New Residential Purchase Contract In Effect
The California Association of Realtors has updated and modified the Residential Purchase Agreement which went into effect on April 28th. Quite a few changes were made to the document and most realtors and legal professionals agree the document is easier to navigate and properly spells out issues that caused problems in the past.
Here is a quick overview of some of the changes:
*Separate paragraphs for the first and second loan.
*The loan period no longer needs to be specified.
Wood Destroying Pest Inspection
*The allocation paragraph only specifies who pays for the inspection only. The WPA addendum can still be attached to the contract but the new contract makes it easier for termite costs to be negotiated. Seller’s will probably start putting caps on what they are willing to pay for in terms of termite work.
*Defaults to 5pm on the date of the close of escrow
Contingencies and Cancellations
*Last date of a contingency or cancellation period CANNOT fall on a Saturday, Sunday or holiday. EX: If the last date of the contingency period falls on a Saturday and Monday is a holiday, the contingency period will actually extend until Tuesday.
*The notice to perform is 2 days and not 24 hours.
Other quick hitters:
*Delivery to mean by personal receipt by principal or agent, whether sent by fax, email or other. It was not clearly defined before.
*Buyer’s investigation: Language added to clarify that buyer is obligated to turn over reports to the seller even after termination of the agreement.
*Title and Vesting: Listing agent’s need to get a statement of information from clients within three days of opening escrow since the contract requires the seller to give a statement of identity or similar form to title at the commencement rather than the end.
Lots of other items can be discussed but no need to bore you further. However, It is very important that you work with an agent who properly understands the new agreement and can advise you correctly. Most major companies like Prudential have required agents to attend seminars led by the company’s general counsel so they can properly advise clients.