REPC - Detailed Overview by Section
Updated: Nov 16, 2020
How to Fill Out The REPC
Instructions: This is written from the perspective of a Buyer Agent’s filling out a REPC. If you have any questions about the REPC, WRITE your questions on a REPC and come visit with me or Amber. If you haven’t gone through this document first, you may not contact either of us! You do your homework first, then we’ll answer the items which might not be clear to you.
EARNEST MONEY DEPOSIT:
REPC Date needs to be the date your Buyer SIGNS the REPC.
Buyer name should be the name the Buyer wants on Title (Usually it’s William, not Bill; Kristine, not Kris; ask if they wish to include middle initials, etc.)
Amount of Earnest Money: Generally, EM shouldn’t be less than $1,000.00. Should be a check, cashier’s check, or via Earnnest. Checks should be made payable to “KW Westfield” (Under NO circumstances will an agent accept cash for an earnest money deposit!) Exceptions might be if the Seller/Builder insists EM goes to his/her title company. Usually NOT a good idea to let EM go to a title company as they must follow Department of Insurance rules which makes release of EM to either party impossible if either Buyer or Seller won’t sign off on the release.
Buyer shall have FOUR days to deliver earnest money to Buyer Agent; Brokerage has four days to deposit the funds once received from agent. Don’t miss deadlines! Contract is voidable by Seller if EM isn’t collected in time.
OFFER TO PURCHASE
Always allow the MLS to populate these fields from the listing. Recommendation AFTER the full address is written: Include the MLS # in parenthesis (e.g. (MLS: 12345678) to bring the listing into the four corners of the contract. If filling the form out manually, include City, County, Zip Code, and Tax ID No. in the appropriate slots.
1.1 Included Items: There are DEFAULT items included with the home specifically listed here. Unless NOT owned by the Seller, or specifically excluded later in the REPC or by addendum, each item on the list IS included.
1.2 Other Included Items: Check the boxes or write in the personal property items Buyer is asking Seller to leave with the property. Be sure to always check the OTHER box if you’re typing in additional items (or if populated by the MLS listing inclusions). Check the appropriate box if there are or are not additional personal property items Buyer is asking Seller to convey at closing. This would be in a list on a Bill of Sale Addendum.
1.3 Excluded Items: If Buyer is agreeing to exclude specific personal property items (usually based on the listing), put them here so Seller knows to take them. (e.g. Included pool table, which Buyer does NOT want, should be put here…)
1.4 This REPC includes water which provides culinary water appurtenant to the home. This section is usually left blank. Only write in specifically EXCLUDED water rights Seller will be taking with him/her/them.
2. PURCHASE PRICE
2.1 Payment of Purchase Price. The price for the property MUST match the sum of the numbers in the left margin below.
2.1(a) Earnest Money should match the number in the Earnest Money Deposit section above.
2.1 (b) Additional Earnest Money – This number should always be ZERO. Don’t do this! (8.4 will be checked will NOT)
2.1(c) New Loan is the amount Buyer expects to borrow. I usually put “TBD” because it’s between the Buyer and the Lender. (See the notes about FHA/VA lending where an appropriate addendum is required. TALK WITH THE LENDER to know HOW the Buyer is planning to make the purchase (of not cash).
2.1 (d) Seller Financing. If Buyer is asking Seller to be the bank (rare cases) and finance a portion of the sales price, put the LOAN AMOUNT here. Then include the Seller Financing Addendum as part of the offer. (Visit with your broker if you’re doing Seller Financing.)
2.1(e) Balance of Purchase Price in Cash at Settlement. In normal times, especially when the offer is BELOW list price, I put “TBD” in this line. Where it makes sense, or helps the Buyer’s negotiating position, insert how much cash the Buyer is willing to bring to the table. (It does need to be a number the Buyer CAN bring, not a made-up number!)
2.1 Purchase Price. This is the total of 2.1 (a-e) and it must match the purchase price at the beginning of 2.1.
2.2 Sale of Buyer’s Property. Your Buyer either has or does not have a property to sell in order to perform. This is a DO NOT FIB OR LIE clause. Do not justify ANY Is Not selection if your Buyer must sell a property to have cash to make this purchase. Nothing is 100% until it is!
3. SETTLEMENT AND CLOSING (Words mean things)
3.1 Settlement is when the principals sign, bring money, etc., usually at a title company before 5:00 PM Mountain Time on the Settlement Deadline date.
3.2 Closing. Most title, TCs, and lenders call Settlement “Closing”. By definition, Closing is when the property funds and records (with the county) AFTER Settlement. This usually happens 24-48 hours after Settlement, and must close no later than four days after Settlement.
3.3 Possession. I usually check Upon Recording; however, look at the listing or find out NOW from the listing agent what the Seller’s expectations or desires are to avoid an impasse just before settlement. Don’t ignore this part!
