Purchase Contracts

Purchase Contracts ## The California Residential Purchase Agreement (RPA) The California Residential Purchase Agreement and Joint Escrow Instructions (RPA) is the standard CAR (California Association of Realtors) form used in the vast majority of California residential real estate transactions. It serves as both the purchase contract and the escrow instructions — when signed by all parties, it opens escrow and governs the entire transaction through closing. The RPA is a comprehensive document of 10+ pages covering every aspect of the transaction. Understanding its key elements is essential for the California exam. --- ## Key Elements of the RPA ### Parties The buyer(s) and seller(s) are identified by full legal name. The way names are entered affects how title will be held — agents should ask buyers how they want to take title before writing the offer. ### Property Description The property is identified by street address and, where available, Assessor's Parcel Number (APN). The APN is the county's unique identifier for every parcel and links to the county tax records. ### Purchase Price and Initial Deposit The purchase price is the full amount the buyer agrees to pay. The initial deposit (earnest money) is typically 1–3% of the purchase price and must be deposited into escrow within 3 business days of acceptance per the standard RPA. The deposit demonstrates the buyer's good faith and is applied toward the purchase price at closing. The initial deposit is held in the escrow company's trust account — it is neither the seller's money (not yet) nor fully the buyer's (it's at risk based on contingency removals). ### Financing Terms The RPA specifies: - Loan amount and loan type (conventional, FHA, VA) -…