Where to Download a Sample New Regional Sales Contract

The Prince William County Association of Realtors has posted a downloadable sample of the Contract as a PDF document here. It has a big watermark on it that says sample, but it may be useful to those of you who have yet to get your hands on a copy.

It looks like they stole -err, borrowed it from the GCAAR website because it has GCAAR form number on the bottom. Also, they made a mistake when they converted it and now it appears to have 11 pages. Actually, what happened is page 4 spilled over 2 lines onto an otherwise blank page 5.

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New Regional Sales Contract - What's New on Page 1

In addition to the larger, Times New Roman font (to make the contract easier to read after multiple faxes) here is brief summary of what is new on Page 1 of the New Regional Sales Contract. The changes are highlighted in the image above. Click on the image for a larger version.

Pages 2 - 10 will follow in later posts.

*** PREAMBLE: Adds “who, among other things” ; reference prior disclosures of brokerage types and relationships; add language for the parties acknowledge the sufficiency of consideration and mutuality of obligations.

1. REAL PROPERTY: Minor changes in order of Legal Description, moving Parking Spaces closer to front; added municipality, made Property Defined term earlier in paragraph.

2. PRICE AND FINANCING (old Paragraph 4): This paragraph is moved forward in the Contract so that the essential elements of the deal are taken care of right away . . . This Property at This Price. Also, if there is Seller Financing be sure to complete the new Seller Financing Addendum to be released at the same time as the new Regional Sales Contract. Added “if applicable” after types of trusts

3. DEED(S) OF TRUST (old Paragraph 7): Moved forward to get money issues addressed together. Together with paragraph 2 becomes the Specified Financing as that term is now defined.

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All New Contract Seminars Are Not Created Equal

Top 5 reasons to go to an MBH New Contract Class

1. Agents earn Continuing Education or Post Licensing credits (including mandatory PL credits) for our new contract classes.
While it is true that anyone can be a real estate school for a day and offer CE credits by paying $10 a head to an outfit on the internet, MBH is an accredited Real Estate School registered with the Virginia Department of Professional and Occupational Regulation. We offer both Continuing Education and Mandatory Post Licensing credits.
2. We have access to all the most recent forms including the recently revised Virginia Jurisdictional Addenda and the new Form 100.
3. We are represented (by yours truly) on the NVAR Standard Forms committee.
Two huge errors were corrected by the committee recently. A standard form was created to make the Contract contingent on FHA and VA financing and added language to paragraph 3 of the Virginia Jurisdictional Addendum it will only apply if you make the contract contingent on Appraisal (page 4). Why discuss your concerns about the contract with someone who can't do anyhing about it?
4. Some competitors were on the Regional Sales Contract Task Force that made the mistakes, not the Forms committee that fixed them. The Task Force is done. All the work is being done on the Forms Committee.
5. We answer questions, offer opinions and suggestions, and help them with strategies for filling out the new contract - which the NVAR instructors have been told not to do.

Electronic Versions and Roll Out Update

According to my sources, who I will not reveal, NVAR may not be able to meet the the September 1 release date that GCAAR insists on adhering to. Apparently, they had to pull the Virginia Jurisdictional Addendum off the printer when we correct some critical mistakes. The new one will not make it into the print queue for a few days. They are trying to expedite the process and hope to have it ready by September 5th but can't make any guarantees. All four of the NVAR electronic forms vendors, including Zipforms and Autocontract, already have these
revisions. Zipforms and our other two forms vendors should be ready on time. There is less certainty about Autocontract because NVAR is still waiting on the proofs for the Regional Sales Contract (which should be ready shortly from the printer).

I hope to have better estimates within a few days.


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Big Class and Workshop

Details of the September 6, 2006 four hour CE & PL class are now available. All of my education classes can be viewed by clicking on the title of the this post.




On September 6, 2006 from 10-2 I will be teaching a class on the New Regional Sales Contract for four hours of continuing education credit. There will be two hours of lecture followed by lunch and two hours of workshops designed to give agents some practice on the mechanics of filling out the new forms.

This will be a great event, even for those that have already been to the two hour classes, because the lecture will incorporate all of the excellent suggestions I have received teaching this class for the last two months. I will also have answers to all of the questions that have come up during that period, and an exclusive look at the new Va. Jurisdictional Addendum as it has been revised to fix some of the problems identified during this pre-release education process.

