9)
Q. ■ Return of Statutory Disclosures (Paragraph 5A(2))
G. ■ Title: Preliminary Report (Paragraph 12)
R. ■ Return of Lead Disclosures (Paragraph 5A(2))
H. ■ Sale of Buyer’s Property (Paragraph 13)
S. ■ Receipt for Increased Deposit (Paragraph 16)
I. ■ _________________________________________
T. ■ _________________________________________
J. ■ _________________________________________
U. ■ _________________________________________
K. ■ _________________________________________
V. ■ _________________________________________
NOTE: Paragraph numbers refer to the California Residential Purchase Agreement (C.A.R. Form RPA-CA)
BUYER: If you do not remove the contingency(ies) (C.A.R. Form RRCR) or take the contractual actions
specified above within 24 (or ■ _______) hours (but no less than the time specified in the Agreement) of
receipt of this Notice to Buyer to Perform, Seller may cancel the Agreement.
______________________________________________________________________
_____________________ ______ AM/PM
Seller
Date
Time
______________________________________________________________________
_____________________ ______ AM/PM
Seller
Date
Time
(_____/_____) (Initials) CONFIRMATION OF RECEIPT: A Copy of this Signed Notice to Buyer to Perform was personally
received by Buyer or authorized agent on ________________________________________ (date), at ________ AM/PM.
The copyright laws of the United States (Title 17 U.S. Code) forbid the unauthorized reproduction of this form, or any portion thereof, by photocopy machine or any other means,
including facsimile or computerized formats. Copyright © 2002, CALIFORNIA ASSOCIATION OF REALTORS®, INC. ALL RIGHTS RESERVED.
Published by the
NBP REVISED 10/02 (PAGE 1 OF 1) Print Date
NOTICE TO BUYER TO PERFORM (NBP PAGE 1 OF 1)
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CALIFORNIA
OF REALTORS®
NOTICE TO SELLER TO PERFORM
No. ________
(C.A.R. Form NSP, Revised 10/02)
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In accordance with the terms and conditions of the ■ California Residential Purchase Agreement or ■ Other
________________________________________________________________________________________________
_______________________________________________________________ (“Agreement”), dated _______________,
between _________________________________________________________________________________ (“Buyer”),
and _____________________________________________________________________________________ (“Seller”).
Buyer hereby gives Seller notice that Buyer has not yet received from Seller the items checked below. If Seller
does not provide Buyer with these items, Buyer may be entitled to cancel the Agreement or delay removing an
applicable contingency:
Contractual Action
A. ■ Delivery of Wood Destroying Pest Inspection (Paragraph 4A)
B. ■ Delivery of the following Inspection or Report (Paragraph 4_______): _________________________________
________________________________________________________________________________________
C. ■ Delivery of Lead Disclosures (Paragraph 5A)
D. ■ Delivery of the following Statutory Disclosures (Paragraph 5A): ______________________________________
________________________________________________________________________________________
E. ■ Delivery of the following booklets/guides (Paragraph 5B): __________________________________________
________________________________________________________________________________________
F.
■ Disclosure of Property in Common Interest Development (Paragraph 6A)
G. ■ Delivery of Common Interest Disclosures (Paragraph 6B)
H. ■ Disclosure of Known Property Insurance Claims (Paragraph 7B)
I.
■ Delivery of Preliminary Title Report (Paragraph 12A)
J.
■ Approval of verification of down payment and closing costs (Paragraph 14C(3))
K. ■ Approval of verification of cash (Paragraph 14C(3))
L. ■ ________________________________________________________________________________________
M. ■ ________________________________________________________________________________________
NOTE: Paragraph numbers refer to the California Residential Purchase Agreement (C.A.R. Form RPA-CA)
SELLER: If you do not take the specified contractual action indicated above, Buyer may cancel the Agreement.
______________________________________________________________________
_____________________ ______ AM/PM
Buyer
Date
Time
______________________________________________________________________
_____________________ ______ AM/PM
Buyer
Date
Time
(_____/_____) (Initials) CONFIRMATION OF RECEIPT: A Copy of this Signed Notice to Seller to Perform was personally
received by Seller or authorized agent on ____________________________________________ (date), at _____ AM/PM.
Published by the
NSP REVISED 10/02 (PAGE 1 OF 1) Print Date
NOTICE TO SELLER TO PERFORM (NSP PAGE 1 OF 1)
74
EQUAL HOUSING
OPPORTUNITY
CALIFORNIA
OF REALTORS®
SUPPLEMENTAL STATUTORY
AND CONTRACTUAL DISCLOSURES
(C.A.R. Form SSD, Revised 4/03)
1. Seller makes the following disclosures with regard to the real property or manufactured home described as
________________________________________________________________, Assessor’s Parcel No. _________________,
situated in _________________________________________, County of _______________________, California, (“Property”).
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2. THE FOLLOWING ARE REPRESENTATIONS MADE BY THE SELLER AND ARE NOT THE REPRESENTATIONS
OF THE AGENT(S), IF ANY. THIS DISCLOSURE STATEMENT IS NOT A WARRANTY OF ANY KIND BY THE
SELLER OR ANY AGENT(S) AND IS NOT A SUBSTITUTE FOR ANY INSPECTIONS OR WARRANTIES THE
PRINCIPAL(S) MAY WISH TO OBTAIN. A REAL ESTATE BROKER IS QUALIFIED TO ADVISE ON REAL ESTATE
TRANSACTIONS. IF SELLER OR BUYER DESIRE LEGAL ADVICE, CONSULT AN ATTORNEY.
