Any real transaction in the state of California can benefit from a California residential purchase agreement. While a deed is mandatory when closing the deal, for registration purposes, the purchase agreement is so crucial for both parties it would be a shame not to issue one, even if the state doesn’t require it.
The California real estate purchase agreement sets the base for the future transaction, mentioning all the relevant aspects to make sure both parties are on the same page. It also states how possible contingencies will be handled, so it’s an efficient safety measure both for the seller and the buyer.
What Is a California Residential Purchase Agreement?
The California residential purchase agreement is a form of real estate contract issued before the final stage of the transaction. It’s written proof that one party offers the property, the other party intends to buy it, and they both agree on the main terms of the purchase.
The price, which is a crucial aspect, is mentioned in the residential purchase agreement California form, and it can be accepted or negotiated by the buyer. The California real estate purchase agreement covers everything from price and deadline to financing sources and disclosures.
It also makes it easier for the two parties involved to handle any contingencies. The final terms will be written in the deed when the deal is closed, but the purchase agreement is an essential part of the transaction.
Download Our Free Agreement Of California Residential Purchase Template
Go for the agreement of California Residential Purchase if you want to buy or sell the property by following state's laws. Click the option of Download template now to gain access to the document.
How to Use a Residential Purchase Agreement in California?
Verbal agreements don’t mean anything from a legal point of view, and when it comes to something as valuable as a piece of real estate, everything must be set in writing. In the state of California, if you want to sell or buy a property, you are advised to use a California real estate purchase agreement.
The first step in a real estate transaction is listing the property. When a potential buyer is interested, they make an offer, which the seller may accept, or they may negotiate. Once they are on the same page, they need to put all that into writing.
That’s when the California residential purchase agreement is issued, as written proof that the two parties have agreed on the terms of the purchase and that the buyer intends to complete the transaction.
A residential purchase agreement California form is a legally binding document, a solid contract between the two parties involved. From the moment they sign the purchase agreement to finally closing the deal, a few other steps may be necessary: an escrow, taking up a loan, inspections.
What makes the purchase agreement so important is the fact that it clearly states what happens if one of the parties tries to back out, or if the result of inspections changes the terms of the deal.
What Are the Requirements for a California Residential Purchase Agreement?
The California real estate purchase agreement must be written in such a way that both parties can be pleased and avoid losing time and money. To make sure both the seller and the buyer get protection and the transaction is open and correct, there are a few aspects that any California residential purchase agreement must cover:
- The price
- The escrow period (it’s usually between 30 and 45 days)
- The financing terms and loan application
- Financing and appraisal contingency
- Closing and possession – the date when the sale is finalized
Apart from these main sections, the document must include identifying information both for the property (address and legal description) and for the buyer and the seller. And then, there is a list of mandatory disclosures, which are meant to make the transaction as open and honest as possible and to avoid fraud attempts. These are the required disclosures:
- Transfer Disclosure Statement
- Natural Hazard Disclosure Statement
- Lead-Based Paint Disclosure
- Megan’s Law (regarding the presence of sex offenders in the area)
- Fire Detector Compliance Statement
- Homeowner’s Guide to Earthquake Safety
There are also optional types of disclosure or those that are only required in certain areas:
- Community Facilities District
- Local Option
- Methamphetamine – if at some point the property was used to create methamphetamine, the buyer must be informed, and all the measures to make the property safe and clean must be taken before closing the deal
- Military Ordnance – if a military facility is located near the piece of real estate
- New Home Insulation – only for new constructions
- Structural Pest Control Report
- Title Insurance Advisory Notice
- Water Heater Compliance Statement
Basically, any flaw or potential danger presented by the property has to be disclosed so that the buyer can make an informed decision.
Download Our Free Agreement Of California Residential Purchase Template
Go for the agreement of California Residential Purchase if you want to buy or sell the property by following state's laws. Click the option of Download template now to gain access to the document.
Conclusion
The California residential purchase agreement is an essential part of any real estate transaction in residential areas in California. It has so many benefits for both parties that it makes no sense to avoid issuing one. It makes sure the buyer is informed on all relevant aspects of the property, and the seller has the warranty that if the buyer backs out, they get at least the deposit.
If you need to write a California real estate contract, try using the template we provide at CocoSign. You will see our California real estate forms pdf is easy to use and efficient, just like the rest of the templates they offer.
