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Real Estate > REPC 2 > Flashcards

REPC 2 Flashcards

1
Q

The Section in the REPC specifically detailing all of the Seller Disclosures that the Seller will provide to the Buyer can be found in:
A: Section 6
B: Section 7
C: Section 8.1(A)
D: Section 8.1 (B)

A

B: Section 7

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2
Q

The Section in the REPC dealing with the Foreign Investment in Real Property Tax Act can be found in:
A: Section 7
B: Section 9
C: Section 11
D: Section 15

A

A: Section 7

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3
Q

The Section in the REPC dealing with the Buyer’s Conditions of Purchase can be found in:
A: Section 7
B: Section 8
C: Section 9
D: Section 10

A

B: Section 8

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4
Q

Why is the due diligence process so crucial?
A: Consists Of The Buyer’s Review And Approval Of All The Content Pertaining To The Transaction
B: Length Of Time To Close The Transaction
C: Communication Between Buyer And Seller
D: Communication Between Agent And Buyer

A

A: Consists Of The Buyer’s Review And Approval Of All The Content Pertaining To The Transaction

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5
Q

seller disclosures

A

seller must fill out completely and honestly.
Err on the side of disclosure. If in doubt, disclose it.

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6
Q

The seller should provide the following:

A
  • Seller Property Condition Disclosure for the Property
    Lead-Based Paint Disclosure for the Property
    Commitment for Title Insurance as referenced in Section 6.1
  • Copy of any restrictive covenants (CC&Rs), rules and regulations affecting the property
  • Copy of the most recent minutes, budget and financial statement for the homeowner’s association, if any
  • Copy of any long -term tenant lease or rental agreements affecting the property not
    expiring prior to closing
  • Copy of any short-term rental booking schedule (as of the Seller Disclosure Deadline) for guest use of the Property after closing
    -Copy of any existing property management agreements affecting the Property
  • Evidence of any water rights and/or water shares (as referenced in Section 1.4)
    -Written notice of any claims and/or conditions known to Seller relating to any environmental problems and building or zoning code violations
  • in general, the sell or disposition of the U.S. real property interest by a foreign investment in Real Property Tax Act of 1980 (FIRPTA)
    -Act of 1980 (FIRPTA) Any other items that you would like to include as part of the Seller Disclosures (12
    months of utility bills for example
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7
Q

lead-based paint disclosure for the property

A

Only if the property was built prior to 1978

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8
Q

foreign investment in real property tax
act of 1980 (FIRPTA)

A

A “foreign person” includes a non-resident alien, individual, foreign corporation, partnership, trust or estate. If FIRPTA applies to Seller, the seller is advised that buyer or other qualified substitute may be legally required to withhold this tax at closing in order to avoid closing delays. If Seller is a foreign person under FIRPTA, Seller shall advise Buyer in writing.

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9
Q

why provide copies of most recent minutes, budget and financial statement for the homeowner’s association?

A
  • Lender and buyer needs to know if the HOA is being sued.
  • If the HOA is solvent - not on the brink of bankruptcy.
  • if they made the decision that things are going to have to bee assed, or there could be any additional fees that they are responsible for
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10
Q

buyer’s conditions of purchase

A

[ ]IS vs[ ] IS NOT conditioned upon the buyers due diligence as defined in section 8.1 (a)
by checking is this allows the buyer to cancel based on the due diligence if they find something they don’t like. Otherwise, they cannot cancel based on Due diligence

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11
Q

due diligence

A

Consists of the Buyer’s review and approval of all the contents of the Seller’s Disclosure as well as any additional tests and evaluations and verifications deemed necessary by the Buyer such as found in the Buyer’s Due Diligence Checklist.

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12
Q

buyer’s right to cancel or resolve objections

A

If the Buyer determines that the results of the Due Diligence are unacceptable, may cancel the REPC (before the deadline) by written notice to the Seller (Notice of Cancellation) and the earnest money shall be released back to the Buyer or they still want the property as long as the Seller is willing to resolve in writing any objections found arising from Due Diligence before the deadline. (Example: Getting the roof fixed at the Seller’s expense) If Buyer fails to cancel or resolve issue before the deadline - the buyer shall be deemed to waive the Due Diligence condition. Earnest money then becomes nonrefundable.