3. Are you (Seller) aware of any of the following? (Explain any “yes” answers below)
A. Whether the Property is a condominium or located in a planned unit development or other
common interest subdivision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ■ Yes ■ No
B. Insurance claims affecting the Property within the past 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ■ Yes ■ No
C. Matters affecting title to the Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ■ Yes ■ No
D. Within the last 3 years, the death of an occupant of the Property upon the Property . . . . . . . . . . . . . . . ■ Yes ■ No
E. The following disclosures (E(1-4)) are made based upon Seller’s knowledge or (■ if checked) will not
be made on this form and instead will be made on an independent third-party report:
(1) Whether the Property is located in a zone or district allowing manufacturing . . . . . . . . . . . . . . . . . ■ Yes ■ No
(2) Whether the Property is located in a zone or district allowing commercial use. . . . . . . . . . . . . . . . ■ Yes ■ No
(3) Whether the Property is located in a zone or district allowing airport use . . . . . . . . . . . . . . . . . . . . ■ Yes ■ No
(4) Whether the Property is located within 1 mile of a former federal or state ordnance location . . . . ■ Yes ■ No
(In general, an area once used for military training purposes that may contain potentially explosive munitions.)
F. Whether the Property is affected by a zone or district allowing manufacturing, commercial or airport use . ■ Yes ■ No
G. The release of an illegal controlled substance on or beneath the Property . . . . . . . . . . . . . . . . . . . . . . ■ Yes ■ No
H. Material facts or defects affecting the Property not otherwise disclosed to Buyer . . . . . . . . . . . . . . . . . ■ Yes ■ No
Explanation or ■ (if checked) see attached ____________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________.
4. Seller represents that the information herein is true and correct to the best of Seller’s knowledge as of the date signed
by Seller. Seller hereby authorizes any agent(s) representing any principal(s) in this transaction to provide a copy of this
statement to any person or entity in connection with any actual or anticipated sale of the Property.
Seller _________________________________________________________________ Date _____________________
Seller _________________________________________________________________ Date _____________________
5. By signing below, Buyer acknowledges Buyer has read, understands, accepts and has received a copy of this
Supplemental Statutory and Contractual Disclosures form.
Buyer _________________________________________________________________ Date _____________________
Buyer _________________________________________________________________ Date _____________________
Agent (Broker Representing Seller) ____________________________________________________________________
By ____________________________________________________________________ Date _____________________
(Associate-Licensee or Broker Signature)
Agent (Broker Obtaining the Offer) ____________________________________________________________________
By ____________________________________________________________________ Date _____________________
(Associate-Licensee or Broker Signature)
including facsimile or computerized formats. Copyright © 2002-2003, CALIFORNIA ASSOCIATION OF REALTORS®, INC. ALL RIGHTS RESERVED.
Published by the
SSD REVISED 4/03 (PAGE 1 OF 1) PRINT DATE
SUPPLEMENTAL STATUTORY AND CONTRACTUAL DISCLOSURES (SSD PAGE 1 OF 1)
75
EQUAL HOUSING
OPPORTUNITY
CALIFORNIA
OF REALTORS®
WOOD DESTROYING PEST INSPECTION AND
ALLOCATION OF COST ADDENDUM
(C.A.R. Form WPA, Revised 10/02)
This is an addendum to the ■ California Residential Purchase Agreement or ■ Other _____________________________
____________________________________________________ (“Agreement”), dated _____________________________,
between _________________________________________________________________________________ (“Buyer”),
and _____________________________________________________________________________________ (“Seller”).
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THE FOLLOWING SHALL REPLACE PARAGRAPH 4A IN THE AGREEMENT and shall supercede any conflicting terms
in any previously-generated agreement:
WOOD DESTROYING PESTS
A. ■ Buyer ■ Seller shall pay for a Pest Control Report for wood destroying pests and organisms only (“Report”).
The Report shall be prepared by _______________________________________, a registered structural pest
control company, who shall separate the Report into sections for evident infestation or infection (Section 1) and for
conditions likely to lead to infestation or infection (Section 2). The Report shall cover the main building and
attached structures and, if checked: ■ detached garages and carports, ■ detached decks, ■ the following other
structures on the Property:____________________________________________________________________.
The Report shall not include roof coverings. If the Property is a unit in a condominium or other common interest
subdivision, the Report shall include only the separate interest and any exclusive-use areas being transferred, and
shall not include common areas. Water tests of shower pans on upper level units may not be performed unless the
owners of property below the shower consent. If Buyer requests inspection of inaccessible areas, Buyer shall pay
for the cost of entry, inspection and closing for those areas, unless otherwise agreed. A written Pest Control
Certification shall be issued prior to Close Of Escrow, unless otherwise agreed, only if no infestation or infection is
found or if required corrective work is completed.
B.
(Section 1) ■ Buyer ■ Seller shall pay for work recommended to correct “Section 1” conditions described in the
Report and the cost of inspection, entry and closing of those inaccessible areas where active infestation or
infection is discovered.
(Section 2) ■ Buyer ■ Seller shall pay for work recommended to correct “Section 2” conditions described in the
Report if requested by Buyer.
By signing below, the undersigned acknowledge that each has read, understands and has received a copy of
this Addendum.
Date ________________________________________________
Date ______________________________________________
Buyer ______________________________________________
Seller______________________________________________
Buyer ______________________________________________
Seller______________________________________________
Published by the
WPA REVISED 10/02 (PAGE 1 OF 1) Print Date
EQUAL HOUSING
OPPORTUNITY
WOOD DESTROYING PEST INSPECTION AND ALLOCATION OF COST ADDENDUM (WPA PAGE 1 OF 1)
76
CALIFORNIA
OF REALTORS®
CONTINGENCY FOR SALE OR PURCHASE
OF OTHER PROPERTY
(C.A.R. Form COP, Revised 10/02)
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This is an addendum to the ■ California Residential Purchase Agreement, ■ Counter Offer, ■ Other _________________,
_________________________________________________________(“Agreement”), dated ______________________,
on property known as _______________________________________________________________ (“Property”),
between _______________________________________________________________________________ (“Buyer”),
and _____________________________________________________________________________________ (“Seller”).
