Contract Tips


Guide to REIN Standard Purchase Agreement

Below are just some of the important parts of the contract. Make sure to fill in all the blanks and check boxes as necessary.

Para. 1. Fill in all blanks as needed

Para. 2. Make sure to fill in who is holding the deposit in the "Escrow Agent" blank. Either the listing firm or the selling firm are the usual choices. The agent whose firm is designated must actually be in possession of the deposit at the time the contract is offered, unless the contract is amended to disclose another time when the deposit will be tendered.

Para. 3. The amounts in the blanks beneath the purchase price need to add up to the purchase price. Make sure to indicate the type of loan (VA, FHA, or Conventional) in the loan type blank.

Para. 4. Write in the amount, if any, that seller will pay toward the buyer’s closing costs as described in the paragraph, either as a dollar amount or percentage of the sales price.

Para. 5. The contract is ratified when the buyer and seller finish signing it, not when contingencies are removed (e.g. short sale approval, loan approval, home inspection). Do not wait until such contingencies are removed to hand in to the office the earnest money deposit and a copy of the contract. Do so as soon as the buyer and seller finish signing the contract and put the ratification date at the bottom of page 1 in the "Ratification Date" box.

Para. 7.A. If the buyer will not be able to close without first selling, leasing, or refinancing their current home or other property, that must be disclosed in the contract. You can write such a contingency under "Other Contingencies" in para. 14.

Para. 7.D. Make sure to check the box that applies. A septic system that is under a waiver is probably defective and the waiver granted to the current owners does not convey to the purchaser. If there is a waiver, the seller must disclose it.

Para. 8. An actual date needs to be filled in here for the settlement date, not a general timeframe. Also, in Virginia the buyer always chooses the settlement agent and this right to do so cannot be waived by the buyer.

Para. 11. Check the type of financing the purchaser is applying for.

Para. 12. If the buyer knows from the outset of any repairs they want made (before doing a home inspection), indicate these here.

Para. 13 & 14. The seller is agreeing to repair items found by the inspections mentioned in para. 13 up to the amount of the "cap" (1% of the sales price unless otherwise specified). These inspections apply even if the buyer does not elect to have a home inspection. Whether the buyer wants a home inspection should be specified in para. 14.D.1.

Checklist for a typical resale contract.

  1. Standard Purchase Agreement
  2. Property Inspection Contingency Addendum (unless buyer waives home inspection in paragraph 14.D.1).
  3. Property Disclosure (must be signed by seller first!).
  4. Lead Paint Disclosure if property built before 1978 (must be signed by seller first!).
  5. AICUZ disclosure (if property is in Norfolk, Va. Beach, Chesapeake, or Hampton. Must be signed by seller first!)
  6. Property Owners Association Resale Addendum if property is in a POA.
  7. Condo/Coop Resale Addendum if property is a condo or coop.
  8. Consumer Disclosure Information Form signed by client.
  9. Brokerage Fee Agreement if two firms are brokering the sale.
  10. Disclosure of Brokerage Relationship form if you are working with a buyer or seller who is NOT your client and who is NOT represented by another agent.

These are the forms that will be included in the initial offer. As the deal progresses, other forms (such as Home Inspection Contingency Removal Addendum) will become a part of the contract.