Ask Kathy: Counter Offer Numerical Sequencing and C.A.R. Q&As

Q. Ever since the November forms release there seems to confusion among REALTORS® (and every other participant in the transaction) regarding the correct numbering of Counter Offers! Why did C.A.R. create Buyer and Seller Counter Offers if the numbering was going to be such a big deal?

A. When C.A.R. released the new forms in November the former generic / all-purpose Counter Offer was replaced by two new forms: Seller Counter Offer (SCO) and Buyer Counter Offer (BCO). This change was made so that zipForms could be programmed to pre-tag the proper parties’ names in the correct lines and to pre-tag for signature. It was a great plan but caused much confusion in the field. It seems that many members/users were confused about how to number the Counter Offers.

The dilemma: Should they be numbered SCO #1, followed by BCO# 1 (which makes perfect sense because it is the first Buyer Counter Offer), which would then be followed by SCO #2 and then BCO # 2 and so on? Or should they be numbered sequentially as with the former Counter Offer: SCO #1, BCO #2, SCO #3, BCO #4 and so on? I can’t tell you how many questions I have received on this subject!
Word from C.A.R. revealed that in their opinion the numbering of Counter Offers is nothing more than a tracking mechanism so from a legal standpoint they felt either method was acceptable.

At the C.A.R. business meetings last January, the Standard Forms Advisory Committee presented this issue to directors and members at the open Forum on Forms meeting. That meeting revealed a split decision regarding the preferred numbering process. C.A.R. was asked to provide guidance on how to best eliminate the confusion and recommend a best practice, so they did!

The recommendation from C.A.R. (and Coldwell Banker Residential Brokerage agrees) is that Counter Offers be numbered as follows: SCO #1, BCO #1, SCO #2, BCO #2, SCO #3, BCO #3 and so on.

In conjunction with the April 2015 forms release zip Forms will include six pre-numbered copies of the SCO and the BCO No. 1 through 6. The printed forms will not be pre-numbered.

Q. Is there set rule on how many Counter Offers are too many?

A. There is no rule or regulation regarding what might be considered an acceptable number of Counter Offers in a given transaction. A best practice would be to carefully assess and evaluate the content of the Counter Offer(s) as the process moves forward. How complicated are the revisions to the terms of the Agreement? Are the Counter Offers lengthy? Are the terms clearly stated to the satisfaction of the Parties’? Common sense is the order of the day, if the process is getting too unwieldy just start over with new Residential Purchase Agreement so that the Agreement clearly states the desired terms.

Q. Are there any new C.A.R. Q & A reference materials that would be useful for review?

A. C.A.R. provides an abundance of reference materials; the Q&A is one of the best and it is rare to find a subject that is not included! A few new or revised Q&As that you may wish to review are mentioned below, links are included for you convenience. The path to locate the full library of Q&As is:

Landlord Tenant Law: Pets and Service Support Animals
The Agency Disclosure and Confirmation of Agency Law Summary Chart
Fictitious Business Names and Team Names
Common Real Estate Investment Formulas

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Ask Kathy: Properties Subject to Agency Laws & Disclosure Regarding Real Estate Agency Relationship

Q. I heard a rumor that the Agency Law was recently changed to include properties other than residential one-to-four units, mobile homes, leases for more than one year, is that true?

A. Glad you asked! Yes it most certainly is true. SB 1171 amends California Civil Code Section 2079.13 by requiring compliance with Agency Law in all commercial real property, including leasehold. This law became effective January 1, 2015.

SB 1171 defines commercial real property as all real property in the state with the exception of single-family residential real property and mobile homes (which are already covered under the existing law); this means that compliance with Agency Law now includes industrial, commercial and vacant land, except property improved with 5+ residential units.


The California Association of Realtors® recently revised the Agency Disclosure and Confirmation; and Agency Law Summary Chart – CLICK HERE to DOWNLOAD. Review this important summary and all of your questions will be answered!

Q. When should the Disclosure Regarding Real Estate Agency Relationships be given to the Buyer?

A. The law, California Civil Code Section 2079.14, states that that the selling agent shall provide the disclosure form to the buyer as soon as practicable prior to the execution of the buyer’s offer to purchase. That doesn’t mean you are prohibited from providing it well in advance of an offer to purchase. For example, entering into a discussion regarding real estate agency relationships early in the process can go a long way toward building a strong foundation for the relationship with the buyer!

When you undertake the process of forming a relationship with a prospective buyer the more information you convey the more respect and trust you will earn. Opening up a dialogue around agency relationships at the onset is also a great way to avoid misunderstandings later!

Q. If I represent a buyer who writes an offer on a listing held by a different brokerage firm, am I really obligated to provide the seller with a Disclosure Regarding Real Estate Agency Relationship (AD) before my buyer’s offer is presented?

