Real Estate 101 REPC
Mediation or not? This sections is where both parties agree that instead of going directly to court they will try mediation first. This is a claus that hopefully will never have to be used. In short parties agree in advance that if he deal goes bad they will meet with a mediator in an attempt to solve the dispute. A mediator is an independent party that meets with both parties and tries to come to an agreement out side of court. In the St George real estate market this type of arrangement is much less expensive than hiring an attorney going to court. Most attorneys will collect a deposit, somewhere in the neighborhood of $10,000 to begin a lawsuit. My experience is that most attorneys end up trying to resolve the issue outside of court anyway.
This section describes what happens if either buyer or seller default. Default loosely translated means that the party fails to fulfill the obligations they have agreed to in the REPC. This section explains in detail what happens when the deal fails. It is helpful for the person who is contemplating backing out of a transaction, to know what the ramifications will be. The default clause is an important part of the agreement. This section and the attorney section following can be a life saver, or a heart breaker, depending on which side of the transaction you are on. In my opinion one of the largest factors contributing to default is buyer or seller remorse. One client recently described this as the worst feeling he has ever had. He is now happily in his new house having sold his home and proceeded with the transaction. It is typical to have these feelings especially if you have lived in a home for a long time.
This section describes the notices going back and forth between parties, and the necessity of them being in writing.
Assignment is when a buyer decides he may want to back out of a deal, but he knows someone that may be interested in picking up where he left off. If this is to happen the seller must agree and sign saying the he or she is ok with the assignment.
This paragraph describes insurance and damage to the house being sold. As soon as closing occurs the buyer should have insurance to cover the property. Until closing the home is to be insured by the seller. If damage is more than 10% of the purchase price the REPC may be cancelled by either buyer or seller.
Time is of the Essence
This paragraph describes the importance of completing pieces of the agreement in a timely manner. It also explains how days and calendar days are to interpreted.
Electronic transmission refers to email, faxes, etc. In todays real estate world transactions in the St George real estate market are completed many times via email. There are occasions where two agents work together on a transaction and never meet each other. There are several electronic signature applications that are used. Dotloop, and Docusign are a couple, and there are others. These types of programs are totally legal and they can drastically shorten the time constraints of a transaction. They are also very effective when working with an out of area buyer or seller. The essence of this paragraph says that electronic transmissions will be acceptable.
This happens when both parties have come to an agreement. In some cases the agent may notify the other party that it is accepted before the actual paperwork has been exchanged.