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13
Q

The due diligence consists of the buyer’s review and approval of ALL the contents of the seller’s disclosure as well as additional tests/evaluations.
A: Depends On The Situation
B: False
C: True
D: None Of The Above

A

C: True

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14
Q

The Section in the REPC dealing with the specific Due Diligence Items can be found in:
A: Section 8.1
B: Section 8.1(A)
C: Section 8.1(B)
D: Section 8.1 (C)

A

B: Section 8.1(A)

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15
Q

The Section in the REPC dealing with the Financing Condition can be found in:
A: Section 8.1
B: Section 8.2
C: Section 8.3
D: Section 8.4

A

C: Section 8.3

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16
Q

Who is responsible for the due diligence period?
A: The Agent And Broker
B: The Buyer
C: The Sellar
D: No One

A

B: The Buyer

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17
Q

whose responsibility is it to do due diligence?

A

Buyer’s Responsibility. Agent provides the Buyer with the Buyer’s Due Diligence Checklist. Be a source of the source- not the source. Guide people where to go. Give
resources, links to websites, etc.

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18
Q

appraisal condition

A

Buyer’s obligation to purchase the Property [ ] IS [] IS NOT conditioned upon the property appraising for not less than the Purchase Price. If checked in the affirmative Section 8.2(a) and 8.2(b) apply, otherwise they do not. An example of “Is Not” is if the Buyer is paying cash.

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19
Q

buyer’s right to cancel

A

If upon completion of a licensed appraisal, the Buyer received written notice from the Lender or the appraiser that the Property has appraised for less than the Purchase Price, the Buyer may cancel the REPC by providing written notice to the Seller no later than the Financing & Appraisal Deadline. The earnest Money shall then be released to the Buyer without the requirement of further written authorization from the seller

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20
Q

failure to cancel

A

If the REPC is not cancelled as provided in Section 8.2, the Buyer shall be deemed to have waived the Appraisal Condition. The Earnest Money shall become non-refundable.

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21
Q

financing condition

A

Box (a) is checked if the Buyer is paying cash and no financing is needed or (b) should be checked if financing is needed.

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22
Q

buyer’s right to cancel BEFORE the financing &
appraisal deadline

A

If the Buyer is not satisfied with the terms of contract (interest rate, monthly mortgage payment amount, etc.) after the due diligence deadline has passed but before c. after Financing & Appraisal Deadline, an amount as specified of the Buyer’s Earnest Money will go to the Seller and the remaining amount will be returned to the Buyer.

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23
Q

buyer’s right to cancel AFTER the financing &
appraisal deadline

A

If the Financing & Appraisal Deadline has passed and the Buyer fails to obtain the loan, then the Buyer shall not be obligated to purchase the Property and the Buyer or Seller may cancel the REPC by providing written notice to the other party.

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24
Q

earnest money deposits) released to
seller

A

If the REPC is cancelled as provided in Section 8.3 (b)(ii), Buyer agrees that all of the Buyer’ Earnest money deposits) shall be released to the Seller without the requirement of without the further written authorization from the Buyer. The Seller agrees to accept the Earnest Money as liquidated damages.

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25
Q

additional earnest money deposit

A

The buyer can put additional Earnest Money down to “Sweeten the deal” if the REFC has not been previously cancelled by the buyer as provided in section 8.1 8.2 and 8.3 as applicable, not later than the Due diligence deadline or the Financing & Appraisal Deadline, whichever is later, then the Additional Earnest Money Deposit shall be credited toward the Purchase Price at closing. This is often now multi-offers are won.

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26
Q

The Section in the REPC dealing with the Home Warranty plan can be found in:
A: Section 9
B: Section 10
C: Section 11
D: Section 12

A

B: Section 10

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27
Q

What does the property managment agreement entail?
A: No Changes To Any Existing Property Management Agreement And No New Property Agreement Shall Be Made W/Out Prior Agreement
B: Giving The Contract To The Buyer
C: Putting In All The Details Of The Agreement To Manage The Contract
D: Managing Property Management Agreement With The Seller Only

A

A: No Changes To Any Existing Property Management Agreement And No New Property Agreement Shall Be Made W/Out Prior Agreement

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28
Q

addenda

A

Check the appropriate box if the addenda comes as part of the initial offer. If any addenda comes later it will not be addresses in section 9

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29
Q

home warranty plan

A

A very common seller concession is to provide a 1 year Home Warranty Plan. Fill in all four blanks and the amount.

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30
Q

condition of property/buyer acknowledgements

A

Buyer acknowledges and agrees that they are purchasing the Property “as-is” without any warranty, and that they have had an opportunity to completely inspect the property. The Buyer is relying wholly on the Buyer’s own judgement. These provisions should survive Closing.