A. ■ SALE OF BUYER’S PROPERTY (if checked):
1. The Agreement is contingent on the close of escrow of Buyer’s property, described as: ____________________
__________________________________________________________________________ (“Buyer’s Property”).
2. Buyer’s Property is:
(a) ■ (if checked) not yet listed for sale,
OR (b) ■ (if checked) listed for sale with _________________________________________________ company,
and ■ (if checked) offered for sale in the ________________________________MLS, # ____________.
OR (c) ■ (if checked) in escrow no. _______________ with __________________________________________
________________ escrow holder, scheduled to close escrow on __________________________ (date).
3. Buyer shall deliver to Seller Copies of the contract for the sale of Buyer’s Property, escrow instructions and all
amendments and modifications thereto. Delivery to occur within 5 Days After Acceptance if Buyer’s Property is
already in escrow or within 5 Days After Buyer enters into an agreement to sell Buyer’s Property. If Buyer fails
to provide these documents within that time, Seller, after first giving Buyer a Notice to Buyer to Perform (C.A.R.
Form NBP), may cancel the Agreement in writing.
4. If Buyer’s Property does not close escrow by (i) the date specified in paragraph A2(c); or (ii) (if checked
■ _________________________), then: (i) Seller, after first giving Buyer a Notice to Buyer to Perform,
may cancel this agreement in writing; or (ii) Buyer may cancel the Agreement in writing.
5. After Acceptance, Seller SHALL have the right to continue to offer the Property for sale:
(a) Removal of Sale and Loan Contingency: If Seller accepts another written offer, Seller shall give written
notice to Buyer to: (i) in writing remove this contingency; (ii) in writing remove the loan contingency, if any;
and (iii) comply with the following additional requirement(s): ___________________________________
___________________________________________________________________________________.
If Buyer fails to complete these actions within 72 (or ■ ____________) hours after receipt of such notice,
Seller may immediately cancel the Agreement in writing.
OR (b) ■ (if checked) Backup Offers Only. Seller shall have the right to continue to offer the Property for
sale for backup offers only and shall not invoke the notice provisions in paragraph 5a during the term
of the Agreement.
B. ■ SELLER’S PURCHASE OF REPLACEMENT PROPERTY (if checked):
1. The Agreement is contingent on Seller entering a contract to acquire replacement property.
2. Seller shall, within 17 (or ■_____) Days After Acceptance, remove this contingency or cancel the Agreement. If
Seller does not remove this contingency in writing within that time, Buyer may cancel the Agreement in writing.
3. (a) Time periods in the Agreement for inspections, contingencies, covenants and other obligations shall begin:
(i) as specified in the Agreement; (ii) (if checked) ■ the day after Seller delivers to Buyer a written notice
removing the contingency for Seller’s purchase of replacement property; or (iii) (if checked ■ _____________).
(b) Buyer and Seller agree that Seller may, by providing Buyer written notice at the time Seller removes this
contingency, extend the Close Of Escrow date for a maximum of _________ additional Days or
■ ________________________ (date).
By signing below, Buyer and Seller each acknowledge that they have read, understand, accept and have received a Copy
of this agreement.
Date ___________________________________
Date ____________________________________
Buyer __________________________________
Seller ____________________________________
Buyer __________________________________
Seller ____________________________________
including facsimile or computerized formats. Copyright © 1991-2002, CALIFORNIA ASSOCIATION OF REALTORS®, INC. ALL RIGHTS RESERVED.
Published by the
COP REVISED 10/02 (PAGE 1 OF 1) Print Date
CONTINGENCY FOR SALE OR PURCHASE OF OTHER PROPERTY (COP PAGE 1 OF 1)
77
EQUAL HOUSING
OPPORTUNITY
CALIFORNIA
OF REALTORS®
PURCHASE AGREEMENT ADDENDUM
May Also Be Used With Counter Offer
(C.A.R. Form PAA, Revised 10/02)
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This is an addendum to the ■ California Residential Purchase Agreement, ■ Counter Offer No._______, ■ Other __________
____________________________________________________, (“Agreement”), dated __________________________,
between ________________________________________________________________________________ (“Buyer”),
and _____________________________________________________________________________________ (“Seller”).
(The definitions in the California Residential Purchase Agreement are applicable to this Purchase Agreement Addendum.)
1. ■ CANCELLATION OF PRIOR SALE; BACK-UP OFFER (If checked): This Agreement is in back-up position
number _____, and is contingent upon written cancellation of any prior contracts and related escrows (“Prior
Contracts”) between Seller and other buyers. Seller and other buyers may mutually agree to modify or amend the
terms of Prior Contracts. Buyer may cancel this Agreement in writing at any time before Seller provides Buyer
Copies of written cancellations of Prior Contracts Signed by all parties to those contracts. If Seller is unable to
provide such written Signed cancellations to Buyer by ___________________ (date), then either Buyer or Seller may
cancel the Agreement in writing.
A. BUYER'S DEPOSIT CHECK shall be: (i) held uncashed until Copies of the written cancellations Signed by all
parties to the Prior Contracts are provided to Buyer; OR (ii) (if checked) ■ immediately handled as provided in
the Agreement.
