New Construction REPC

Question 1

The Earnest Money Section of the New Construction Real Estate Purchase Contract plainly spells out that the Earnest Money will be deposited:
A: In The Brokerage Real Estate Trust Account
B: In The Builder’s Brokerage Trust Account
C: In The Title Company’s Escrow Account
D: In Any Account On Which The Parties Agree

Answer 1

A: In The Brokerage Real Estate Trust Account

Question 2

“Home Design” can be found in which Section of the New Construction REPC?
A: Section 1.1
B: Section 1.2
C: Section 1.3
D: Section 1.6

Answer 2

B: Section 1.2

Question 3

new construction real estate purchase contract

Answer 3

A contract used when property does not have a certificate of occupancy issued as of the writing of the real estate purchase contract, i.e. new construction.

Question 4

earnest money

Answer 4

A deposit made to a seller showing the buyer’s good faith in a transaction. It is typically held jointly by the buyer and seller in escrow. If one party defaults on the transaction, the other often keeps the money.

Question 5

signature acknowledges receipt of earnest money

Answer 5

Do not sign for receipt of earnest money unless you have actually received it! Many real estate agents have gotten in trouble because they were “on the hook” for money they didn’t have.

Question 6

hereinafter

Answer 6

Legal term meaning “from this point forward”.

Question 7

substantial completion of the residence

Answer 7

Defined in the contract as the condition when occupancy of the residence is allowable under local law.

Question 8

lot corners staked

Answer 8

The process in which a land survey establishes the property’s boundaries.

Question 9

The Section in the New Construction REPC that defines “Closing” can be found in:
A: Section 3.1
B: Section 3.2
C: Section 3.3
D: Section 3.5

Answer 9

D: Section 3.5

Question 9

The “Construction Deposit” can be found in which Section of the New Construction REPC?
A: Section 2
B: Section 2.2
C: Section 3.1
D: Section 3.5

Answer 9

B: Section 2.2

Question 10

The Section in the New Construction REPC that specifically spells out how “Possession” shall be handled post Closing can be found in Section:
A: Section 3.1
B: Section 3.2
C: Section 3.3
D: Section 4

Answer 10

D: Section 4

Question 11

The Section in the New Construction REPC that confirms the prior written receipt of agency disclosure can be found in:
A: Section 3
B: Section 4
C: Section 5
D: Section 6

Answer 11

C: Section 5

Question 12

settlement

Answer 12

Defined as the completion of the following: buyer and seller have signed and delivered all required documents, and monies have been delivered by the buyer or seller to the other party.

Question 13

Is cash purchase allowed?

Answer 13

Cash purchase of homes may or may not be allowed, depending on the circumstances. Be very sure of whether it is allowed or not before closing.

Question 14

pre-construction meeting

Answer 14

A meeting between the buyer and the seller of new construction that verifies the specifications of the residence to be built and establishes milestones.

Question 15

special assessments

Answer 15

An HOA may assess a fee for capital improvements.

Question 16

closing

Answer 16

Defined as the completion of the following: settlement has been completed, the proceeds of any new loan have. been delivered by the lender to the seller or escrow, and applicable closing documents have been recorded in the office of the county recorder.

Question 17

survive closing

Answer 17

A part of the contract that is still in effect after the closing process has been completed.

Question 18

MLS auto- population

Answer 18

In some cases, the MLS will auto-populate names into blanks on the contract forms. Be certain that these have populated correctly!

Question 19

The Section in the New Construction REPC dealing with Protection Against Liens and Civil Action can be found in:
A: Section 4.3b
B: Section 5
C: Section 6.1
D: Section 6.3

Answer 19

D: Section 6.3

Question 20

The Section in the New Construction REPC dealing with Seller Disclosures can be found in:
A: Section 6.2
B: Section 7
C: Section 8.1a
D: Section 8.2b

Answer 20

B: Section 7

Question 21

buyer’s due diligence

Answer 21

Defined as: buyer’s review and approval of seller disclosures, tests, evaluations, and verifications of the property by the buyer. Possible evaluations include environmental issues, water quality, HOA fees, or sex offenders residing nearby. If the due diligence results are unacceptable, the buyer has the right to cancel the REPC or resolve objections
in writing no later than the Due Diligence Deadline.

Question 22

due diligence deadline

Answer 22

If the buyer does not cancel the REPC or resolve objections arising from Due Diligence by the deadline, he or she waives the condition in question. For example, missing this deadline means the buyer would no longer be able to back out upon discovering that the water quality at the residence is poor.

