In a California residential transaction, the purchase agreement designates one party to provide a home warranty to the buyer. At closing, the escrow officer deducts the warranty cost from that party's proceeds. Which party is most commonly designated to provide the home warranty under a standard California Residential Purchase Agreement?
Correct Answer
B) The seller, because providing the warranty is a common negotiated concession in California transactions
Under the California Residential Purchase Agreement (C.A.R. Form RPA), home warranty coverage is a negotiable term. It is most commonly the seller who agrees to provide the warranty as a concession to the buyer. When the seller is designated, the premium is deducted from the seller's net proceeds at closing. The party contractually obligated to provide the warranty bears the cost — the purchase agreement controls.
Why This Is the Correct Answer
Why the Other Options Are Wrong
Deep Analysis of This Transfer Of Property Question
Background Knowledge for Transfer Of Property
Real World Application in Transfer Of Property
Common Mistakes to Avoid on Transfer Of Property Questions
Related Topics & Key Terms
Key Terms:
More Transfer Of Property Questions
Determining who pays what at closing involves:
Closing is always the _____ step in real estate transactions.
Depreciation on rental property for federal tax purposes is calculated over:
A title company examines the public records and finds that all deeds in the property's history are properly recorded and connect in an unbroken sequence. This unbroken sequence of ownership is called the
In a jurisdiction where a later purchaser must both lack notice and record before the earlier claimant records, what kind of recording act applies?
- → A buyer records a deed at the county recorder's office. What is the primary purpose of recording?
- → A buyer drives past the property and sees someone other than the seller living there and maintaining the yard. This observation should put the buyer on what type of notice?
- → In a covered purchase transaction, the borrower receives a final form showing the loan terms, cash to close, and settlement charges shortly before consummation. What form is this?
- → Along with the signed offer, Quinn Brooks delivers a check to demonstrate serious intent to complete the transaction if the offer is accepted. What is this deposit called?
- → On a settlement statement, the buyer's earnest money reduces the remaining cash needed to close. How is that item characterized?
- → On a settlement statement, an item increases the buyer's amount due at closing. How is that item characterized?
- → On the seller's settlement statement, the purchase price of $400,000 appears as what?
- → At closing, the purchase price of $350,000 appears on the buyer's side of the settlement statement. Is this amount a debit or a credit to the buyer?
- → Under TRID rules, the lender must deliver the Closing Disclosure to the borrower at least how many business days before loan consummation?
- → In an escrow closing, the escrow agent discovers that the seller has not yet provided the signed deed. What should the escrow agent do?
People Also Study
Buyer Representation Agreement
8% of exam
Property Ownership
10% of exam
Land Use Controls and Regulations
8% of exam
Valuation and Market Analysis
10% of exam
Previous Question
A California escrow has just been opened following execution of a purchase agreement. The escrow officer is preparing the initial escrow instructions and coordinating the early-stage workflow. Which of the following correctly describes the sequence of two activities that typically occur at the SAME early stage of escrow, before contingency deadlines begin to run?
Next Question
A California escrow involves a 1031 exchange buyer whose qualified intermediary (QI) can only wire exchange funds on the actual closing date, but the buyer's lender requires loan funds to be received 24 hours before recording. The seller also has an existing loan payoff that must be wired same-day. Which approach correctly resolves this funding timeline conflict while complying with California escrow law?