Understanding the Residential Purchase Agreement - A "Must Read" For Buyers
By Antonio M Cardenas Real Estate Broker.
The heart and soul of every real estate transaction here in California is a 10-page document called the California Residential Purchase Agreement and Joint Escrow Instructions (RPA). We use this document to present to the sellers an offer for the house on behalf of the buyers. The RPA is about 95% preprinted. Most people do not read everything they sign. However, this time, I encourage you, Mr/Mrs home buyer, to read it in its entirety and educate yourself about the key components of this legal contract.
The RPA is a multi-functional document. It contains the essential terms and conditions for the formation of a real estate contract. When signed by both the buyer and seller, it becomes a legal, binding agreement, and the communication of the acceptance is received. The RPA is adequately detailed to address most issues involved in the typical purchase and sale of real property. There is a fundamental reason for each clause in this document. Buyers and Sellers should read every clause on every page.
Among others, the fully signed RPA serves as A) A bona fide offer to purchase real property. B) It represents a receipt for the good faith earnest money deposit. C) It also provides written joint escrow instructions from buyer and seller to the escrow or closing company. D) This document includes a Mediation and Arbitration agreement between the parties. F) It confirms the Agency Disclosures & Relationships.
There are many questions on every real estate transaction, and the RPA contains in their printed form most of the answers, a simple checkmark answers some on a small box. For example, this checkmark indicates which party pays for what, and that can be hundreds, maybe thousands of dollars to one of the parties, so you must read every single line of the agreement and understand your rights and duties before you sign. Home Buyers should get a blank RPA to read it BEFORE they go out to look for homes to buy. Call me, and allow me to guide you through your next real estate purchase.