(RPA) Highlights - Gary Kent Real Estate

Report
NEW California 2014 RPA
Presented by: KEVIN HALL
Broker Associate at
Keller Williams Realty, Gary Kent Team
& Instructor @ PALOMAR COLLEGE
760-758-5370 [email protected]
Course Material Available here:
www.garykent.com/2014/10/02/new-rpa
RESIDENTIAL PURCHASE AGREEMENT
(RPA) Highlights:
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IF IT IS BLUE... it is NEW
Assumptions:
a. Presenting to Real Estate Practice students
b. You have access to CAR.ORG and you are
familiar with and using Zipforms
• c. Remember, Addendum "adds to" and
Amendment "changes"
• d. This is only a brief overview of the changes
RESIDENTIAL PURCHASE AGREEMENT
(RPA) Highlights:
• e. I'm not licensed to give legal or tax advice
• f. My advice, read it yourself, then re-read it. Take
a class on it and then take another class on it.
Talk to everyone in your industry, not just
brokers, but your escrow, title, lenders, attorneys
and qualified intermediaries (1031 QI) for their
take on it.
• g. This will be a "generational" change to real
estate agents, just as the change from passive to
active contingency made a landmark change in
how real estate is done.
RPA CHANGES
Top Ten
• 1. Numbering system is changed - All
contractual terms are moved forward, earlier
in the contract. Table of contents will be
automatically added to the RPA (optional
now)
• 2. RPA will now be 10 pages and BIA will now
be only 1 page
RPA CHANGES
Top Ten
• 3. New form called the Possible
Representation of More than One Buyer or
Seller - Disclosure and Consent (PRBS) takes
the place of the DA (Disclosure and Consent
For Representation of More Than One Buyer
or Seller.
• 4. AD and PRBS will auto open with the RPA
• 5. Zipform will now automatically add a form if
you check it in the RPA
RPA CHANGES
Top Ten
• 6. Some boxes will limit you to one choice ie:
date or # of days in COE, Agency Confirmation
• 7. Overflow Addendum, allows you to start
typing in the other terms box and if you run
over will auto fill in an automatic addendum
and attaches it to the RPA
RPA CHANGES
Top Ten
• 8. Contingency removal is still active.
• 9. Removed several "Gotcha" NIGYYSOB" Including a big change to the Loan & Appraisal
contingency
• 10. Wood Destroying Pest aka Termite Report
(WPA) goes away and is no longer prenegotiated in the contract.
RPA HIGHLIGHTS
• DATE has changed from right to left - now
called "Date Prepared" (still use this as the
reference on counter offers).
• #1E - Buyer and Seller are now called "Parties"
(Brokers ARE NOT Parties to the contract)
• #2B - Important to have agency information
correct here, otherwise generate an Agency
Confirmation (AC)
• # 2C - New name for DA form - PRBS
RPA HIGHLIGHTS
• #3A - Default is to "electronically" send the
deposit (Remember when we used to call this
an "Offer to purchase and deposit receipt).
Move is away from trust fund handling.
• #3C - All Cash Offer is moved up into finance
terms ( but it stills means the buyer can and
will close with cash).
• #3F - Balance of Down Payment now
"pursuant to Escrow Holder instructions."
RPA HIGHLIGHTS
• #4D3- FHA/ VA Amendatory clause FVAC auto
added to the contract if FHA/VA financing (avoids
trying to get it later)
• #3J1 - Deals with qualifying rate instead of start
rate on ARMs (holds the buyer and lender to base
pre-qualification on real rates, not teaser rates).
• #3J2-Loan Contingency is now removed fully from
Appraisal Contingency. Don't remove Appraisal
Contingency thinking that if it doesn't appraise
you can back out even if the client would
otherwise qualify.
RPA HIGHLIGHTS
• #3J3 - Until Funding is removed as an option
(extend days longer if necessary)
• #3J5- Excess credits are not grounds for
automatic price reduction, parties agree to
disclose all credits to lenders.
• #3K - Buyer must pursue financing listed in the
contract. Seller does not have to cooperate
with alternative finance option.
RPA HIGHLIGHTS
• #4. Contingency on sale of other property, (COP) is now
based solely on the buyer, if the seller needs it the listing
agent should counter with it (new seller based form on
finding suitable property).
• #5. Addendum and Advisories: Wood Destroying Pest
Addendum WPA is NO LONGER LISTED - Must be added if
wanted or dealt with during inspection period. WPA is still
a form and can still be added. Request for repairs (RR) will
have WPA verbiage, seller's response is called the Seller
Response and Buyer's Reply to Repair Request (RRRR).
