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what's up everyone max Armand tear your source for all things real estate here in Los Angeles and in today's video we're going over the residential purchase agreement the RPA is the most important document when you're buying or selling a home in California let's get started welcome back to another video and today we're going over the residential purchase agreement or the RPA now this is the purchase agreement this is the offer and when you're buying or selling a home this is the document that's going to contain all of the major terms and conditions of the transaction moving forward now this document is 10 pages long so we're going to go along one by one page by page showing you all of the top terms and conditions you're going to need to watch out for when either writing or reviewing an offer now page 1 of the 10 page agreement contains all of the financial information for the transaction it has a property address the buyer and seller names the close of escrow date how much the earnest money deposit is and also contains the purchase price probably the most important thing along with what your down payment amount is this page also defines what loan type the buyer is using whether that's FHA conventional VA or cash there's also an additional space at the bottom for financing terms and this is where you'd find a seller credit to the buyer for their closing costs if that's involved in the transaction now as we go through this video you're gonna see that there's a lot of boilerplate information and legal verbage on the contract that I may not address specifically but I'm going to point out the most important parts of each page and on page 2 that's going to be the loan and appraisal contingency periods the standard appraisal contingency is 17 days and we usually don't change that from what's written down on the contract the loan contingency is set at 21 days on the contract but usually I reduce this to 14 or 17 days if you have a strong buyer who's going to get that loan approval much sooner this is going to show the seller that you're strong can close fast and that your loan is on track to being approved right from the start of the transaction section 7 at the bottom of page 2 is where we start this that is allocation of costs and this is where you determine who pays for the natural hazard disclosure certain reports like the termite report inspection report HOA docks and things of that nature and that section continues on to page 3 page 3 section C is an important part of the transaction and that decides who pays for escrow and title costs the most common agreement in purchase agreements in California is for the buyer and seller to split the closing costs and for the seller to pay for the owners title insurance in section D we get to a long list of other costs and who is going to pay for them the city and county transfer taxes are covered by the seller this is where you determine who pays for the termite inspection report and if you're buying or selling in a place like Englewood this is where we would mark down who pays for the Englewood pre sale report section the item 10 is who pays for the home warranty plan now the standard dollar figure for that is $450 but the buyer may choose to upgrade that coverage to cover things like AC or a pool and usually those upgrades would come at the buyers expense the last section we're going over on page 3 is section 8 which determines which fixtures and appliances stay with the home at the close of escrow and this is a negotiation between buyer and seller which washer/dryers fridges and stoves may stay or leave with the current seller pages four and five have a lot of boilerplate information and legal verbage regarding taxes disclosures title investing and so you don't make changes to these terms if you'd like a copy of the agreement reach out to me and you can absolutely review these terms but now we're gonna move on to page six page six section fourteen has one of the most important parts of the agreement and this is your time frame for your inspection contingencies the standard on the page is 17 days but we usually reduce this time to 10 to 14 days this is the time where you hire your home inspector review the seller disclosures review title to the property and satisfy yourself as to the condition of the property before removing your inspection can agency and speaking of contingency periods that brings us to notice two performs and in section fourteen item II you have your notice to buyer to perform set at two days so if your inspection loan or appraisal contingencies have come due and you are not releasing those contingencies upon your legally contractual timeframe the seller can send you a notice to perform and that gives you 48 hours to act upon that contingency and satisfy it before they are legally allowed to cancel the deal so that's why it's very important to be staying on top of your timeframes completing your inspections in a timely manner always following up with your lender to make sure that loan is getting approved on time so you don't back yourself into a corner and face a notice to perform situation so page 7 has a lot of that legal verbage and no sections that we actually change to alter the contract it has terms regarding verification of property condition joint escrow instructions broker compensations so we're not going to go over this stuff in detail let's move on to page 8 page 8 has very important terms regarding breach of contract if the deal goes south and there's a significant conflict between the buyer the seller or the agents then the initials that you put down on page 8 say that you're going to go to mediation or arbitration that's sanctioned by the California Association of Realtors as opposed to going to court these signatures are actually optional but I advise all my clients and on 99.9% of transactions both parties opt into this clause it's a way to resolve any conflicts without bogging you down in legal fees and court dates and coming to a mutual agreement through a mediator page 9 is another one of those pages that has a lot of that boilerplate information that we're not going to go over in detail during this video there is a signature at the bottom for the buyer which executes the contract in full and the rest of the signatures for sellers and agents are on the following page the last page of the contract page 10 page 10 is the final page of the residential purchase agreement and the most important section is right there at the top and that's where a seller would sign acceptance now when a seller receives an offer they're gonna be able to do one of three things they can accept the offer outright counter the offer or reject the offer page 10 is also where the agents on both sides of the transaction would endorse this offer and where the escrow holder would eventually endorse when they are ready to open escrow so that was your crash course on their residential purchase agreement it's the cornerstone of every real estate transaction in California whether you're a buyer or a seller and I hope that today's video went over the top terms for you so next time you see this document you know what you're looking at so if you have any questions feel free to contact me on the email below I'm here to answer any questions that you may have about real estate here in Los Angeles but until then I'll see you on the next video [Music]
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