4. PROATIONS / ASSESSMENTS / OTHER PAYMENT OBLIGATIONS
4.1 Prorations. Everyone pays their “fair share” based on closing date. (e.g. Regarding property taxes, if a property closes June 30, Seller would pay six months of property taxes; Buyer would be responsible for the last six months of the tax year. Works with HOA monthly fees, etc.)
4.2 Special Assessments. Any payment for KNOWN assessments for capital improvements shall be determined in this section. It’s up to negotiation. (I usually ask Seller to cover them.)
4.3 Fees/Costs/Payment Obligations
4.3(a) Escrow Fees. Both Buyer and Seller will pay their own closing costs. (This can and is often amended by addendum where Seller contributes toward Buyer’s closing costs.)
4.3(b) Rental Deposits/Prepaid Rents. Rental deposits and prepaid rents BELONG TO THE TENANT and will be forwarded from the Seller to the Buyer at Closing (usually as a credit) so Buyer can return deposits according to the lease agreement. Same for short-term rentals (e.g. AirBnB nightly bookings).
4.3(c) HOA/Other Entity Fees Due Upon Change of Ownership. Any costs of changing ownership (usually in HOAs) shall be paid for as negotiated. (I usually ask the Seller to pay these fees. Oft times, it’s split equally between both parties.) THIS IS A HUGE HEADACHE AT THE CLOSING OF A TRANSACTION. GET IT RESOLVED UP FRONT!
4.3(d) Utility Services. Be sure Buyer gets all utilities in his/her/their name at least the day before Settlement. Listing Agents, ask your Seller to NOT turn off utilities until a day or two after CLOSING. This is the be nice to each other section.
4.3(e) The title/escrow office will do their work and pay everyone off before they pay the Seller the remaining equity.
5. CONFIRMATION OF AGENCY DISCLOSURE
This section CONFIRMS you have a valid BBA in place and represent the Buyer. Be sure to include your license number; the Brokerage number (6650524-CN00); and the listing agent’s license and brokerage numbers in the appropriate slots. The MLS fills this in if you’re using the “Easy Button”. You should NOT be having a Buyer initial and sign a REPC if you don’t have a BBA already signed!
6. TITLE & TITLE INSURANCE
6.1 Title to the Property. Seller will convey free & clear title to Buyer at closing.
6.1(a) Long-Term Lease or Rental Agreements. Buyer agrees to accept the property with any existing (valid) lease agreements (long-term agreements in place). This means Buyer must honor the legal agreements already in place.
6.1(b) Short-Term Rental Bookings. Buyer agrees to accept the property with any existing (valid) lease agreements (short-term (nightly) agreements in place). This means Buyer must honor the legal agreements already booked.
6.2 Title Insurance. The most important part of this section is Seller will purchase an ALTA Homeowner’s policy which protects Buyer against title claims and hidden liens.
7. SELLER DISCLOSURES
This is a checklist for both Buyers and Sellers as Seller needs to provide EVERY applicable document listed below to Buyer before the Sellers Disclosure Deadline as defined by 24(d) in the REPC.
(a) This is the written Seller Property Condition Disclosures document.
(b) If the home was built before 1978, the Federal Lead-Based Paint Disclosure & Acknowledgement form is required. It should be executed and attached to the listing in the MLS for Buyer’s execution.
(c) Seller’s company Commitment Title Insurance
(d) Copy of any CC&Rs and amendments to CC&Rs appurtenant to the property
(e) HOA meeting minutes and annual (or latest) budget documents
(f) Copies of any long-term lease(s) that don’t expire before closing
(g) Copies of any short-term (overnight) lease(s) that don’t expire before closing or are scheduled after closing.
(h) Copies of any property management agreements affecting the property
(i) evidence of any water rights and/or water shares referenced in Section 1.4 (excluded rights)
(j) Written notice of any claims and/or conditions known to Seller relating to environmental problems and building or zoning code violations;
(k) Seller must declare if they’re considered a foreign person under FIRPTA rules.
(l) Any other item Buyer needs to make a decision regarding Due Diligence in moving forward or not…
8. BUYER’S CONDITION OF PURCHASE
These are the OUTS for a Buyer to cancel the REPC and retain their Earnest Money deposit.
8.1 DUE DILIGENCE CONDITION. Buyer’s obligation to purchase is or is not conditioned on Due Diligence. I usually say it IS conditioned.
8.1(a) Buyer will review all the items from Section 7 above. They also should perform a home inspection to know any issues the property may have. Remember: There’s no such thing as a PERFECT home! Buyer needs to determine if this is the right place for him/her/them.
