residential purchase agreement
Q: I have not purchased a home for many years and my agent mentioned that the California Association of Realtors has revised the standard residential purchase agreement. Is this true and how has the agreement been changed?
A: The California Residential Purchase Agreement and Joint Escrow Instructions (“RPA”) has not been changed for many years, but a new version has been issued by the CAR effective April 2010 that makes several significant improvements that should help to make the agreement easier to use and understand. Some of the improvements are to the order of the paragraphs and others are to the content of the provisions. The RPA constitutes an offer and if it is accepted without any counter‐offers, it will constitute a binding contract. Therefore, it is the most important document in the transaction that is supplemented by the other forms in the transaction.
The RPA is prepared by the buyer of the residence, usually with the assistance of an agent. The agency relationship paragraphs have been moved from the end of the RPA to the first page, and this is important because the disclosure and confirmation of the real estate agency relationships is one of the more problematic issues in the transaction, especially if a single agent is representing both the seller and buyer. By moving the agency paragraph to the first page, it assists both the seller and buyer to confirm their respective agency relationships prior to completing the other sections of the RPA. Continue reading