31
Q

condition of property/seller acknowledgements

A

Seller agrees to…
-disclose in writing any defects of the Property that materially affects the
value
-provide a Seller Property Condition Disclosure
-deliver Property to the Buyer in the same condition as it was on the date of Acceptance
-remove all personal belongs and broom clean the property
-repair any moving-related damages at Seller’s expense

32
Q

final pre-settlement walk through inspection

A

No earlier than / days prior to Settlement, the Buyer can conduct a final walk through inspection to deem that the Property is “as represented”. If the Buyer does not complete the walk-through, it is the Seller’s responsibility to make sure all the things are taken care of and completed. The failure of the Buyer to do a walk through does not negate the Seller’s responsibility to make sure that contractually they delivered everything they said they would.

33
Q

changes during transaction:

A

Seller agrees that from the date of acceptance to the date of closing the following additional items apply:
* Alterations/Improvements to the Property
* Financial Encumbrance/Changes to the Legal Title
* Property Management Agreement
* Long-Term Lease or Rental Agreements
* Short-Term Rental Bookings

34
Q

alterations/ improvements to the property

A

Even if the Seller thinks that a change will improve the property, they cannot make any substantial changes (painting walls, landscaping etc.) without prior written consent from the Buyer.

35
Q

financial encumbrance/ changes to the legal
title

A

The Seller cannot takeout any new loans (Home Equity Line of Credit) and cannot make any changes to the legal title of the Property without prior written consent from the Buyer.

36
Q

property management agreement

A

No changes to any existing Property Management Agreement and no new Property Management Agreement shall be made without prior written
consent from the Buyer.

37
Q

long-term lease or rental agreements

A

No changes to any existing Lease or Rental Agreement and no new Lease or Rental Agreement shall be made without prior written consent from the Buyer.

38
Q

short-term rental bookings

A

Seller may not, after the Seller Disclosure Deadline, obtain any new rental bookings without prior written consent from the Buyer.

39
Q

The Section in the REPC dealing with the Authority of Signers can be found in:
A: Section 12
B: Section 13
C: Section 14
D: Section 15

A

B: Section 13

40
Q

The Section in the REPC specifically defining “Default” can be found in:
A: Section 15
B: Section 16
C: Section 17
D: Section 18

A

B: Section 16

41
Q

What are the important parts of notices?
A: All Notices Must Be In Writing, Signed By Buyer Or Seller By The Respective Dates
B: Only Be In Writing
C: Divided Into Different Categories
D: Provided Proper Paperwork To The Buyer

A

A: All Notices Must Be In Writing, Signed By Buyer Or Seller By The Respective Dates

42
Q

Notices, at all times must be in:
A: Writing
B: Verbal Agreement
C: Dialogue Between The Parties
D: Some Sort Of A Communication

A

A: Writing

43
Q

authority of signers

A

If the Buyer or Seller is a corporation, partnership, trust, estate, limited liability company, or other entity, it is wise to obtain the documents relating to that corporation to find out who the authority lies with, to make sure that the person signing has the authority to bind the parties

44
Q

Complete Contract

A
  • Everything and all negotiations that you want to be valid and binding have to be put in writing. The REPC constitutes the entire contract and supersedes and replaces any and all prior documents and negotiations.
45
Q

mediation

A

Discuss with broker on which box to check. A process in which parties meet with an impartial person who helps resolve the dispute informally and confidently. both parties must agree on the outcome. Both parties share equally the cost of mediation. If mediation fails, the other procedure and remedies under the REPC shall apply. The provisions of mediation shall survive Closing.

46
Q

buyer default

A

If the Buyer defaults the Seller may: (a) cancel the REPC and retain the Earnest Money as liquidated damages, (b) maintain the Earnest Money and sue the Buyer to enforce the REPC (specific performance), or (c) return the Earnest Money and pursue any other remedies at law.

47
Q

seller default

A

If the Seller defaults the Buyer may: (a) cancel the REPC and return the Earnest Money. Buyer may also elect from the Seller, as liquidated damages, the sum equal to the Earnest money deposit, (b) maintain the Earnest Money and sue the Seller to enforce the REPC (specific performance), or (c)return the Earnest Money to and
pursue any other remedies at law.

48
Q

attorney fees and cost governing law

A

In the event of litigation or arbitration, the losing party shall pay the winning party’s costs and attorney fees shall not be awarded for participating in mediation. These provisions shall survive Closing.

49
Q

no assignment

A

If the Buyer wants to assign or transfer the REPC to someone else, then that needs the Seller’s prior written consent.

