Important Things to Know About The Real Estate Purchase Contract (REPC)
Understanding the real estate purchase contract or REPC document is important for buyers and agents alike. This is what’s used whenever a person makes an offer on a property. Seeing how the REPC is made up of 9 pages stuffed to the brim with information, there are some important things to point out. I’ve seen times when agents didn’t fully understand this contract, and got their clients into some serious hot water. That’s why we always recommend people looking into buying a home take 20 min and research this document.
What Exactly is REPC
This document is essentially a real estate purchasing contract. This is where the buyer will list all of the specifics with the offer. Its also going to list some VERY important dates. If you breach the contract after these days have come and gone, there will be some significant consequences.
The first date that needs to be specified is for the home inspection to be completed. The buyer will be responsible for payment, but he will have full freedom to run any kinds of tests his/she sees fit. If you find a problem with something with the home, and the inspection is completed in the required time, there are two options. First, you can cite the issue and get out of the contract. You will be returned the entire earnest money deposit, and be done with the thing.
The second option is to request the problem get fixed. The seller will be responsible to pay for fixing the issue. Once it is taken care of to the buyers satisfaction, the deal will move forward. If you don’t get the home inspection completed by the deadline, but you find a problem with the house and want to end the contract, you will be in default. We will discuss what that means later in the post.
The second important date to note involves obtaining the proper financing. If you’re trying to get out of the contract, this is the easiest way to cancel it without being in default. Basically, this is the final day when you can cancel the REPC because you didn’t like your financing options. This can be you either couldn’t qualify for the loan or you simply didn’t like how the numbers worked out. Again, if you already signed a purchasing contract, then 30 days later wanted to cancel the thing, this is the way out. As long as you dismiss the deal before the financing approval date, you won’t default and will receive all of your earnest money back.
The next important date in the REPC document is the settlement date. This is where you will sign all of the final loan documents, and the money will transfer from the lender to the seller.
Settlement is when the lender will register a mortgage against the title of your new property. This mortgage will act as a security instrument to pay back the debt if the home owner defaults on payments.
Lastly, this is when all clauses on the contract are fulfilled, and the deal is almost done. The transfer of the land and mortgage is registered with the title office in your state, and all that’s left is the receive the keys to the new home.
Lastly, is the all important closing date. This is when you will get the keys to the property, and the deal will be completed. This is also where you will pay the final closing costs. That will include the commission to the real estate agent, and any fees associated with the final steps of the process.
If you are thinking about buying a property in Utah or anywhere else in the county, it would be smart to be familiar with the real estate purchasing contract. If you have a good real estate agent, he/she should ask you questions about your preferences and have the document completely filled out. You should only have to worry about signing your names on the thing. Having this kind of assistance is one of the big differences between traditional and national brokers. Companies like Homie and other big box businesses charge you a bunch of extra money to help with the paperwork. Seeing how most buyers aren’t lawyers and haven’t purchased a lot of other properties, it is definitely not advised to do the contracts yourself.
If you’re looking for a Utah real estate agent that is very familiar with the REPC and other documents, we are here to help. We actually have a lawyer look over all of the paperwork before it is filed to make sure everything is perfect. Please give us a call to setup a free consultation where we can discuss the options for your next real estate purchase.