The Six Most Significant Changes of the Residential Purchase Contract Starting November 2014

Just one month shy before its 60th birthday, the California Association of Realtors, C.A.R., will introduce a revised Residential Purchase Agreement, known as RPA, in November 2014.

I apologize should I raise the flags too early for some people who live and work in the present. November is only a few weeks away. Being a pro-active personality, I already started to educate myself of how these changes will look like. They will definitely affect all of us - agents, buyers, sellers, lenders, and escrow officers.

In my opinion,  providing answers to clients' questions regarding the changes is not just an option, it is a fiduciary duty to be able to interpret the new contract.

C.A.R offers RPA workshops in a traditional class setting as well as webinars online. "Forms Tutor" in  the Zip Form Plus advisory feature is a free benefit for real estate agents provided by C.A.R and will assist you while completing the contract.

Below are the six most significant changes:

1. The default method for the buyer's obligation to bring a deposit directly to escrow has been changed to an electronic deposit rather than a check.
2.  The time to remove a loan contingency has been extended from 17 to 21 calendar days. Coinciding with this change is the removal of an optional paragraph allowing the loan contingency to remain until the loan is funded.
3. The revised RPA will take a unified approach to inspections and repairs. Wood-destroying pests and organisms inspections, and all other inspections, are now treated equally.
4. A new paragraph addresses the issue of items included in the sale that may not be owned by the seller and may, by  virtue of their presence, cause a lien to be recorded against property. (Note to myself: ask if this is also concerning long-term solar panel contracts with power companies).
5. The paragraph concerning what is included in the sale now specifically mentions "home automation systems" which are devices that allows a homeowner to remotely control certain home functions such as turning the water, lights, or applications on and off; setting the alarm, and adjusting the thermostat. 
6. No longer will the removal of the loan contingency automatically be deemed a removal of the appraisal contingency. These two key terms are considered to be independent.  If the appraisal contingency is removed and the buyer's chosen lender refuses to loan because the appraisal is too low, the buyer cannot rely on the lender's appraisal as a reason to cancel the contract without penalty.

There are more revisions, so don't procrastinate to get yourself familiar with them. As a Keller Williams real estate agent, I take pride in being on top of things and so should you because we owe it to our clients.