Presented by KEVIN HALL Broker Associate at Keller Williams Realty Gary Kent Team amp Instructor PALOMAR COLLEGE 7607585370 kth97yahoocom Course Material Available here wwwgarykentcom20141002newrpa ID: 669686
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Slide1
NEW California 2014 RPA
Presented by
: KEVIN
HALL
Broker Associate at
Keller Williams Realty, Gary Kent Team
& Instructor @ PALOMAR COLLEGE
760-758-5370
kth97@yahoo.com
Course Material Available here:
www.garykent.com/2014/10/02/new-rpaSlide2
RESIDENTIAL PURCHASE AGREEMENT (RPA) Highlights:
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 changesSlide3
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. Slide4
RPA CHANGESTop 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 Slide5
RPA CHANGESTop 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 RPASlide6
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 RPASlide7
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 pre-negotiated in the contract.Slide8
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 -
PRBSSlide9
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."Slide10
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.Slide11
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.Slide12
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).Slide13
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).
Slide14
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 Slide15
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.Slide16
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 automationSlide17
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 HOASlide18
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 framesSlide19
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. Slide20
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).Slide21
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.Slide22
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
. Slide23
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.Slide24
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