B. TIME PERIODS in the Agreement for Investigations, contingencies, covenants and other obligations (i) shall begin
on the Day After Seller provides Buyer Copies of Signed cancellations of Prior Contracts; OR (ii) (if checked) ■ all
time periods shall begin as provided in this Agreement. However, if the date for Close Of Escrow is a specific
calendar date, that date shall NOT be extended, unless agreed to in writing by Buyer and Seller.
2. ■ SELLER TO REMAIN IN POSSESSION AFTER CLOSE OF ESCROW (If checked): This provision is intended for
short-term occupancy (i.e. less than 30 Days). If occupancy is intended to be for 30 Days or longer, use Residential
Lease After Sale (C.A.R. Form RLAS). Note: Local rent control or other Law regarding tenant’s rights may impact
Buyer’s and Seller’s rights and obligations.
A. TERM: Seller to remain in possession of Property for ____ Days After Close Of Escrow (or ■ _______________).
B. COMPENSATION: Seller agrees to pay Buyer $__________ per Day (or ■ ________________________________),
which (i) Seller shall deposit with escrow holder prior to Close Of Escrow; or (ii) shall be withheld from Seller’s
proceeds. Seller agrees to pay $_________________________________________ per Day for any holding over.
C. LATE CHARGE/NSF CHECKS: If any payment from Seller to Buyer is required outside of escrow, and any such
payment is not received by Buyer within 5 (or ■ ______) Days After date due, Seller shall pay to Buyer an
additional sum of $____________ as a Late Charge. If a check is returned for non-sufficient fund (“NSF”), Seller
shall pay to Buyer $25.00 as an NSF charge. Seller and Buyer agree that these charges represent a fair and
reasonable estimate of the costs Buyer may incur by reason of Seller’s late or NSF payment. Buyer’s acceptance
of any Late Charge or NSF fee shall not constitute a waiver as to any default by Seller.
D. UTILITIES: Seller agrees to pay for all utilities and services, and the following charges: ______________________
________________________ except _________________________________, which shall be paid for by Buyer.
E. ENTRY: Seller shall make Property available to Buyer for the purpose of entering to make necessary or agreed
repairs, or to supply necessary or agreed services, or to show Property to prospective or actual purchasers,
tenants, mortgagees, lenders, appraisers or contractors. Buyer and Seller agree that 24 hours notice (oral or
written) shall be reasonable and sufficient notice. In an emergency, Buyer may enter Property at any time without
prior notice.
F. MAINTENANCE: Seller shall maintain the Property, including pool, spa, landscaping and grounds, and all personal
property included in the sale in substantially the same condition as on the date of Acceptance of the Agreement.
Except as provided in the Agreement, Seller shall not make alterations to the Property without Buyer’s written consent.
G. ASSIGNMENT; SUBLETTING: Seller shall not assign or sublet all or any part of the Property, or assign or transfer the right
to occupy the Property. Any assignment, subletting or transfer of the Property by voluntary act of Seller, by operation of Law
or otherwise, without Buyer’s prior written consent shall give Buyer the right to terminate Seller’s right to possession.
H. SELLER’S OBLIGATIONS UPON DELIVERY OF POSSESSION: Upon delivery of possession to Buyer, Seller shall
deliver the Property in the condition and on the terms provided in the Agreement.
I. INSURANCE: Seller’s personal property (including vehicles) are not insured by Buyer, and, if applicable, owner’s
association, against loss or damage due to fire, theft, vandalism, rain, water, criminal or negligent acts of others, or any other
cause. Seller is to carry Seller’s own insurance to protect Seller from such loss.
J. WAIVER: The waiver of any breach shall not be construed as a continuing waiver of the same or any subsequent breach.
K. OTHER TERMS AND CONDITIONS/SUPPLEMENTS: ______________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
Buyer’s Initials (__________)(__________)
PAA REVISED 10/02 (PAGE 1 OF 2) Print Date
PURCHASE AGREEMENT ADDENDUM (PAA PAGE 1 OF 2)
78
EQUAL HOUSING
OPPORTUNITY
Date: _________________
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3. ■ TENANT TO REMAIN IN POSSESSION (If checked): Buyer shall take Property subject to the rights of existing
tenants. Seller shall, within 7 (or ■ ______) Days After Acceptance, deliver to Buyer Copies of all: estoppel certificates
sent to and received back from tenants; leases; rental agreements; and current income and expense statements
(“Rental Documents”). Seller shall give Buyer written notice of any changes to existing leases or tenancies or new
agreements to lease or rent (“Proposed Changes”) at least 7 (or ■ ______) Days prior to any Proposed Changes.
Buyer’s approval of the Rental Documents and Proposed Changes is a contingency of the Agreement. Buyer shall,
within 5 (or ■ ______) Days After receipt of Rental Documents or Proposed Changes remove the applicable
contingency or cancel the Agreement. Seller shall transfer to Buyer, through escrow, all unused tenant deposits. No
warranty is made concerning compliance with governmental restrictions, if any, limiting the amount of rent that can
lawfully be charged, and/or the maximum number of persons who can lawfully occupy the Property, unless otherwise
agreed in writing.
4. ■ SECONDARY OR ASSUMED LOAN (If checked): Obtaining the secondary loan or assumption below and
approval of such financing is a contingency of this Agreement. Buyer shall act diligently and in good faith to obtain
the designated financing.
A. ■ SECONDARY LOAN
(1) New second deed of trust in favor of LENDER encumbering the Property, securing a note payable at
maximum interest of _______% fixed rate or _______% initial adjustable rate, with a maximum interest rate
of _______%, balance due in ______ years. Buyer shall pay loan fees/points not to exceed
________________________. (These terms apply whether the designated loan is conventional, FHA or VA.)
(2) Within 17 (or ■ ______ Days) After Acceptance, Buyer shall, as specified in the Agreement, remove this
contingency or cancel this Agreement; OR (if checked) ■ secondary loan contingency shall remain in effect
until the loan is funded.
