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.
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Related Concepts
Intestate succession is the legal process by which a deceased person's property is distributed according to state law when they die without a valid will. State statutes determine the order of inheritance.
Marketable title is title that is free from reasonable doubt as to who the owner is and free from liens, encumbrances, or defects that would cause a reasonable buyer to hesitate before purchasing. It is also known as merchantable title.
Probate is the legal process by which a deceased person's will is validated by the court and their estate is administered, including the transfer of real property to the named beneficiaries or heirs.
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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?