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Esquire Real Estate Blog

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CAR Contract Changes

Bryan Zuetel

A significantly revised California Residential Purchase Agreement and Joint Escrow Instructions (RPA) from the California Association of Realtors will be released on Monday, November 24, 2014.  Here are three of the more significant revisions:

1. The new RPA removes the option for the parties to assign corrections for and payments of Section 1 versus Section 2 work from the Wood Destroying Pest report.  Some have decried the “blank check” for Section 1 work that a Seller would agree to in the previous RPA.  Essentially, responsibility for Section 1 and Section 2 work must be negotiated by the parties or agents during escrow with knowledge of the actual required Section 1 versus Section 2 work.

2. The default time to remove the loan contingency has been extended from 17 to 21 calendar days, while the default time for removal of the appraisal contingency remains 17 calendar days.  This change likely accounts for the necessary time between an appraisal report and approval by a lender.

3. The Buyer must disclose any credit that the Buyer receives from any source for closing or other costs that is agreed to be the Parties.  Different provisions apply if the total credit allowed by the Buyer’s lender is less than the credit amount on which the parties agree.

As your broker, you can trust that Esquire Real Estate will identify the new revisions to this form contract and advise you regarding any important, applicable contractual provisions for your real estate transaction. Check out 7 Reasons why you should choose an attorney to represent you as your broker when buying or selling real estate.