49
Q

notices must be:

A
  • Be in writing
  • Signed by the Buyer or Seller giving notice * Received by the Buyer or Seller no later than
    the applicable date as referenced in the REPC
50
Q

specific performance

A

Court require the Buyer to go through with the
purchase.

51
Q

The Section in the REPC dealing with Insurance and Risk of Loss can be found in:
A: Section 9
B: Section 13
C: Section 15
D: Section 20

A

D: Section 20

52
Q

The Section in the REPC that specifically states that all references to “days” in the REPC specifically refer to calendar days can be found in:
A: Section 18
B: Section 20
C: Section 21
D: Section 23

A

C: Section 21

53
Q

The Section in the REPC that specifically defines “Acceptance” can be found in:
A: Section 12
B: Section 15
C: Section 23
D: Section 24

A

C: Section 23

54
Q

When it comes to offer and time of acceptance it is imperative that
A: There Is Reasonable Amount Of Time To Respond
B: It Should Be Done Immediately
C: There Should Be No Communication
D: There Will Be A Delayed Response

A

A: There Is Reasonable Amount Of Time To Respond

55
Q

insurance & risk of loss

A

As of Closing, Buyer is responsible for obtaining casualty and liability insurance coverage on the Property.

56
Q

risk of loss

A

If prior to closing any part of the Property is damaged by fire, vandalism, flood, earthquake, or act of God, the risk shall be borne by the Seller. If the cost is more than 10% of the Purchase Price, either Seller or Buyer may elect to cancel the REPC by providing written notice. In this instance, the Earnest Money Deposit, shall be
returned to the Buyer.

57
Q

time is of the essence

A

Extensions must be agreed to in writing by all parties.
Performance under each section of the REPC, which references a date, shall be require he 5:00 pm Mountain Time. The term days and calendar days shall be counted on the day following the event.

58
Q

electronic transmission and counterparts

A

Physically or electronic signatures are deemed original signatures, and shall have the same legal effect as original signature.

59
Q

four deadlines outlined in the contract deadline section

A
  • Seller Disclosure Deadline
  • Due Diligence Deadline
  • Financing & Appraisal Deadline
  • Settlement Deadline
60
Q

offer and time for acceptance

A

Make sure this is a reasonable amount of
time to respond.

61
Q

acceptance occurs only when all the following
have occurred:

A

Seller or Buyer has signed the offer or counteroffer Seller or Buyer or their agent has communicated to the other party or to the other party’s agent that the offer or counteroffer has been signed as required

62
Q

footer

A

Make sure you are using the most up-to-
date form.

63
Q

The Section in the REPC that defines the deadlines associated with the contract are located in:
A: Section 24
B: Section 23
C: Section 22
D: Section 21

A

A: Section 24

64
Q

The Section in the REPC dealing with the Appraisal Condition can be found in:
A: Section 8.1
B: Section 8.2
C: Section 8.3
D: Section 8.4

A

B: Section 8.2

65
Q

The Section in the REPC dealing with the Buyer’s Right to Cancel Before the Financing and Appraisal Deadline can be found in:
A: Section 8.3
B: Section 8.3b (I)
C: Section 8.3b (Ii)
D: Section 8.3b (Iii)

A

B: Section 8.3b (I)

66
Q

The Section in the REPC dealing with the Buyer’s Right to Cancel After the Financing and Appraisal Deadline can be found in:
A: Section 8.3
B: Section 8.3b (I)
C: Section 8.3b (Ii)
D: Section 8.3b (Iii)

A

C: Section 8.3b (Ii)

67
Q

The Section in the REPC defining Buyer Default can be found in:
A: Section 16.1
B: Section 16.2
C: Section 17
D: Section 18

A

A: Section 16.1

68
Q

Management Agreements can be found in:
A: Section 12.1
B: Section 12.2
C: Section 12.3
D: Section 12.4

A

C: Section 12.3

69
Q

The Section in the REPC dealing with short term rental bookings can be found in:
A: Section 12.1
B: Section 12.2
C: Section 12.4
D: Section 12.5

A

D: Section 12.5

70
Q

The Section in the REPC addressing whether or not there are additional Addenda can be found in:
A: Section 9
B: Section 10
C: Section 11
D: Section 12

A

A: Section 9

71
Q

The Section in the REPC dealing with whether or not there is additional earnest money can be found in:
A: Section 8.1
B: Section 8.2
C: Section 8.3
D: Section 8.4

A

D: Section 8.4

72
Q

The Section in the REPC dealing with the timing of the “Final Walk Through” can be found in:
A: Section 9
B: Section 10
C: Section 11
D: Section 12

A

C: Section 11

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