Buyer’s Failure to Allow Lender to Give Loan Status

Fact Pattern: In last week’s Legal Tip, we addressed a seller’s right to get the buyer’s loan status directly from the buyer’s lender under paragraph 5C(3) of C.A.R.’s Residential Purchase Agreement (RPA). This week is a follow-up question. Let’s say that you are the listing agent for a pending sales transaction. You are not getting a straight answer from the buyer’s agent as to the status of the buyer’s loan. You contact the buyer’s lender directly under paragraph 5C(3) of the RPA. But the buyer’s lender refuses to discuss the matter with you, absent the buyer’s written permission. You even show the lender paragraph 5C(3) of the RPA, but to no avail. You then ask the buyer’s agent for the buyer’s written permission, but the buyer refuses to give it.

Multiple Choice Question: Under these circumstances, can the seller serve the buyer with a 2-day Notice to Buyer to Perform (NBP)? Pick the best answer:

A. Yes, because the buyer has failed to perform.
B. No, because the RPA only allows the seller, not the listing agent, to get the buyer’s loan status from the buyer’s lender.
C. No, because the RPA does not require the buyer to provide the lender with written permission.
D. No, because the RPA does not allow the seller to serve an NBP for this particular reason.  (more…)

Asking About the Status of Buyer’s Loan

Question: You are the listing agent for a pending sales transaction using C.A.R.’s Residential Purchase Agreement (RPA). You are not getting a straight answer from the buyer’s agent as to the status of the processing of the buyer’s loan. Can you contact the buyer’s lender directly to get a loan status? Pick the best answer:

A. Yes, if the buyer has not removed the loan contingency.
B. Yes, regardless of whether the buyer has removed the loan contingency.
C. No, as a matter of law.
D. No, as according to the RPA.  (more…)

Removal of Investigation Contingency from Seller’s Perspective

Multiple Choice Question: You are the listing agent in a pending sales transaction using C.A.R.’s Residential Purchase Agreement (RPA). After the buyer’s investigation contingency expires, you help the seller serve a Notice to Buyer to Perform (NBP) to remove the buyer’s investigation contingency. Instead of removing the “Entire Buyer’s Investigation Contingency,” the buyer just removes “All Buyer Investigations (including insurability) other than the physical attributes.” Which one of the following statements is false? Pick the best answer:

A. The buyer can still cancel based on any physical attribute of the property.
B. The buyer can still cancel based on insurability.
C. The seller is not required to serve another NBP to remove the investigation contingency before the seller issues a cancellation.
D. The seller can issue a cancellation of the Agreement, but the seller must return the deposit to the buyer.  (more…)

What is an ABAD?

Multiple Choice Question: You are the buyer’s agent. Your buyer receives an Affiliated Business Arrangement Disclosure Statement (ABAD) from the listing agent. The listing brokerage’s ABAD is 5 pages long, and it lists a lot of charges and fees. The buyer wants to know what the buyer is being asked to sign. Which of the following is a good explanation of the ABAD? Pick the best answer:

A. It provides a list of companies owned by the listing brokerage that may be charging certain fees to the buyer.
B. It provides a list of preferred companies that the listing brokerage is referring to the buyer to use if desired.
C. It provides a list of companies affiliated with the listing brokerage that will also profit from the buyer’s sales transaction.
D. It provides a list of companies affiliated with the listing brokerage that the buyer is not required to use.  (more…)

C.A.R.’s March 2024 Forms Release

C.A.R. has recently released 4 new and newly-revised landlord-tenant forms, including the Application to Lease or Rent (LRA), and Notice of Termination of Tenancy (NTT).  (more…)