DOCUMENT PREVIEW
a.) In addition, Buyer agrees, within a reasonable time, to make a good faith loan application with a credible financial institution;
b.) If Buyer does not reveal a fact of contingency to the lender and this purchase does not record because of such nondisclosure after initial application, the Buyer shall be in default;
c.) On or before ____________________, 20___, the Buyer will provide the Seller a letter from a credible financial institution verifying a satisfactory credit report, acceptable income, source of down payment, availability of funds to close, and that the loan approval ☐ is ☐ is not contingent on the lease, sale, or recording of another property;
d.) In the event the Buyer fails to produce the aforementioned letter or other acceptable verification by the date above in Section V(c), this Agreement may be terminated at the election of the Seller with written notice provided to the Buyer within ____ days from the date in Section V(c);
e.) Buyer must obtain Seller’s approval, in writing, to any change to the letter described in Section V(c) regarding the financial institution, type of financing, or allocation of closing costs; and
f.) Buyer agrees to pay all fees and satisfy all conditions, in a timely manner, required by the financial institution for processing of the loan application. Buyer agrees the interest rate offered by lender or the availability of any financing program is not a contingency of this Agreement, so long as Buyer qualifies for the financing herein agreed. Availability of any financing program may change at any time. Any licensed real estate agent hired by either party is not responsible for representations or guarantees as to the availability of any loans, project and/or property approvals or interest rates.
☐ - Seller Financing. Seller agrees to provide financing to the Buyer under the following terms and conditions:
a.) Loan Amount: $____________________
b.) Down Payment: $____________________
c.) Interest Rate (per annum): ____%
d.) Term: ____ ☐ Months ☐ Years
e.) Documents
: The Buyer shall be required to produce documentation, as required by the Seller, verifying the Buyer’s ability to purchase according to the Purchase Price and the terms of the Seller Financing. Therefore, such Seller Financing is contingent upon the Seller’s approval of the requested documentation to be provided on or before ____________________, 20___. The Seller shall have until ____________________, 20___ to approve the Buyer's documentation. In the event Buyer fails to obtain Seller’s approval, this Agreement shall be terminated with the Buyer’s Earnest Money being returned within five (5) business days.
VI. Sale of Another Property. Buyer’s performance under this Agreement: (check one)
☐ - Shall not be contingent upon selling another property.
☐ - Shall be contingent upon selling another property with a mailing address of ___________________, City of ____________________, State of ____________________ within ____ days from the Effective Date.
VII. Closing Costs. The costs attributed to the Closing of the Property shall be the responsibility of ☐ Buyer ☐ Seller ☐ Both Parties. The fees and costs related to the Closing shall include but not be limited to a title search (including the abstract and any owner’s title policy), preparation of the deed, transfer taxes, recording fees, and any other costs by the title company that is in standard procedure with conducting the sale of a property.
VIII. Funds at Closing. Buyer and Seller agree that before the recording can take place, funds provided shall be in one (1) of the following forms: cash, interbank electronic transfer, money order, certified check or cashier’s check drawn on a financial institution located in the State, or any above combination that permits the Seller to convert the deposit to cash no later than the next business day.
IX. Closing. This transaction shall be closed on ______________________, 20____ at ____:____ ☐ AM ☐ PM or earlier at the office of a title company to be agreed upon by the Parties (“Closing”). Any extension of the Closing must be agreed upon, in writing, by Buyer and Seller. Real estate taxes, rents, dues, fees, and expenses relating to the Property for the year in which the sale is closed shall be prorated as of the Closing. Taxes due for prior years shall be paid by Seller.
X. Survey. Buyer may obtain a survey of the Property before the Closing to assure that there are no defects, encroachments, overlaps, boundary line or acreage disputes, or other such matters, that would be disclosed by a survey ("Survey Problems"). The cost of the survey shall be paid by the Buyer. Not later than ____ business days prior to the Closing, Buyer shall notify Seller of any Survey Problems which shall be deemed to be a defect in the title to the Property. Seller shall be required to remedy such defects within ____ business days and prior to the Closing.
If Seller does not or cannot remedy any such defect(s), Buyer shall have the option of canceling this Agreement, in which case the Earnest Money shall be returned to Buyer.
XI. Mineral Rights. It is agreed and understood that all rights under the soil, including but not limited to water, gas, oil, and mineral rights shall be transferred by the Seller to the Buyer at Closing.
