REPC 2 Flashcards
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)
B: Section 7
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: Section 7
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
B: Section 8
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: Consists Of The Buyer’s Review And Approval Of All The Content Pertaining To The Transaction
seller disclosures
seller must fill out completely and honestly.
Err on the side of disclosure. If in doubt, disclose it.
The seller should provide the following:
- 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
lead-based paint disclosure for the property
Only if the property was built prior to 1978
foreign investment in real property tax
act of 1980 (FIRPTA)
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.
why provide copies of most recent minutes, budget and financial statement for the homeowner’s association?
- 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
buyer’s conditions of purchase
[ ]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
due diligence
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.
buyer’s right to cancel or resolve objections
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.
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
C: True
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)
B: Section 8.1(A)
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
C: Section 8.3
Who is responsible for the due diligence period?
A: The Agent And Broker
B: The Buyer
C: The Sellar
D: No One
B: The Buyer
whose responsibility is it to do due diligence?
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.
appraisal condition
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.
buyer’s right to cancel
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
failure to cancel
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.
financing condition
Box (a) is checked if the Buyer is paying cash and no financing is needed or (b) should be checked if financing is needed.
buyer’s right to cancel BEFORE the financing &
appraisal deadline
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.
buyer’s right to cancel AFTER the financing &
appraisal deadline
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.
earnest money deposits) released to
seller
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.
additional earnest money deposit
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.
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
B: Section 10
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: No Changes To Any Existing Property Management Agreement And No New Property Agreement Shall Be Made W/Out Prior Agreement
addenda
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
home warranty plan
A very common seller concession is to provide a 1 year Home Warranty Plan. Fill in all four blanks and the amount.