• #6. Other Terms - will auto fill overflow text in a new
addendum (be careful, this is no time to start pretending to
be an attorney).
RPA HIGHLIGHTS
• #7A. Allocation of costs focuses on requested reports,
it does not identify who will be responsible for repairs,
that is moved to the RR. - NOTE: SEPTIC, WELL & WPA,
has been removed from the checklist. NHD is default
to statutory reports, need to check to add
environmental and tax reports.
• #7B - Adds CO detectors and makes some other
changes including possible government inspections
• #7C(1)(c) Requires all parties to sign and return
Escrow instructions in 5 or _ days (VERY KEY
ADDITION, REMOVES A FOOT-DRAGGING
OPPORTUNITY).
RPA HIGHLIGHTS
• #7D4 - (Required) now makes it the seller's
responsibility for statutory HOA docs (and to
put money in escrow to get them - para 20a)
• #7D5 - (Requested) now optional who pays for
"other requested" HOA docs
• #7D9 - option for the buyer to waive Home
Owner Warranty
RPA HIGHLIGHTS
• #8 - ITEMS INCLUDED AND EXCLUDED (
Greatly Expanded)
• #8B 2,3 & 4 makes added options for the
included personal property
• #8C - fine tunes what is to be excluded and
the condition to be left behind - and what to
do with brackets.
RPA HIGHLIGHTS
• #9C - Seller remaining in possession, new
verbiage and options to add other forms to
identify change from seller to tenant, etc.
Along with a lot of warnings.
• #9F - Seller to give access and certain included
items for home automation
RPA HIGHLIGHTS
• #10 A2 - TDS and AVID are considered complete
when Seller and Listing Agent sign them and
deliver them as complete ( no sandbagging by the
buyer agent to treat it as a new disclosure). And
confirms that the BA needs to do a visual
inspection, either on the TDS or an AVID.
• #10A 4 - Contractually obligates seller to provide
SPQ or SSD
• #10F3- Buyer or seller may have to deposit funds
to pay for HOA
RPA HIGHLIGHTS
• #12A - WPA language is added to Buyer's
inspections and defines limits of WPA
inspections. Also adds finding insurance and
reviewing leases.
• #13E Makes a Homeowner's policy the norm, if
not available then the buyer will pay any increase
in costs.
• #14A adds the NSP for non action by the seller
(makes it equal with the buyer "NBP") adds Seller
to the notice to perform along with time frames
RPA HIGHLIGHTS
• #14D Expands to allow for destructive testing
by Wood Destroying Pest inspection.
• #14F Adds the Demand to Close Escrow DCE
to options on both parties, similar rules to
NBP/NSP
• #14G "AT ESCROW'S DISCRECTION" they may
be able to release deposits if the other party
fails to give mutual instructions within 10
days of notice from escrow.
RPA HIGHLIGHTS
• #18B- Long list of stuff we're not responsible for.
Defines Broker Scope of Duties
• #19- Representative Capacity - (related form RCSA)
will allow principals to sign and the signature
addendum will define their capacity. For use in
situations of Trustees, corporate officers, POA's etc.
AND that they will provide PROOF within 3 days,
showing they have the power to sign on behalf of the
entity. See the block of text right before the buyer's
signature block to elect this provision "Additional
Signature Addendum (ASA).
RPA HIGHLIGHTS
• #20A Confirms that the paying party will
deposit or otherwise pay for HOA fees upfront
• #20B Deals with FIRPTA requirements if seller
provides Escrow the correct FIRPTA info,
Escrow can/will issue a qualified substitute
form.
• #20D Escrow must notify if deposit is not
received or bounces.
RPA HIGHLIGHTS
• #21A Addresses automatic releases of
deposits, changing deposits to non
refundable, or other forfeiture, is not allowed
unless it contains other Liquidated Damages
requirements
• #22C2 Allows one party to file an action if
necessary to allow for recording of a Lis
Pendens or other notices without violating
the mediation/arbitration provision.
RPA HIGHLIGHTS
• #26 - Requires seller's "reasonable" and
written approval before any assignment.
Assignment does not automatically release
the buyer from the contract. (new form
coming, AOAA). VERY IMPORTANT TO ASSIST
WITH 1031 QI's " Qualified Intermediaries " to
complete delayed exchanges.
RPA HIGHLIGHTS
• #30B - Redefines the meaning of "agreement"
to cover all related documents.
• #30I - Allows for multiple forms of delivery.
Form RDN is phasing out. (Receipt and
Delivery of Notices).
• Past the signature block is the option for the
ASA Additional Signature addendum.
• Same options for the seller, RCSA and ASA

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