XII. Title. Seller shall convey title to the property by warranty deed or equivalent. The Property may be subject to restrictions contained on the plat, deed, covenants, conditions, and restrictions, or other documents noted in a Title Search Report. Upon execution of this Agreement by the Parties, Seller will, at the shared expense of both Buyer and Seller, order a Title Search Report and have delivered to the Buyer.
Upon receipt of the Title Search Report, the Buyer shall have ____ business days to notify the Seller, in writing, of any matters disclosed in the report which are unacceptable to Buyer. Buyer’s failure to timely object to the report shall constitute acceptance of the Title Search Report.
If any objections are made by Buyer regarding the Title Search Report, mortgage loan inspection, or other information that discloses a material defect, the Seller shall have ____ business days from the date the objections were received to correct said matters. If Seller does not remedy any defect discovered by the Title Search Report, Buyer shall have the option of canceling this Agreement, in which case the Earnest Money shall be returned to Buyer.
After Closing, Buyer shall receive an owner’s standard form policy of title insurance insuring marketable title in the Property to Buyer in the amount of the Purchase Price, free and clear of the objections and all other title exceptions agreed to be removed as part of this transaction.
XIII. Property Condition. Seller agrees to maintain the Property in its current condition, subject to ordinary wear and tear, from the time this Agreement comes into effect until the Closing. Buyer recognizes that the Seller, along with any licensed real estate agent(s) involved in this transaction, make no claims as to the validity of any property disclosure information. Buyer is required to perform their own inspections, tests, and investigations to verify any information provided by the Seller. Afterward, the Buyer shall submit copies of all tests and reports to the Seller at no cost.
Therefore, Buyer shall hold the right to hire licensed contractors, or other qualified professionals, to further inspect and investigate the Property until ______________________, 20____ at ____:____ ☐ AM ☐ PM.
After all inspections are completed, Buyer shall have until ______________________, 20____ at ____:____ ☐ AM ☐ PM to present any new property disclosures to the Seller in writing. The Buyer and Seller shall have ____ business days to reach an agreement over any new property disclosures found by the Buyer. If the Parties cannot come to an agreement, this Agreement shall be terminated with the Earnest Money being returned to the Buyer.
If the Buyer fails to have the Property inspected or does not provide the Seller with written notice of the new disclosures on the Property, in accordance with this Agreement, Buyer hereby accepts the Property in its current condition and as described in any disclosure forms presented by the Seller.
In the event improvements on the Property are destroyed, compromised, or materially damaged prior to Closing, the Agreement may be terminated at Buyer’s option.
XIV. Seller’s Indemnification. Except as otherwise stated in this Agreement, after recording, the Buyer shall accept the Property AS IS, WHERE IS, with all defects, latent or otherwise. Neither Seller nor their licensed real estate agent(s) or any other agent(s) of the Seller, shall be bound to any representation or warranty of any kind relating in any way to the Property or its condition, quality or quantity, except as specifically set forth in this Agreement or any property disclosure, which contains representations of the Seller only, and which is based upon the best of the Seller’s personal knowledge.
XV. Appraisal. Buyer’s performance under this Agreement: (check one)
☐ - Shall not be contingent upon the appraisal of the Property being equal to or greater than the agreed upon Purchase Price.
☐ - Shall be contingent upon the appraisal of the Property being equal to or greater than the agreed upon Purchase Price. If the Property does not appraise to at least the amount of the Purchase Price, or if the appraisal discovers lender-required repairs, the Parties shall have ____ business days to re-negotiate this Agreement (“Negotiation Period”). In such event the Parties cannot come to an agreement during the Negotiation Period, this Agreement shall terminate with the Earnest Money being returned to the Buyer.
XVI. Required Documents. Prior to the Closing, the Parties agree to authorize all necessary documents, in good faith, in order to record the transaction under the conditions required by the recorder, title company, lender, or any other public or private entity.
XVII. Termination. In the event this Agreement is terminated, as provided in this Agreement, absent of default, any Earnest Money shall be returned to the Buyer, in-full, within ____ business days with all parties being relieved of their obligations as set forth herein.
XVIII. Sex Offenders. Section 2250 of Title 18, United States Code, makes it a federal offense for sex offenders required to register pursuant to the Sex Offender Registration and Notification Act (SORNA), to knowingly fail to register or update a registration as required. State convicted sex offenders may also be prosecuted under this statute if the sex offender knowingly fails to register or update a registration as required, and engages in interstate travel, foreign travel, or enters, leaves, or resides on an Indian reservation.