8.1(b) Buyer needs to resolve objections or cancel before the Due Diligence Deadline in section 24(b). I recommend sending over a list of requested repairs as far ahead of the Due Diligence Deadline as possible to see what repairs/fixes the Seller is willing to perform. Then include those items in the Resolution of Due Diligence Addendum. (See the instructions for that document!) If Seller is not willing to resolve the objections most important to Buyer, Buyer may choose to cancel.
8.1(c) If Buyer cancels based on Due Diligence AFTER the Due Diligence Deadline in section 24(b), the earnest money deposit will be forwarded to the Seller as liquidated damages.
8.2 APPRAISAL CONDITION. Buyer may condition his/her/their purchase on an appraisal. If Buyer’s purchase is conditioned on the property’s appraising, they may cancel if the property does not appraise. Four things can happen if the property doesn’t appraise: 1) Buyer may cancel; 2) Seller can come down to the appraised value; 3) Buyer may pay cash over the appraised value (because lenders won’t); or 4) Buyer and Seller agree by addendum to meet somewhere in the middle.
8.2(a) If they can’t resolve the appraisal shortfall, Buyer would need to cancel before the Financing & Appraisal Deadline in section 24(c) to keep their earnest money deposit. Buyer would also need to provide a copy of the appraisal to Seller before or at the time of cancellation.
8.2(b) If Buyer were to cancel after the Financing & Appraisal Deadline, Buyer would forfeit the EM deposit to Seller.
8.3 FINANCING CONDITION
8.3(a) No financing required. Check this section if Buyer is paying CASH for the home. (This does NOT apply if Buyer has a hard money loan as there are loan conditions!)
8.3(b) Financing required. Check this section (most of the time) when Buyer needs the proceeds of a loan to perform on the contract.
8.3(b)(i) Buyer’s Right to Cancel Before the Financing & Appraisal Deadline. Buyer may cancel if the terms of the loan are unfavorable in any way. Buyer’s sole discretion is as broad a legal term as there is. If Buyer cancels before the Financing & Appraisal Deadline in section 24(c), the EM goes back to the Buyer, LESS anything the Buyer had go non-refundable in the bland in this section. I usually do not have EM go non-refundable at the Due Diligence Deadline. (It may be a way to get the Seller’s attention if it’s a crazy Seller’s market.)
8.3(b)(ii) Buyer’s Right to Cancel After the Financing & Appraisal Deadline. If Buyer fails to get a loan approval or chooses to cancel after the Financing & Appraisal Deadline in section 24(c), the EM Deposit shall be delivered to the Seller as liquidated damages.
8.3(b)(iii) Earnest Money Deposit(s) Released to Seller. If the REPC is cancelled under 8.3(b)(ii), Buyer agrees that all of the deposits made on the property shall be released to the Seller. Broker will release the funds without delay.
8.4 ADDITIONAL EARNEST MONEY DEPOSIT. Don’t do it! This is a part of the REPC that needs to be removed in Broker’s opinion. This is a part that is so easily forgotten by agents during the pending/escrow period. It is better to offer strong earnest money initially than to promise more later. Also, it’s likely that the EM will not clear the brokerage trust account between the secondary deposit and settlement which could delay closing.
Check if you do or do not have an addendum attached to your offer. If there are addenda, be sure to list them. You may NOT include terms in this section; put them on an addendum.
10. HOME WARRANTY PLAN / AS-IS CONDITION OF PROPERTY
10.1 Home Warranty Plan. Most Buyers ask the Seller to pay for a 1-year home warranty or home protection plan which covers the systems and appliances in the home. If you’re asking for one, check the appropriate box, and determine who’ll choose the plan, how much it’ll cost, and how much will be allowed, and finally, who’ll pay for it. Be certain to not miss something in this section which would create ambiguity or unclear paths!
10.2 Condition of Property/Buyer Acknowledgements. Buyer is purchasing the home AS-IS, with all faults, challenges, and without warranty.
10.3 Condition of Property/Seller Acknowledgements. Seller will disclose all KNOWN faults or conditions of the property to the Buyer. If Seller HIDES something or chooses not to disclose a material issue, Seller will likely get to make that repair on behalf of Buyer. Seller will leave the property in generally the same condition as when it went under contact and broom swept.
11. FINAL PRE-SETTLEMENT WALK-THROUGH INSPECTION. Seven days or closer to Settlement, Buyer may schedule to walk through the property to ensure repairs were made and the home is in generally the same condition as required in10.3. Also, it’s good to ensure Seller has not damaged the property during their move out.
12. CHANGES DURING THE TRANSACTION. Seller agrees to not make any changes to the property or further encumber the property without Buyer’s written permissions. Those changes include the following:
12.1 Alterations/Improvements need written consent from Buyer.
12.2 Financial Encumbrances/Changes to Legal Title need written consent from Buyer.
12.3 Property Management Agreements new or changed during u/c period need written consent from Buyer.
12.4 Long-Term Lease or Rental Agreements new or changed during u/c period need written consent from Buyer.
12.5 Short Term Rental Bookings new or changed during the u/c period need written consent from Buyer.
13. AUTHORITY OF SIGNERS. If either principal is an officer of a legal entity, he/she/they warrant they is/are able to sign on behalf of that entity.