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Update on Release Date for New Contract

We are back to September 1, 2006.

Although the seminar samples being handed out at NVAR's overview sessions on the new contact contain a watermark that indicates the new form should not be used until September 15th, 2006 the form will actually be valid and available on September 1, 2006, as originally announced back in June. GCAAR wasn't interested in NVAR's request to delay the roll out another 2 weeks to give agents who may have been away on vacation travel extra time to take classes and get up to speed on the new changes.

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Critical Errors and Fixes

The New Contract isn't even out yet and we've discovered a couple of critical errors made by the Regional Sales Contract Task Force and the Standard Forms Committee (on which I serve).

Two problems:

1. There is no way to make the contract contingent on FHA or VA financing. The Financing Contingency language was moved to new Paragraph 10, which is titled Conventional Financing Terms. There is no similar language in Paragraph 11, which sets out the terms for purchasers that have specified FHA or VA Financing in the paragraph 3 of the Contract.

2. The Appraisal Contingency language in the Virginia Jurisdictional Addendum would appear to create a contingency even if the parties has indicated in the body of the Regional Sales Contract that the purchaser was opting to proceed without regard to an Appraisal.

The Fixes

1. The Standard Forms Committee met today and voted to add a paragraph to the Virginia Jurisdictional Addendum that reads in substance "If FHA or VA financing is selected in paragraph 3 of the Contract then the FHA and VA Financing Contingency Addendum must be attached." NVAR General Counsel will then create a form that takes the langauge of the Conventional Financing Contingency and reproduces on its own from with the title "FHA and VA Financing Addendum."

In the meantime, if you represent a purchaser applying for FHA financing, you can do the same thing by cutting and pasting the langague from paragrapch 10(c) of the Regional Sales Contract onto a blank Addendum form for all the parties to sign.

2. We voted at todays meeting to approve my motion to add the following at the beginning of the Appraisal Contigency paragraph: "If Option 1 is selected and initialed in pagraph 10(b) of the Regional Sales Contract . . ." so that it is clear the contingency language does not apply if the purcahser has selected Option 2 and waived the appraisal contingency.

What problems or inconsitencies have you noticed? Leave a comment. We may be able to fix them.



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Appraisal Contingency in Virginia

The Appraisal Contingency has been moved to a separate addendum in Maryland and D.C. and has become paragraph 3 of the Jurisdictional Addendum in Virginia. Although the language in the Contract itself tells agents to look to a separate addendum, Virginia agents should not be confused. No such document exists, just turn to your Va. Jurisdictional Addendum.

Caution: There is no language in Paragraph 3 of the addendum that says "if applicable" nor is there a place to check off whether the paragraph applies. Those agents wishing to ensure the appraisal contingency is effectively waived should line through this paragraph and have all parties initial indicating that it has been deleted -- even if you already checked the box that says you are deleting the appraisal contingency in the body of the contract.

When the contingency does apply, as will usually be the case, it is now time limited. The first decision you have to make when filling in the addendum is how many days to give yourself to complete the appraisal process. I say it that way, because the practice in our market is for the Purchaser to draft the offer. Since this will probably be the case, talk to your Purchaser's lender about how long they will need to do the appraisal. As a guideline, the form recommends a minimum of fourteen days.

Once the appraisal happens, the Purchaser is required to give notice that one of three things has happened: a) The appraisal was fine and the contingency is satisfied and removed b) The appraisal was low and the Purchaser would like to renegotiate the price; or c) The appraisal was low but the Purchaser is willing to close at the original sales price anyway.

These are essentially the same three things that could happen under the old contract. What is new is the Purchaser is required to give notice of the outcome of the Appraisal, even when everything is fine.

What if they don't? Then the contingency will continue until they do.

What's the deadline for, then? After the deadline, the Seller may require the Purchaser to provide one of the three required notices withing 3 days, or the contract becomes void.

Be careful, though, if you represent the Seller. Although you may be anxious to remove the contingency, if you demand an answer, and the Purchaser refuses to answer, the contract may become void . . . even if the Appraisal was fine! The failure to respond for any reason may cause the contract to become void. If you are concerned that your buyer is getting cold feet and may be looking for a way out of the Contract, you may wish to exercise your rights under Paragraph 12 to find out information about the progress of the loan approval process, and ask the lender directly about the outcome of the appraisal.



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