A sex offender who fails to properly register may face fines and up to ten (10) years in prison. Furthermore, if a sex offender knowingly fails to update or register as required and commits a violent federal crime, he or she may face up to thirty (30) years in prison under this statute. The Buyer may seek more information online by visiting https://www.nsopw.gov/.
XIX. Time
. The Parties agree that any dispute or claim in law or equity arising between them out of this Agreement or any resulting transaction, which is not settled through mediation, shall be decided by neutral, binding arbitration. The arbitrator is required to be a retired judge or justice, or an attorney with at least five (5) years of residential real estate law experience unless the Parties mutually agree to a different arbitrator. Under arbitration, the Parties shall have the right to discovery in accordance with California law. Judgment upon the award of the arbitrator(s) may be entered into any court having jurisdiction. Enforcement of this Agreement to arbitrate shall be governed by the Federal Arbitration Act.
a.) Exclusions. The following matters shall be excluded from the mediation and arbitration: (i) a judicial or non-judicial foreclosure or other action or proceeding to enforce a deed, mortgage or installment land sale contract as defined in accordance with California law; (ii) an unlawful detainer action, forcible entry detainer, eviction action, or equivalent; (iii) the filing or enforcement of a mechanic’s lien; and (iv) any matter that is within the jurisdiction of a probate, small claims or bankruptcy court. The filing of a court action to enable the recording of a notice of pending action, for order of attachment, receivership, injunction, or other provisional remedies, shall not constitute a waiver or violation of the mediation and arbitration provisions of this Section.
XXIV. Governing Law. This Agreement shall be interpreted in accordance with the laws in the State of California.
XXV. Terms and Conditions of Offer. This is an offer to purchase the Property in accordance with the above stated terms and conditions of this Agreement. If at least one, but not all, of the Parties initial such pages, a counter offer is required until an agreement is reached. Seller has the right to continue to offer the Property for sale and to accept any other offer at any time prior to notification of acceptance. If this offer is accepted and Buyer subsequently defaults, Buyer may be responsible for payment of licensed real estate agent(s) compensation. This Agreement and any supplement, addendum or modification, including any copy, may be signed in two or more counterparts, all of which shall constitute one and the same writing.
XXVI. Binding Effect. This Agreement shall be for the benefit of, and be binding upon, the Parties, their heirs, successors, legal representatives, and assigns, which therefore, constitutes the entire agreement between the Parties. No modification of this Agreement shall be binding unless signed by both Buyer and Seller.
XXVII. Severability. In the event any provision or part of this Agreement is found to be invalid or unenforceable, only that particular provision or part so found, and not the entire Agreement, will be inoperative.
XXVIII. Offer Expiration. This offer to purchase the Property as outlined in this Agreement shall be deemed revoked and the Earnest Money shall be returned unless this Agreement is signed by Seller and a copy of this Agreement is personally given to the Buyer by ______________________, 20____ at ____:____ ☐ AM ☐ PM.
XXIX. Acceptance. Seller warrants that Seller is the owner of the Property or has the authority to execute this Agreement. Therefore, by the Seller’s authorization below, he/she/they accepts the above offer and agrees to sell the Property on the above terms and conditions and agrees to the agency relationships in accordance with any agreement(s) made with licensed real estate agent(s). Seller has read and acknowledges receipt of a copy of this Agreement and authorizes any licensed real estate agent(s) to deliver a signed copy to the Buyer.
Delivery may be in any of the following: (i) hand delivery; (ii) email under the condition that the party transmitting the email receives electronic confirmation that the email was received to the intended recipient; and (iii) by facsimile to the other party or the other party’s licensee, but only if the transmitting fax machine prints a confirmation that the transmission was successful.
XXX. Licensed Real Estate Agent(s). If Buyer or Seller have hired the services of licensed real estate agent(s) to perform representation on their behalf, he/she/they shall be entitled to payment for their services as outlined in their separate written agreement.
XXXI. Disclosures. It is acknowledged by the Parties that: (check one)
☐ - There are no attached addendums or disclosures to this Agreement.
☐ - The following addendums or disclosures are attached to this Agreement:
☐ - Lead-Based Paint Disclosure Form
☐ - _________________________________________________________________
☐ - _________________________________________________________________
☐ - _________________________________________________________________
XXXII. Additional Terms and Conditions. _____________________________________
