Questions and Answers
One exception to using the state approved REPC is:
The agent's legal authority encompasses all of the following, except:
In what form must the earnest money be delivered?
It's negotiable
How many days does the broker have to deposit the earnest money once it's received?
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Which of the following is NOT included in the REPC as an included item?
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Water shares are included in the sale unless otherwise stated.
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If the buyer presents an all cash offer, may he later finance the transaction without the seller's consent?
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Who pays for escrow/closing services?
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Section 5 discloses all the agents involved in the transaction.
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Under section 6, if the ALTA Homeowner's Policy is not available through the issuing agent, what occurs?
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Which of the following is NOT something the seller needs to disclose under section 7?
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The seller has to provide all the disclosures in a hard copy and they can't be in electronic form.
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If the buyer wishes to cancel the REPC after their inspection of the property, how can they cancel the contract?
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If the buyer does not give notice about the appraised value before the appraisal deadline, then the buyer can do what?
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What happens to the earnest money if a buyer fails to obtain the proper financing by the financing deadline and now cancels the contract?
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The buyer and seller can opt to add additional earnest money to be due on the due diligence deadline.
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Which of the following is NOT a specific addenda that a buyer and seller can add to the REPC from section 9?
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The property is sold 'as-is' without implied or expressed warranties of any kind, but the parties can agree to a home warranty plan.
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Who is responsible for the cost of mediation?
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From the time of acceptance, the seller cannot do any of the following without written consent of the buyer, except:
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If the seller defaults on the REPC, what are the remedies offered to the buyer?
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May attorney fees be awarded in mediation?
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May the buyer assign the REPC to a personally owned LLC without the seller's permission?
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All of the following are required for a cancellation notice of the REPC except:
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Which of the following is not required to adhere to the appraisal and finance deadline?
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Which of the following is not a performance deadline in the REPC?
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May parties to the contract use an electronic signature to execute the contract?
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If the buyer defaults, the seller may do which of the following?
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If the seller sues the buyer over an improper cancellation, who pays for attorney fees?
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May a buyer assign the REPC over to his/her family trust?
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In Washington, what standard of care did the courts decide that real estate agents are held to in drafting contracts?
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Why should drafting contracts be considered very serious business?
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As a general rule, when are you considered to be practicing law?
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What must agents be able to do to help safeguard a client's interests in a transaction?
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What is mutual assent actually known as in the elements of a contract?
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Up to what time can you withdraw a unilateral offer?
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When does acceptance occur for the REPC?
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What happens to an offer after a counter offer is made?
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Can an offer be revived after rejection?
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If there is a breach of contract, is the other non-breaching party released?
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How should an agent present multiple offers to a client?
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What does tender mean in terms of a contract?
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An offeror is always the buyer and the offeree is always the seller.
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Susan wanted to buy Ray's prized coin collection, but she knew he would never sell it. Can she force the sale of the coin collection?
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If Sally makes an offer to Jenny, and Jenny wants to make a counteroffer, what is wrong with this situation?
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Study Notes
REPC Exceptions & Authority
- A state-approved REPC is not used if the client's attorney drafts a contract.
- An agent's legal authority includes filling in blanks but excludes drafting the entire contract.
- Earnest money can be delivered in any negotiable form.
- Brokers have 4 calendar days to deposit earnest money once received.
Included Items & Water Shares
- Shelving is not included in the REPC.
- Water shares are automatically included in a sale unless expressly excluded.
Financing & Escrow
- A buyer can finance a previously all-cash offer without needing seller consent.
- Escrow and closing service fees are shared between buyer and seller.
Disclosures & Notices
- Section 5 confirms agency relationships but does not disclose all agents in a transaction.
- Under Section 7, sellers need to disclose lease agreements, environmental issues, and title commitments but not previous year’s property taxes.
- Sellers can provide disclosures electronically.
REPC Cancellation & Performance Deadlines
- Buyers can cancel the REPC post-inspection by giving written notice before the due diligence deadline.
- If the buyer misses the appraisal notice, they can file notice within 3 days.
- Earnest money is forfeited to the seller if the buyer fails to secure financing by the deadline.
- Additional earnest money can be agreed upon by the buyer and seller before the due diligence deadline.
Addenda & Contract Terms
- Not all addenda are allowed, e.g., earnest money receipt confirmation is not a specific addendum.
- Properties can be sold "as-is," but home warranty agreements can be negotiated.
Mediation & Agency Assignments
- Both seller and buyer share mediation costs.
- Unilateral defaults by buyers allow sellers to sue for damages and retain earnest money.
- Buyers can assign the REPC to an LLC without seller's permission.
Legal Standards & Contract Management
- In Washington, real estate agents drafting contracts must meet the same standards as attorneys.
- Drafting contracts is crucial as it affects clients' contractual rights; thus, agents must understand contract details.
- Mutual assent involves offer and acceptance, and an offer can be withdrawn before performance begins.
Offers and Counteroffers
- Acceptance of the REPC is complete upon signature and communication to the offeror.
- A counteroffer nullifies the original offer, and offers can only be renewed if both parties agree post-rejection.
- Breaching a total contract releases the non-breaching party, while a partial breach does not.
Presenting Offers & Tendering
- Agents are obligated to present all offers to clients promptly and fairly.
- "Tender" refers to the act of presenting an offer in a contractual context.
Misrepresentation & Legal Implications
- The offeror and offeree roles are determined by who makes or receives the offer, not fixed by buyer/seller labels.
- Contracts lacking mutual intent (e.g., signed under false pretenses) may not be enforced.
- No individual can change the language of the REPC; doing so is illegal in counteroffers.
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Test your knowledge of the Real Estate Purchase Contract (REPC) with these flashcards. This quiz covers essential concepts such as exceptions to using the REPC and the legal authority of agents. Perfect for real estate professionals seeking to reinforce their understanding.