B. ■ ASSUMPTION OF EXISTING LOAN:
(1) Assumption of existing deed of trust encumbering the Property, securing a note payable at maximum interest
of _______% fixed rate or _______% initial adjustable rate, with a maximum interest rate of _______%,
balance due in __________ years. Buyer shall pay loan fees/points not to exceed
______________________________________. Seller shall, within 5 (or ■ ______) Days After Acceptance,
request from Lender, and upon receipt provide to Buyer, Copies of all applicable notes and deeds of trust, loan
balances and current interest rates. Differences between estimated and actual loan balances shall be
adjusted at Close Of Escrow by cash down payment. Impound accounts, if any, shall be assigned and charged
to Buyer and credited to Seller. If this is an assumption of a VA Loan, the sale is contingent upon Seller being
provided a release of liability and substitution of eligibility, unless otherwise agreed in writing.
(2) Within 17 (or ■ ______ Days) After Acceptance, Buyer shall, as specified in the Agreement, remove this
contingency or cancel this Agreement. However, if the assumed loan documents are not provided to Buyer
within 7 Days After Acceptance, Buyer has 5 (or ■ ______) Days after receipt of these documents, or the
fixed time specified in 4B(2), whichever occurs last, to remove this contingency or cancel the Agreement; OR
(if checked) ■ assumed loan contingency shall remain in effect until the assumption is approved.
5. ■ SHORT PAY (If checked): This Agreement is contingent upon Seller’s receipt of written consent from all existing
secured lenders and lienholders (“Short-Pay Lenders”), no later than 5:00 P.M. on _______________________ (date)
(“Short-Pay Contingency Date”), to reduce their respective loan balances by an amount sufficient to permit the
proceeds from the sale of the Property, without additional funds from Seller, to pay the existing balances on loans, real
property taxes, brokerage commissions, closing costs, and other monetary obligations the Agreement requires Seller
to pay at Close Of Escrow (including, but not limited to, escrow charges, title charges, documentary transfer taxes,
prorations, retrofit costs and Repairs). If Seller fails to give Buyer written notice of all existing Short-Pay Lenders’
consent by the Short-Pay Contingency Date, either Seller or Buyer may cancel the Agreement in writing. Seller shall
reasonably cooperate with existing Short-Pay lenders in the short-pay off process. Buyer and Seller understand that
Lenders are not obligated to accept a short-pay off and may accept other offers, and that Seller, Buyer and Brokers do
not have control over whether Short-Pay Lenders will consent to a short-pay off, or any act, omission, or decision by
any Short-Pay Lender in the short-pay off process. Seller is informed that a short-pay may create credit or legal
problems, or may result in taxable income to Seller. Seller may present to Short-Pay Lender any additional offers that
are received on the Property. Seller is advised to seek advice from an attorney, certified public accountant or
other expert regarding such potential consequences of a short-pay off.
6. ■ COURT CONFIRMATION (If checked): This Agreement is contingent upon court confirmation on or before
_________________________ (date). If court confirmation is not obtained by that date, Buyer may cancel this
Agreement in writing. Court confirmation may be required in probate, conservatorship, guardianship, receivership,
bankruptcy, or other proceedings. The court may allow open, competitive bidding, resulting in Property being sold
to the highest bidder. Broker recommends that Buyer appear at court confirmation hearing. Buyer understands that
(i) Broker and others may continue to market the Property and (ii) Broker may represent other competitive bidders
prior to and at the court confirmation.
______________________________________________
Date ______________________________________________
Buyer ______________________________________________
Seller______________________________________________
Buyer ______________________________________________
Seller______________________________________________
Date
Published by the
PAA REVISED 10/02 (PAGE 2 OF 2)
PURCHASE AGREEMENT ADDENDUM (PAA PAGE 2 OF 2)
79
EQUAL HOUSING
OPPORTUNITY
CALIFORNIA
OF REALTORS®
SELLER FINANCING ADDENDUM AND DISCLOSURE
(California Civil Code §§2956-2967)
(C.A.R. Form SFA, Revised 10/02)
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This is an addendum to the ■ Residential Purchase Agreement, ■ Counter Offer, or ■ Other ______________________________
______________________________________________________________________, (“Agreement”), dated ___________________,
On property known as _______________________________________________________________________________ (“Property”),
between ____________________________________________________________________________________________ (“Buyer”),
and ________________________________________________________________________________________________ (“Seller”).
Seller agrees to extend credit to Buyer as follows:
1. PRINCIPAL; INTEREST; PAYMENT; MATURITY TERMS: ■ Principal amount $ ___________________, interest at ________%
per annum, payable at approximately $ _______________ per ■ month, ■ year, or ■ other ____________________________,
remaining principal balance due in _____ years.
2. LOAN APPLICATION; CREDIT REPORT: Within 5 (or ■ ______) Days After Acceptance: (a) Buyer shall provide Seller a completed
loan application on a form acceptable to Seller (such as a FNMA/FHLMC Uniform Residential Loan Application for residential one to four
unit properties); and (b) Buyer authorizes Seller and/or Agent to obtain, at Buyer’s expense, a copy of Buyer’s credit report. Buyer shall
provide any supporting documentation reasonably requested by Seller. Seller may cancel this Agreement in writing if Buyer fails to
provide such documents within that time, or if Seller disapproves any above item within 5 (or ■ ______) Days After receipt of each item.
