Updated: Nov 15
The dominant Hampton Roads offer for residential real estate is the Real Estate Information Network Standard Purchase Agreement, dominant in any area where REIN MLS is dominant. In this post, I wanted to share the latest version of it as of this publication date, in its simple form, so that buyers and sellers have it available to read through if desired before making an offer or receiving one. I also wanted to provide some additional associated resources.
Common Surprises for Buyers & Sellers in the REIN Offer
This list & other common surprises lists below are per the 7/3/23 revision of the REIN Standard Purchase Agreement. While there is more than 1 offer possible with REIN MLS listings, this one is the most commonly used.
1. The terms of paragraph 8 (Settlement/Possession) come as a surprise to many buyers and sellers. These terms help more contracts stay in place for common situations with both buyers and sellers by providing extra time after the initially scheduled closing time where extenuating circumstances can provide more time to close following the initial closing date. While another number of days is possible to include, by default the contract states 10 days of extra time for:
a. Processing and closing the specified loan in compliance with applicable law
b. Correcting any defects reported by a title examiner.
2. The terms of section 13 (Inspections/Repairs/Treatments/Cap) provide a % of the purchase price that can cover the following if minimum standards are not met:
1. Appraisal required repairs
2. Wood destroying insect & moisture inspection required repairs/treatment
3. Well/septic treatment/repairs if applicable
4. Walk-through inspection issues
The % by default is 1%. HOA/Condo violations are not within this cap by default, but may be added if desired.
3. Section 18 (Default) provides for remedies in the event that the buyer or seller breaches the contract, such as those who get buyer's remorse or seller's remorse who no longer wish to close after pertinent contingencies have been removed. The earnest money deposit in some cases may go to the seller without requiring buyer signature on a release. The commissions may be pursued by agents in addition to other damages.
4. Section 19 (Dispute Resolution) states that "Prior to initiating any litigation, the parties agree any dispute or claim arising out of, or relating to, this Agreement, the breach of this Agreement, or the services provided in connection with this Agreement, shall be submitted to mediation..."
Common Surprises for Buyers in the REIN Offer
1. There is no release and hold harmless language regarding the earnest money deposit (section 2: Deposit) being all that the seller can go after for damages within the offer itself. In some cases, actual damage to a seller from a breach of contract can go far beyond the earnest money deposit. Only in the release of contract form is there hold harmless language, and there are cases when a termination is possible where no release is signed so that the seller can put the home back on the market and not be stopped from further pursuing damages from the buyer beyond the EMD. See also section 18 (Default).
2. If a mortgage lender is being used, their name will need to be stated in section 6 A (Loan Application). If looking to change mortgage lenders from that lender after presenting an offer, a revision will need to be made & the seller will need to agree to the change for the change to be permitted.
3. While most buyers will be educated enough to know, it's worth mentioning that purchasing a home typically means incurring significant closing costs and prepaid expenses, as mentioned in my article on What do Buyers Need to Purchase a Home? In the typical REIN offer, unless explicitly mentioned in the box under paragraph 4 (Settlement Expenses), the seller won't be covering any of the buyer's closing costs.
Common Surprises for Sellers who Don't Look Closely at the REIN Offer
1. Buyers who don't physically go to a property are more statistically risky than those who are there physically. They are more prone to want out of the contract after ratifying. Look for the check box on section 12 (Property Condition). If the buyer's agent has provided any details on the duration of the showing, the quality of the video showing, the tools (physical & digital) the buyer's agent has it their disposal, or their feedback quality, be sure to pay attention to it. In rare cases, a buyer's agent can be so good that their video showing is better than another buyer's in-person showing in terms of reducing the probability of a contract fall through due to an agent's unusually high degree of thoroughness including showing buyers what most buyers agents don't when in person. For instance, in my case when I represent buyers I may show them typically unseen elements like:
1. scuttle access attics from an agent bringing their own ladder,
2. system ages determined (i.e. water heaters, which is especially rare for agents if in the crawlspace or scuttle access attic),
3. crawlspaces illuminated with the brightest flashlight sold,
4. aerial views when no aerials are posted online
2. While most sellers will be educated enough to know, it's worth mentioning that selling a home typically means incurring significant closing costs and prepaid expenses. Commissions typically take up the majority of that but are not the only expenses involved. In the typical REIN offer, unless explicitly mentioned in the box under paragraph 4, the buyer won't be covering any of the seller's closing costs.
