RE Purchase contract Flashcards
(26 cards)
If the house was built before 1978…
There must be a lead-based paint disclosure
What is the foreign investment in real property tax act of 1980
When a “foreign person” (non-res, alien, corporation, partnership…) may be legally required to withhold this tax at closing in order to avoid closing delays. If seller is foreign under FIRPTA, they must advise the buyer in writing
HOA disclosures
-they need to know if the HOA is being sued.
-if the HOA is solvent (not on the brink of bankruptcy)
- what the fees are or current decisions underway
Due diligence
The buyers review and approval of all the contents of the sellers disclosure as well s any additional tests and evaluations and verifications deemed necessary by the buyer.
Who’s responsibility is it to do due diligence?
The buyer’s
Agents provide the buyer with the buyer’s due diligence checklist. Be the guide, not the source.
what is the buyer’s right to cancel?
if the buyer recieved written notice from the lender or the appraiser that the property has appraised for less than the purchase price, the buyers may canvel the REPC by providing written notice to the seller no later than the financing and appraisal deadline. the earnest money shall then be released to the bbuyer without the requirement of further written authorization from seller.
when would there be a failure to cancel?
if the REPC is not cancelled as provided in section 8.2, the buyer shall be deemed to have waived the appraisal condition. The earnest money shall become non-refundable.
what do the buyer’s rights look like when they cancel BEFORE the financing and appraisal deadline?
If the buyer aint satisfied after the due diligence deadline but before the financing and appraisal deadline, an amount as specified of the buyer’s earnest money will go to the seller and the remaining amount will be returned to the buyer.
When does the earnest money get released to the seller?
When the REPC is cancelled (8.3)(b)(ii), buyer agrees that all the buyer’s easnest money deposits shall be released to the seller without the requirement of without the further written authorization from the buyer. The seller agrees to accept the earnest money as liquidated damages.
what section in the REPC is the warranty plan?
the one year warranty plan is in section 10
what are the details of the final pre-settlement walk through inspection?
No earlier than 7 days prior to settlement, the buyer can conduct a final walk through inspection to deem that the property is “as represented” if the buyer does not complete the walk-through, it is the seller’s responsibility to make sure all the things are taken care of and completed. The failure of the buyer to do a walk through does not negate the seller’s responsibility to make sure that contractually they delivered everything they said they would.
what about alterations/improvements to the property?
Even if the seller thinks that a change will improve the property, they cannot make any substantial changes (painting walls, landscaping…) without prior written consent from the buyer.
What about Property management agreement?
No changes to any existing property management agreement and no new PMA shall be made without prior written consent from the buyer.
What if the seller did short-term rental bookings? (ex:Airbnb)
the seller may not, after the seller disclosure deadline, obtain any new rental bookings without prior written consent from the buyer.
What about the authority of signers?
If the buyer or seller is a corporation, partnership, trust, estate, limited liability company, or other entity, it is wise to obtain the documents relating to that corporation to find out who the authority lies with, to make sure that the person signing has the authority to bind the parties.
What can a seller do if a buyer defaults?
a) can cancel the REPC and retain the earnest money as liquidated damages,
b) maintain the earnest money and sue the buyer to enforce the REPC
c) return the earnest money and pursue any other remedies at law
What can a buyer do if a seller defaults?
a) cancel the REPC and return the earnest money. can also receive liquidated damages (up to equal worth of the earnest money)
b) Maintain the earnest money and sue the seller to enforce the REPC
c) Return the earnest money to and pursue any other remedies at law.
who pays for attorney fees?
in litigation or arbitration, the losing party pays the winning party’s costs and attorney fees. Attorney fees shall not be awarded for participating in mediation.
Notices must be:
-in writing
-signed by the buyer or seller giving notice
-received by the buyer or seller no later than the applicable date as referenced in the REPC
Who is responsible for obtaining casualty and liability insurance coverage on the property?
the Buyer
if prior to closing any part of the property is damaged… what happens?
it shall be borne by the seller.
If the cost is more than 10% of the purchase price, either party can cancel the REPC with written notice. The earnest money is returned to buyer.
what time of day must extensions be agreed to in writing?
According to REPC section Time is of the essence, its at 5:00pm Mountain Time according to the calender date.