3. CREDIT DOCUMENTS: This extension of credit by Seller will be evidenced by: ■ Note and deed of trust; ■ All-inclusive
note and deed of trust; ■ Installment land sale contract; ■ Lease/option (when parties intend transfer of equitable title);
OR ■ Other (specify) ________________________________________________________________________________
THE FOLLOWING TERMS APPLY ONLY IF CHECKED. SELLER IS ADVISED TO READ ALL TERMS, EVEN THOSE NOT
CHECKED, TO UNDERSTAND WHAT IS OR IS NOT INCLUDED, AND, IF NOT INCLUDED, THE CONSEQUENCES THEREOF.
4. ■ LATE CHARGE: If any payment is not made within ____ Days After it is due, a late charge of either $ _______________________,
or ____% of the installment due, may be charged to Buyer. NOTE: On single family residences that Buyer intends to occupy,
California Civil Code §2954.4(a) limits the late charge to no more than 6% of the total monthly payment due and requires a grace
period of no less than 10 days.
5. ■ BALLOON PAYMENT: The extension of credit will provide for a balloon payment, in the amount of $ ______________________,
plus any accrued interest, which is due on ______________________________________________________________ (date).
6. ■ PREPAYMENT: If all or part of this extension of credit is paid early, Seller may charge a prepayment penalty as follows (if
applicable): _______________________________________________________________. Caution: California Civil Code
§2954.9 contains limitations on prepayment penalties for residential one-to-four unit properties.
7. ■ DUE ON SALE: If any interest in the Property is sold or otherwise transferred, Seller has the option to require immediate
payment of the entire unpaid principal balance, plus any accrued interest.
8.* ■ REQUEST FOR COPY OF NOTICE OF DEFAULT: A request for a copy of Notice of Default as defined in California Civil
Code §2924b will be recorded. If Not, Seller is advised to consider recording a Request for Notice of Default.
9.* ■ REQUEST FOR NOTICE OF DELINQUENCY: A request for Notice of Delinquency, as defined in California Civil Code §2924e,
to be signed and paid for by Buyer, will be made to senior lienholders. If not, Seller is advised to consider making a Request for
Notice of Delinquency. Seller is advised to check with senior lienholders to verify whether they will honor this request.
10.* ■ TAX SERVICE:
A. If property taxes on the Property become delinquent, tax service will be arranged to report to Seller. If not, Seller is
advised to consider retaining a tax service, or to otherwise determine that property taxes are paid.
B. ■ Buyer, ■ Seller, shall be responsible for the initial and continued retention of, and payment for, such tax service.
11. ■ TITLE INSURANCE: Title insurance coverage will be provided to both Seller and Buyer, insuring their respective interests
in the Property. If not, Buyer and Seller are advised to consider securing such title insurance coverage.
12. ■ HAZARD INSURANCE:
A. The parties’ escrow holder or insurance carrier will be directed to include a loss payee endorsement, adding Seller to
the Property insurance policy. If not, Seller is advised to secure such an endorsement, or acquire a separate
insurance policy.
B. Property insurance does not include earthquake or flood insurance coverage, unless checked:
■ Earthquake insurance will be obtained; ■ Flood insurance will be obtained.
13. ■ PROCEEDS TO BUYER: Buyer will receive cash proceeds at the close of the sale transaction. The amount received will be
approximately $____________________________________, from ________________________________ (indicate source of
proceeds). Buyer represents that the purpose of such disbursement is as follows: ____________________________________.
14. ■ NEGATIVE AMORTIZATION; DEFERRED INTEREST: Negative amortization results when Buyer’s periodic payments are
less than the amount of interest earned on the obligation. Deferred interest also results when the obligation does not
require periodic payments for a period of time. In either case, interest is not payable as it accrues. This accrued interest
will have to be paid by Buyer at a later time, and may result in Buyer owing more on the obligation than at its origination.
The credit being extended to Buyer by Seller will provide for negative amortization or deferred interest as indicated below.
(Check A, B, or C. CHECK ONE ONLY.)
■ A. All negative amortization or deferred interest shall be added to the principal ___________________________________
(e.g., annually, monthly, etc.), and thereafter shall bear interest at the rate specified in the credit documents (compound interest);
OR ■ B. All deferred interest shall be due and payable, along with principal, at maturity;
OR ■ C. Other ______________________________________________________________________________________________.
*(For Paragraphs 8-10) In order to receive timely and continued notification, Seller is advised to record appropriate notices and/or to
notify appropriate parties of any change in Seller’s address.
Buyer’s Initials (__________)(__________)
SFA REVISED 10/02 (PAGE 1 OF 3) Print Date
SELLER FINANCING ADDENDUM AND DISCLOSURE (SFA PAGE 1 OF 3)
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Date: _________________
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15. ■ ALL-INCLUSIVE DEED OF TRUST; INSTALLMENT LAND SALE CONTRACT: This transaction involves the use of an
all-inclusive (or wraparound) deed of trust or an installment land sale contract. That deed of trust or contract shall provide as follows:
A. In the event of an acceleration of any senior encumbrance, the responsibility for payment, or for legal defense is: __________
___________________________________________________ ; OR ■ Is not specified in the credit or security documents.
B. In the event of the prepayment of a senior encumbrance, the responsibilities and rights of Buyer and Seller regarding
refinancing, prepayment penalties, and any prepayment discounts are: __________________________________________;
OR ■ Are not specified in the documents evidencing credit.
C. Buyer will make periodic payments to ___________________________________________________________ (Seller,
collection agent, or any neutral third party), who will be responsible for disbursing payments to the payee(s) on the senior
encumbrance(s) and to Seller. NOTE: The Parties are advised to designate a neutral third party for these purposes.
16. ■ TAX IDENTIFICATION NUMBERS: Buyer and Seller shall each provide to each other their Social Security Numbers or Taxpayer
Identification Numbers.
