The standard residential real estate purchase contract in California (Residential Purchase Agreement or RPA) is eight pages long in a font size that most people would not consider large. It is not a document that is easily assimilated, and most principals, if not their agents, can be excused if their eyes glaze over. Thus it is that listing agents often find themselves called upon to summarize the purchase offers that their clients receive.
A form that provided a summary of an offer would be a useful tool for an agent to have; and now, thanks to the California Association of REALTORS® (CAR) Standard Forms Advisory Committee, such a form is available. The form — Summary of Offer (RPA), or SUM-RPA — was released in December of 2016 and was extensively discussed at recent meetings of CAR directors in January.
The SUM-RPA presents eleven of the central terms of an offer in an easy-to-read, three-column table format: column one — name of term and paragraph reference; column two — amount or description; and column three — additional information. For example, the first row shows the purchase price, the RPA paragraph reference; and whether it is all cash.
The terms covered in the table are: (1) Purchase Price, (2) initial deposit amount, (3) increased deposit, if any, (4) loan amount, (5) close of escrow, (6) possession date, (7) loan contingency removal date, (8) appraisal contingency removal date, (9) buyer’s investigation period, (10) buyer’s sale contingency, if any, and (11) whether certain items are included in the sale.
Each of these items is automatically included in the SUM-RPA when the purchase agreement is constructed using the standard zipForms® electronic platform. Additionally, there is also space for other items and terms to be manually added to the summary form.
some will opine that other items should have been included, and that perhaps some that were included need not be there. Such is life.
As a matter of brokerage practice, it will no doubt take some time for the SUM-RPA to become widely used. It is a document that would appear to be primarily for the use of a prospective seller. It provides a summary of the offer that has been presented to him/her/them. (To be sure, though, a copy for the buyer might also be beneficial.) But the SUM-RPA is generated by the buyer’s agent. Its spaces are populated when the buyer’s agent fills out the RPA that is to be presented to the seller. How will this summary get into the seller’s hands?
Some buyer’s agents might just include the summary along with the full RPA that is presented. But they don’t have to; and it’s hard to see for how long, or why, that might become a habit.
Listing agents who want their sellers to have the summary form have two choices. They can stipulate that a summary must be included with an offer; or they can, upon review of the offer, manually fill one out themselves.
In any case, listing agents who want their clients to have a SUM-RPA will need to review the document carefully before presenting it. The SUM-RPA does not, for example, provide for the automatic inclusion of terms calling for the seller to pay for such things as home warranty policies and/or HOA documents. Such items can be substantial, and it could be important that they be manually added to the summary. Also, many items that might be asked for in a sale (e.g. the dog house, a chandelier, the giant TV, etc.) would need to be manually added to the form.
The new Summary of Offer form is a good idea and many will find it useful. No doubt it will be tweaked and modified as the years go by. Those who want to familiarize themselves with it now can find it on zipForms®. Or just ask me to send a copy.
Written by Bob Hunt for www.RealtyTimes.com Copyright © 2017 Realty Times All Rights Reserved.