New Construction REPC Flashcards
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
A: In The Brokerage Real Estate Trust Account
“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
B: Section 1.2
new construction real estate purchase contract
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.
earnest money
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.
signature acknowledges receipt of earnest money
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.
hereinafter
Legal term meaning “from this point forward”.
substantial completion of the residence
Defined in the contract as the condition when occupancy of the residence is allowable under local law.
lot corners staked
The process in which a land survey establishes the property’s boundaries.
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
D: Section 3.5
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
B: Section 2.2
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
D: Section 4
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
C: Section 5
settlement
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.
Is cash purchase allowed?
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.
pre-construction meeting
A meeting between the buyer and the seller of new construction that verifies the specifications of the residence to be built and establishes milestones.
special assessments
An HOA may assess a fee for capital improvements.
closing
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.
survive closing
A part of the contract that is still in effect after the closing process has been completed.
MLS auto- population
In some cases, the MLS will auto-populate names into blanks on the contract forms. Be certain that these have populated correctly!
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
D: Section 6.3
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
B: Section 7
buyer’s due diligence
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.
due diligence deadline
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.
preferred lender
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.
pre-qualification letter
A letter granted by a lender that proves the buyer can take out the loan necessary to purchase the property in the transaction.
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
D: Section 9.2
the value of an agent in new construction
purchase
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.
seller warranties in new construction
Unless an alternate warranty is provided, the seller of new construction warrants that many aspects of workmanship will last for at least one year.
change order
The mutual agreement between the parties on a change to the scope of work, the price, or another term of the contract.
walk-through inspection
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.
inspection of property
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
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
A: Section 13
unavoidable delay
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.
construction compliance
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.
buyer default
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.
seller default
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.
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
B: Section 12.2
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
C: Section 6.1
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
D: Specifically Addressed In Section 1.5
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
C: Section 9.1
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
C: Section 9.2
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
A: Section 3.3
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
A: Section 3.1
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
D: Section 9.3
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)
C: Section 8.3(C)