17. ■ OTHER CREDIT TERMS ________________________________________________________________________________
_____________________________________________________________________________________________________
18. ■ RECORDING: The documents evidencing credit (paragraph 3) will be recorded with the county recorder where the Property is
located. If not, Buyer and Seller are advised that their respective interests in the Property may be jeopardized by intervening
liens, judgments, encumbrances, or subsequent transfers.
19. ■ JUNIOR FINANCING: There will be additional financing, secured by the Property, junior to this Seller financing. Explain:
_____________________________________________________________________________________________________
20. SENIOR LOANS AND ENCUMBRANCES: The following information is provided on loans and/or encumbrances that will be senior
to Seller financing. NOTE: The following are estimates, unless otherwise marked with an asterisk (*). If checked: ■ A separate
sheet with information on additional senior loans/encumbrances is attached
1st
2nd
A. Original Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ _____________________________ $ ______________________________
B. Current Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ _____________________________ $ ______________________________
C. Periodic Payment (e.g. $100/month): . . . . . . . . . . . . . . . . $ _____________________________ $ ______________/_______________
Including Impounds of: . . . . . . . . . . . . . . . . . . . . . . . $ _____________________________ $ ______________/_______________
D. Interest Rate (per annum) . . . . . . . . . . . . . . . . . . . . . . . . . . . _____________________________% ______________________________%
E. Fixed or Variable Rate: . . . . . . . . . . . . . . . . . . . . . . . . . . . . _____________________________
______________________________
If Variable Rate: Lifetime Cap (Ceiling) . . . . . . . . . _____________________________
______________________________
Indicator (Underlying Index) . . . . . . . . . . . . . . . . . . . _____________________________
______________________________
Margins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _____________________________
______________________________
F. Maturity Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _____________________________
_______________________________
G. Amount of Balloon Payment . . . . . . . . . . . . . . . . . . . . . . . . $ _____________________________ $ ______________________________
H. Date Balloon Payment Due. . . . . . . . . . . . . . . . . . . . . . . . . _____________________________
I. Potential for Negative Amortization? (Yes, No, or Unknown) . .
______________________________
_____________________________
______________________________
J. Due on Sale? (Yes, No, or Unknown) . . . . . . . . . . . . . . . . _____________________________
______________________________
K. Pre-payment penalty? (Yes, No, or Unknown) . . . . . . . . _____________________________
______________________________
L. Are payments current? (Yes, No, or Unknown) . . . . . . . . _____________________________ ______________________________
21. BUYER’S CREDITWORTHINESS: (CHECK EITHER A OR B. Do not check both.) In addition to the loan application, credit report
and other information requested under paragraph 2:
A. ■ No other disclosure concerning Buyer’s creditworthiness has been made to Seller;
OR B. ■ The following representations concerning Buyer’s creditworthiness are made by Buyer(s) to Seller:
Borrower _________________________________________ Co-Borrower _______________________________________________
1. Occupation _________________________________ 1. Occupation _______________________________________________
2. Employer __________________________________ 2. Employer _________________________________________________
3. Length of Employment ________________________ 3. Length of Employment _____________________________________
4. Monthly Gross Income ________________________ 4. Monthly Gross Income _________________________________
5. Other_____________________________________ 5. Other ____________________________________________________
_______________________________________________
_________________________________________________________
22. ADDED, DELETED OR SUBSTITUTED BUYERS: The addition, deletion or substitution of any person or entity under this
Agreement or to title prior to close of escrow shall require Seller’s written consent. Seller may grant or withhold consent in Seller’s sole
discretion. Any additional or substituted person or entity shall, if requested by Seller, submit to Seller the same documentation as
required for the original named Buyer. Seller and/or Brokers may obtain a credit report, at Buyer’s expense, on any such person or entity.
Buyer’s Initials (__________)(__________)
SFA REVISED 10/02 (PAGE 2 OF 3)
81
EQUAL HOUSING
OPPORTUNITY
Date: _________________
23. CAUTION:
A. If the Seller financing requires a balloon payment, Seller shall give Buyer written notice, according to the terms of Civil Code
§2966, at least 90 and not more than 150 days before the balloon payment is due if the transaction is for the purchase of a
dwelling for not more than four families.
B. If any obligation secured by the Property calls for a balloon payment, Seller and Buyer are aware that refinancing of the balloon
payment at maturity may be difficult or impossible, depending on conditions in the conventional mortgage marketplace at that
time. There are no assurances that new financing or a loan extension will be available when the balloon prepayment, or any
prepayment, is due.
C. If any of the existing or proposed loans or extensions of credit would require refinancing as a result of a lack of full amortization,
such refinancing might be difficult or impossible in the conventional mortgage marketplace.
D. In the event of default by Buyer: (1) Seller may have to reinstate and/or make monthly payments on any and all senior
encumbrances (including real property taxes) in order to protect Seller’s secured interest; (2) Seller’s rights are generally limited
to foreclosure on the Property, pursuant to California Code of Civil Procedure §580b; and (3) the Property may lack sufficient
equity to protect Seller’s interests if the Property decreases in value.
LE
MP
SA
If this three-page Addendum and Disclosure is used in a transaction for the purchase of a dwelling for not more than four families, it shall
be prepared by an Arranger of Credit as defined in California Civil Code §2957(a). (The Arranger of Credit is usually the agent who
obtained the offer.)