Question 23

preferred lender

Answer 23

The purpose of a preferred lender is to ensure that the buyer pre-qualifies for a loan with a lender that the seller knows and trusts to be reliable. A buyer making use of a loan must get pre-qualification from this lender but does not have to actually use them.

Question 24

pre-qualification letter

Answer 24

A letter granted by a lender that proves the buyer can take out the loan necessary to purchase the property in the transaction.

Question 25

The Section in the New Construction REPC that addresses the Pre-Construction Meeting can be found in:
A: Section 8.4a
B: Section 8.4b
C: Section 9.1
D: Section 9.2

Answer 25

D: Section 9.2

Question 26

the value of an agent in new construction
purchase

Answer 26

As an agent representing a buyer of new construction, you can make sure that costs and specifications are completed in writing to make sure that the property is as the buyer expects at closing.

Question 27

seller warranties in new construction

Answer 27

Unless an alternate warranty is provided, the seller of new construction warrants that many aspects of workmanship will last for at least one year.

Question 28

change order

Answer 28

The mutual agreement between the parties on a change to the scope of work, the price, or another term of the contract.

Question 29

walk-through inspection

Answer 29

If minor work still needs to be done on the home when closing occurs, the buyer may hold enough payment in escrow to cover the cost of that work. However, this typically does not go over well.

Question 30

inspection of property

Answer 30

Buyers have the right to reasonable access to the property to inspect it. However, construction sites are dangerous, and the buyer’s presence may pose a hindrance to construction. Do not encourage the buyer to visit the construction site during the day
while work is being done, unless invited by the seller to do so

Question 31

The Section in the New Construction REPC addressing “Unavoidable Delays” can be found in:
A: Section 13
B: Section 14
C: Section 15
D: Section 16

Answer 31

A: Section 13

Question 32

unavoidable delay

Answer 32

If construction is delayed for reasons beyond the control of the seller, the deadline for substantial completion of the property is extended for a reasonable period of time.

Question 33

construction compliance

Answer 33

The construction of the residence must meet federal, state, and local standards and follow the site plan that the buyer and seller have agreed to.

Question 34

buyer default

Answer 34

If the buyer defaults on the purchase, the seller may cancel the REPC and keep the earnest money deposit, sue the buyer to enforce the REPC, or return the deposit and pursue other remedies available by law.

Question 35

seller default

Answer 35

If the seller defaults on the purchase, the buyer may cancel the REPC and receive liquidated damages, sue the seller to enforce the REPC, or accept a return of money and pursue other
remedies available by law.

Question 36

The Section in the New Construction REPC that defines Substantial Completion can be found in which Section of the REPC?
A: Section 12.1
B: Section 12.2
C: Section 12.3
D: Section 12.4

Answer 36

B: Section 12.2

Question 37

The Section in the New Construction REPC that states that the Seller has fee title to the property and promises to convey marketable title to the Buyer can be found in which Section of the REPC?
A: Section 4.3
B: Section 5
C: Section 6.1
D: Section 6.2

Answer 37

C: Section 6.1

Question 38

In the New Construction REPC, water rights and water shares are:
A: Specifically Addressed In Section 1.2
B: Specifically Addressed In Section 1.3
C: Specifically Addressed In Section 1.4
D: Specifically Addressed In Section 1.5

Answer 38

D: Specifically Addressed In Section 1.5

Question 39

The Section in the New Construction REPC dealing with Plans and Specifications can be found in:
A: Section 8.2b
B: Section 8.3c
C: Section 9.1
D: Section 11

Answer 39

C: Section 9.1

Question 40

The Section in the New Construction REPC that addresses the Pre-Construction Meeting can be found in:
A: Section 8.4a
B: Section 8.4b
C: Section 9.2
D: Section 9.3

Answer 40

C: Section 9.2

Question 41

The Section in the New Construction REPC that addresses Construction Compliance can be found in:
A: Section 12.1
B: Section 12.2
C: Section 12.3
D: Section 12.4

Answer 41

A: Section 3.3

Question 42

The Section in the New Construction REPC that defines “Settlement” can be found in:
A: Section 3.1
B: Section 3.2
C: Section 3.3
D: Section 4.1

Answer 42

A: Section 3.1

Question 43

The Section in the New Construction REPC addressing Change Orders can be found in:
A: Section 8.3
B: Section 8.4
C: Section 9.1
D: Section 9.3

Answer 43

D: Section 9.3

Question 44

The section in the New Construction REPC addressing the buyer obtaining a Pre-qualification letter from the builder’s preferred lender can be found in:
A: Section 8.3(A)
B: Section 8.3(B)
C: Section 8.3(C)
D: Section 8.3(D)

Answer 44

C: Section 8.3(C)