14. COMPLETE CONTRACT. The REPC and all addenda constitute the contract between Buyer and Seller.
15. MEDIATION. I recommend checking MAY AT THE OPTION OF THE PARTIES, so Buyer and Seller are NOT locked into formal mediation. They can, they just don’t have to. I’d prefer starting with informal resolution processes.
16.1. Buyer Default. Most of the time, if Buyer defaults, Buyer will forfeit their Earnest Money deposit as liquidated damages. Seller may sue, and it’s really hard to get a judge to force a Buyer to perform and Buy…
16.2. Seller Default. If a Seller defaults, Seller could be forced to match Buyer’s Earnest Money deposit as liquidated damages (if Buyer is willing to walk); or they could be sued to perform; or pursue other remedies available at law. This REPC favors the Buyer.
17. ATTORNEY FEES AND COSTS/GOVERNING LAW. If the parties decide to go to court AND it goes to judgement (they won’t ever get that far), the prevailing party will collect reasonable and customary fees from the losing party. This clause was put in because an attorney wrote this agreement. It always will be based on Utah law.
18. NOTICES. This is an IMPORTANT clause! Notice from one side to the other MUST be in writing, signed by noticing party, and received by the receiving party (or agent) BEFORE any applicable deadline. Don’t assume an email got there in time. Over communicate! (Email, Call, Text, Reach out to the Cooperating Broker if needed)
19. NO ASSIGNMENT. The REPC may not be assigned by the Buyer unilaterally. Seller may choose to not accept a new buyer. This clause was included to avoid straw Buyers and loan fraud. If Buyer is part of an entity and wants to assign the contract to that entity (e.g. a Trust), Buyer may do so and Seller really has no cause to say no…
20. INSURANCE & RISK OF LOSS. Seller bears all risk of loss or damage until the property is no longer Seller’s… If damage (e.g. house is catches fire) exceeds 10%, Buyer may cancel the REPC and keep their EM.
21. TIME IS OF THE ESSENCE. Don’t miss deadlines! Deadlines are 5 PM Mountain Time unless otherwise stated. If an event or deadline is to take place a certain number of days from a trigger date (i.e. going under contract) day one is the day AFTER the trigger date. Days mean calendar days.
22. ELECTRONIC TRANSMISSION AND COUNTERPARTS. The REPC may be signed in counterparts (e.g. Buyer executes one set of docs; Seller executes the same docs; and each set is identical). Using an electronic signature capture tool is just as valid as capturing “wet” ink signatures.
23. ACCEPTANCE. So many challenges can happen here! The REPC is not accepted until both of the following have happened: a) Last party has checked “Acceptance” and signed/initialed the final document (REPC/Counteroffer/Addendum); AND b) the Principal (or agent) of the final signer has COMMUNICATED “we’re under contract” to the other Principal (or agent). Email gets lost or doesn’t deliver 100% of the time. Call, email, VM, text. Make sure you communicate ACCEPANCE before the other party withdraws or the acceptance deadline passes!
24: CONTRACT DEADLINES. I usually use “floating” deadlines. You may put in specific deadlines if you choose. If it takes more than a day or two to negotiate a contract, all of your deadlines may be messed up. I usually state “X Days After Acceptance” for each of the deadlines. (3,14, 21, 35 for (a) through (d) respectively) Here’s my example:
(a) Seller Disclosure Deadline: 3 Days After Acceptance
(b) Due Diligence Deadline: 14 Days After Acceptance
(c) Financing & Appraisal Deadline: 21 Days After Acceptance
(d) Settlement Deadline: 28 Days After Acceptance
25. OFFER AND TIME FOR ACCEPTANCE. I RARELY put in a specific time for acceptance. I USUALLY use “Upon Presentation” instead of a date. Then I call the listing agent and let him/her know an offer is coming and I need to know when the offer will be presented. That way I can let them know the offer acceptance deadline expires at that time for Seller to accept. (I also do this for Addenda.)
Follow up with the listing agent to ensure it was received and then find out the results! Sell a ton and bless a bunch of lives.
Disclaimers: This content is the property of KW Westfield. The information is guidance for KW Westfield agents and friends and any legal references relate to ideas, practices, and laws of the State of Utah and the Utah Department of Commerce, Utah Division of Real Estate. All errors are those of the author. This IS NOT legal advice. Call Broker with specific questions and call Broker with correct information should you discover an error (highly likely).
Each Keller Williams office is an independently owned and operated franchise of Keller Williams Realty International and is an Equal Opportunity Employer and supports the Fair Housing Act. All information provided, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy.
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