___________________________________________________________________________________________________________
Arranger of Credit - (Print Firm Name)
By
Date
Address ___________________________________________ City ________________________ State _______ Zip ____________
Phone ________________________________________________ Fax _________________________________________________
BUYER AND SELLER ACKNOWLEDGE AND AGREE THAT BROKERS: (A) WILL NOT PROVIDE LEGAL OR TAX ADVICE; (B) WILL NOT
PROVIDE OTHER ADVICE OR INFORMATION THAT EXCEEDS THE KNOWLEDGE, EDUCATION AND EXPERIENCE REQUIRED TO OBTAIN
A REAL ESTATE LICENSE; OR (C) HAVE NOT AND WILL NOT VERIFY ANY INFORMATION PROVIDED BY EITHER BUYER OR SELLER.
BUYER AND SELLER AGREE THAT THEY WILL SEEK LEGAL, TAX AND OTHER DESIRED ASSISTANCE FROM APPROPRIATE
PROFESSIONALS. BUYER AND SELLER ACKNOWLEDGE THAT THE INFORMATION EACH HAS PROVIDED TO THE ARRANGER OF
CREDIT FOR INCLUSION IN THIS DISCLOSURE FORM IS ACCURATE. BUYER AND SELLER FURTHER ACKNOWLEDGE THAT EACH HAS
RECEIVED A COMPLETED COPY OF THIS DISCLOSURE FORM.
Buyer _____________________________________________________________________________________ Date _____________
(signature)
Address ___________________________________________ City ________________________ State _______ Zip
__
Phone ___________________________ Fax ______________________________ E-mail __________________________________
Buyer _____________________________________________________________________________________ Date _____________
(signature)
__
Phone ___________________________ Fax ______________________________ E-mail __________________________________
Seller _____________________________________________________________________________________ Date _____________
(signature)
__
Phone ___________________________ Fax ______________________________ E-mail __________________________________
Seller _____________________________________________________________________________________ Date _____________
(signature)
__
Phone ___________________________ Fax ______________________________ E-mail __________________________________
Published by the
SFA REVISED 10/02 (PAGE 3 OF 3)
82
EQUAL HOUSING
OPPORTUNITY
CALIFORNIA
OF REALTORS®
COOPERATING BROKER COMPENSATION
AGREEMENT AND ESCROW INSTRUCTION
(C.A.R. Form CBC, Revised 10/02)
IDENTITY OF LISTING BROKER, PROPERTY AND SELLER:
_________________________________________________________ (“Listing Broker”) is a real estate broker who has entered
into a written agreement for the marketing and sale or lease of the real property or manufactured home described as
_________________________________________________, Assessor’s Parcel No. __________________________, situated in
___________________________________________________, County of ______________________, California (“Property”) for
________________________________________________________________________________________________(“Seller”).
2.
IDENTITY OF COOPERATING (SELLING) BROKER AND BUYER:
_______________________________________________________________ (“Cooperating Broker”) is a real estate broker
licensed to practice real estate in California (or ■ if checked __________________________________________________ ) and
represents _______________________________________________________________________________________ (“Buyer”)
who has offered, is contemplating making an offer, or has entered into a contract, to purchase or lease the Property.
3.
LE
MP
SA
1.
LISTING BROKER COMPENSATION TO COOPERATING BROKER:
Provided that: (i) the transaction between the principals closes, and (ii) Listing Broker receives compensation for the transaction,
Listing Broker agrees to pay Cooperating Broker, and Cooperating Broker agrees to accept, compensation as follows:
(check one)
A. ■ Property is listed in the __________________________________ Multiple Listing Service (“MLS”), Cooperating Broker is a
participant in the MLS or reciprocal Multiple Listing Service and accepts the offer of compensation published in the MLS as:
______% of the selling (or leasing) price or $________________.
OR B. ■ Property is listed in the __________________________________ Multiple Listing Service (“MLS”), Cooperating Broker is a
participant in the MLS or reciprocal Multiple Listing Service and accepts the offer of compensation as modified below:
OR C. ■ Property is listed in the __________________________________ Multiple Listing Service (“MLS”), Cooperating Broker is
NOT a Participant in the MLS or reciprocal Multiple Listing Service. Cooperating Broker compensation shall be:
OR D. ■ Property is NOT listed with any Multiple Listing Service. Cooperating Broker compensation shall be:
4.
LISTING BROKER INSTRUCTION TO ESCROW HOLDER:
Listing Broker and Cooperating Broker instruct Escrow Holder to disburse to Cooperating Broker the amount specified in paragraph 3,
out of Listing Broker’s proceeds in escrow, and upon Close Of Escrow of the Property. This compensation instruction can be amended
or revoked only with the written consent of both Brokers. Escrow Holder shall immediately notify Brokers if either Broker instructs
Escrow Holder to change the terms of this instruction.
5.
ACKNOWLEDGMENT:
By signing below, the undersigned acknowledges that each has read, understands, accepts and has received a Copy of this Agreement.
Listing Broker (Firm) __________________________________________________________________________________________
By (Agent) ________________________________________________________________________________ Date _____________
Address _________________________________________________ City ________________________ State _______ Zip ______
Telephone ___________________________ Fax ______________________________ E-mail _______________________________
Cooperating Broker (Firm) _____________________________________________________________________________________
By (Agent) __________________________________________________________________________________ Date _____________
Address _________________________________________________ City ________________________ State _______ Zip ______
Telephone ___________________________ Fax ______________________________ E-mail _______________________________
including facsimile or computerized formats. Copyright © 2002, CALIFORNIAASSOCIATION OF REALTORS®, INC. ALL RIGHTS RESERVED.
Published by the
CBC REVISED 10/02 (PAGE 1 OF 1) PRINT DATE
EQUAL HOUSING
OPPORTUNITY
COOPERATING BROKER COMPENSATION AGREEMENT AND ESCROW INSTRUCTION (CBC PAGE 1 OF 1)
83

Your Guide to the California Residential Purchase Agreement

Transcription

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