Residential Purchase Agreement Overview

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Questions and Answers

What document does the Buyer need to execute as additional security for the Seller?

A purchase agreement

A security agreement (correct)

A warranty deed

A mortgage agreement

How should acceptance of the offer be communicated to the Offeror or Offeror’s Broker?

By phone call within the acceptance period

By certified mail within the acceptance period

By delivery or fax within the acceptance period (correct)

By email within the acceptance period

What is required from the Seller before closing regarding pest control?

A structural pest control inspection report (correct)

A home warranty policy

A title deed

A mortgage approval document

What extent of cooperation is expected for an Internal Revenue Code §1031 exchange?

Cooperation is required upon written notice from either party Signup and view all the answers

Which document certifies that the sewage disposal system is functioning properly?

Certification by a licensed contractor Signup and view all the answers

What is the mediation process meant to achieve prior to any legal action?

A settlement of the dispute Signup and view all the answers

What is the limitation of the Buyer's monetary liability to the Seller in the event of a breach?

The deposit receipted in Section 1 Signup and view all the answers

What responsibility does the buyer have regarding supplemental property tax bills?

They are responsible for paying the bills directly to the Tax Collector. Signup and view all the answers

When might a buyer terminate the agreement with the seller?

If the seller cannot convey marketable title as agreed. Signup and view all the answers

What is required to transfer any personal property according to the document?

A Bill of Sale. Signup and view all the answers

What does California property tax law require when ownership of real property changes?

The property must be revalued. Signup and view all the answers

What agency maintains information about the location of gas and hazardous liquid pipelines?

United States Department of Transportation. Signup and view all the answers

Which of the following responsibilities does the seller have if the closing is canceled?

Seller must pay all reasonable escrow cancellation charges. Signup and view all the answers

Who should the buyer contact for information about transmission pipelines near their property?

The local gas utility or pipeline operators. Signup and view all the answers

What must a Buyer do within ten days after receiving the Seller's Condition of Property Disclosure?

Cancel the transaction or itemize defects Signup and view all the answers

What action can a Buyer take if the Seller fails to repair or correct noticed defects?

Reduce the purchase price by the repair cost Signup and view all the answers

What document is associated with the Seller's Transfer Fee Disclosure Statement?

RPI Form 304-2 Signup and view all the answers

Who is responsible for paying any transfer fees arising from the transaction?

The Seller Signup and view all the answers

If a Buyer wants to cancel the transaction based on the Seller's Condition of Property Disclosure, what timeframe do they have?

Ten days Signup and view all the answers

What must a Buyer do if defects are found in the property as disclosed?

Itemize the defects and notify the Seller Signup and view all the answers

Study Notes

Purchase Agreement

This form is used by a buyer's broker to present an offer to purchase residential property.
The agreement details terms of the deal, including the purchase price, financing, and closing conditions.
Items left blank are not applicable.
The date of the agreement is filled in.
The buyer(s) make a deposit to evidence their offer, payable to, .
The deposit is applied to the buyer's obligations to purchase property, located in [city] , [county], California.
The agreement includes personal property, listed in attachments.
The purchase price is comprised of details and addenda in the agreement.
Buyer agrees to pay a down payment, with financing details included. Loan approval for financing is a condition of the agreement.
Buyer can assume existing loans or debts for the property.
Financing terms, including interest rates and loan terms, are specified.
Buyer will assume or take title to existing liens and debts, including a solar improvement lien, and interest rates as well.
The purchase price balance is to be financed via trust deed.
The agreement describes conditions regarding seller's disclosures, including a property disclosure statement.
Buyer has the right to review property documents, and conditions as part of closing escrow.
Conditions for the agreement may be reviewed by the parties, including the closing date.
Buyer is required to inspect and review specific sections of the property or other details in the agreement.
Buyer is eligible to terminate the agreement based on a reasonable disapproval of certain disclosures.
If termination occurs, the parties agree to return the deposit to the relevant parties.
The buyer is responsible for transaction costs.
Purchase agreement conditions are outlined.

Acceptance and Performance

The offer is revoked if not accepted in writing within specified days.
The broker has a limited period of time to extend acceptance and performance dates.
Buyer can terminate the agreement if they are unable to secure financing on time.
The purchase is conditioned on buyer closing on another property.
Any termination of the agreement requires a written notice to the other party.

Property Conditions

Seller is required to provide various documents and reports related to the property's condition. This includes pest control reports, home inspection reports, and a certificate of occupancy, if required by local ordinances.
The property is inspected for various issues, such as functioning sewage disposal, water quality, and other relevant conditions.
If conditions are unacceptable, the buyer has the ability to terminate the agreement.
The seller is responsible for delivering property condition documents to the buyer in a timely manner.
Buyer can review documents on the property within a limited time frame, and terminate the agreement as needed.
Notice of hazards is provided (lead, environmental hazards).
Seller provides operating information regarding the property and its conditions.
Sellers disclose property information concerning the condition and compliance with rules and regulations, including the existence of an HOA, and the existence of solar liens and leases.
Buyer can review these documents, and potentially terminate the agreement, due to a reasonable disapproval.

Closing Conditions

Escrow is established to facilitate the transaction.
The parties provide escrow instructions during the transactions.
Buyer is required to pay their portion of the transaction costs.
Title will be subject to certain covenants, conditions, restrictions and easements of record.
Taxes, assessments, insurance premiums, and other expenses will be prorated.
A bill of sale will be executed for any personal property to be transferred.
If a significant condition arises before closing the transaction, then it might be possible to terminate the agreement.
Property tax bills and associated fees are paid out for the property.

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Description

This quiz covers the key elements of a residential purchase agreement, including terms such as purchase price, financing conditions, and buyer obligations. Understand the components necessary for presenting an offer to purchase property in California. Test your knowledge on the details vital for a successful real estate transaction.