Other Common Offer in Hampton Roads & SE VA: VAR Residential Contract of Purchase
Offers to purchase real estate vary in Hampton Roads, with the Virginia Association of Realtors Residential Contract of Purchase being not too rare, especially in Williamsburg, James City County, & Gloucester, and even more so in locations more distant from Hampton Roads (i.e. Mathews County & New Kent County) due to other competing MLS.
Helpful Resources Associated with the REIN Standard Purchase Agreement
A few helpful resources that I have published that are associated with this offer are:
I also have a "questions for offer" spreadsheet going in detail regarding a buyer's preferences, with references to locations and many hyperlinks, but with hundreds if not thousands of hours put into the composition of the spreadsheet (if hyperlinks I've created are included) & it being unmatched locally to my knowledge by a wide margin, reserve that spreadsheet for buyers I work with directly.
Other REIN Forms
More Helpful SE VA Resources
1. SE VA City Information & Real Estate Property Info (i.e. local tax rates, price/sq ft by city/county, % of properties in flood zones by city/county, flood zone projections, law differences, population density, crime scores by City Data, unemployment, etc.)
5. More helpful articles on area factors, often with SE VA examples or geared specifically toward SE VA
These offers change in minor ways over time, & typically get longer over time. Be sure to view the most up-to-date offer before relying on this one. Also, any time you see writing in blue, it's just part of my typical template, which often is removed entirely or changed based on the situation.
Page 1: Basics (i.e. date, buyer/seller, address, earnest money deposit specific info, purchase price, ratification date)
Page 2: Settlement Expenses (closing costs & prepaids), Earnest Money Deposit Terms, Loan Application Info
Page 3: Loan Application Info Continued, Loan Denial, Occupancy Intent, Representations
Page 4: Representations Continued, Settlement/Closing Terms/Date
Page 5: Settlement/Closing Terms Continued, Deed & Title Representations, Lender's Title Insurance, Survey
Page 6: Survey Continued, Prorations/escrow, Appraisal/Financing Contingencies
Page 7: Appraisal Contingency Continued, Property Condition, Physical Inspection, Home Inspection, Repairs Cap Agreed to by Seller in Advance, Appraisal Required Repairs, Wood Destroying Insect/Moisture Inspection/Repairs
Page 8: Wood Destroying Insect/Moisture Treatment/Repairs Continued, Drinking Water & Septic, Walk Through Inspection, Contingencies Starting with Condo Contingency
Page 9: Condo Contingency Continued, Property Owners' Association Contingency
Page 10: Property Owners' Association Contingency Continued, Co-Op, Property Inspections
Page 11: Property Inspections Continued, Other Contingencies, Items to Convey, Confirmations & Disclosures
Page 12: Confirmations & Disclosures Including Brokerage Relationship Disclosure, Aircraft Noise Zone Disclosure, Residential Property Disclosure, Agency Interest Disclosure, Megan's Law Disclosure, & Mechanics Lien Disclosure
Page 13: Mechanics Lien Disclosure Continued, Measurements, Building or Zoning Violations, Methamphetamine Disclosure, Lis Pendens, Brokerage Fee, Default, Dispute Resolution
Page 14: Dispute Resolution Continued, Other Provisions, Non Assignment, Tax-Deferred Exchange, Notices, Miscellaneous
Page 15: Miscellaneous Continued, Digital Signatures
Page 16: Signatures & Other Information For Buyer(s), Seller(s), Agents, & Firms
Related for Buyers:
1. House Buyer Guide primarily geared toward the framework of the REIN Standard Purchase Agreement
Related for Sellers:
1. House Seller Guide primarily geared toward the framework of the REIN Standard Purchase Agreement