A. Yes. However, we know that a buyer’s agent rarely has the opportunity to present offers in person, making sure the seller receives your AD can be challenging. One tip I can offer: include a standard cover letter with your offer. Make sure it is the first page the listing agent will see and include a specific request to provide the AD to Seller PRIOR presenting the terms of your offer. CLICK HERE to DOWNLOAD a simple template designed for just this purpose. Feel free to modify the language to fit your style.

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Ask Kathy: Notices to Perform, Arbitration and Liquidated Damages and Personal Property Items Included in Sale

I hope you enjoy reviewing this week’s Q&A! A big thank you to all of you who have submitted questions for our blog! Keep them coming and if for any reason you do not see your specific question posted please send it again!

Q. When issuing a Notice to Buyer to Perform (NBP) or a Notice to Seller to Perform (NSP) how is the time frame for performance tracked – hours or days and does it make a difference?

A. Both the NBP and the NSP provide the Parties with an opportunity to take the specified action within 2 Days After the Notice is personally received. Keep in mind the timeframe in Paragraph 14 D. may be modified by mutual agreement.

Before I answer your specific question I would like to point out the distinction between hours and days. Do not confuse 48 hours with 2 days! For example, if a Notice to Perform is issued at 3:00pm on a given day the 48 hours would end at 3:00pm on the final day. Paragraph 30 G – ”Days After” specifically states that the Day ends at 11:59 pm. This is the case with any Notices to Perform.

The time period for performance under a NBP or a NSP is tracked by Days not Hours and the day ends at 11:59pm!

Q. What is the best way to answer a Buyer’s question(s) regarding Liquidated Damages or Arbitration?

A. While we strive to provide the best brokerage advice possible, we do not offer legal advice. Buyers are best served when their REALTOR® provides relevant information for their consideration.

The STATEWIDE BUYER AND SELLER ADVISORY, Paragraph 47 – LIQUIDATED DAMAGES and Paragraph 49 – ARBITRATION, offer Buyers valuable information with respect to these provisions each paragraph includes specific language that states: “Buyers and Sellers must decide on their own, or with the advice of legal counsel, whether to agree to a liquidated damages/arbitration clause. Brokers do not have expertise in this area.”

Q. Last week I heard a terrible story from a REALTOR® friend of mine! She sold a property that was listed in the MLS; in the remarks the listing agent stated that Playhouse, Barbeque and Patio Furniture in the backyard were all included in the sale. Because the MLS represented these items as included in the sale she did NOT mention these items in the Purchase Agreement because it wasn’t necessary. When the Seller moved he took all of those items with him! Isn’t that a breach of contract? It seems wrong to me.

A. Not at all! Paragraph 8 A. NOTE TO BUYER AND SELLER addresses this very subject. The language states: “Items listed as included or excluded in the MLS, flyers or marketing materials are not included in the purchase price or excluded from the sale unless specified in paragraph 8. B. or C.”

The lesson to be learned, when personal property is to be included or real property excluded include specific language in the Purchase Agreement, Counter Offer or Addenda! Ask questions; determine the client’s expectations and put it in writing! Managing expectations is a key component to a smooth flowing transaction and happy clients! Remember, “Nobody likes Surprises!”

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Ask Kathy – Off Market Listings / Pocket Listings

We are pleased to report that the majority of the zipForm glitches were corrected in February and the balance will be corrected in conjunction with the upcoming release during the week of April 27th – CLICK HERE for a quick summary of the new forms and revisions in the April release. As always, you will find the most recent form revisions posted at the website under Legal > Standard Forms > New Forms and Revisions or CLICK HERE.

For this week’s Ask Kathy I selected a question regarding a “Hot Topic” – Pocket Listings! Take a moment to review the question and answer and, as always, I am happy to follow up with any additional concerns or questions you may have!

Q: I keep hearing the term “Pocket Listing” from my colleagues – can you define it for me?

A: There are multiple interpretations of a “Pocket Listing” – here are mine!

1) Most common understanding:

a. A property that is subject to a Residential Listing Agreement, fully executed by Seller(s) and Broker(s) including price, terms and payment of Broker compensation;
b. The Seller(s) after considering the consequences instructs Broker(s) to withhold the property from the Multiple Listing Service (MLS);
c. The Seller(s) Agents and Broker(s) execute a Seller Exclusion (SELM) from the MLS;
d. The property is marketed to a select group of potential Buyers and Brokers;
e. Because the property is not placed in the MLS there is no “presumed understanding” of any Broker to Broker commission sharing agreement.

2) Frequent interpretation:

a. The Broker(s) secures the Seller(s) signature on a Single Party Compensation Agreement including price, terms any payment of Broker compensation;
b. The property is marketed to a select group of potential Buyers and Brokers;
c. Because the property is not placed in the MLS there is no “presumed understanding” of any Broker to Broker commission sharing agreement.
d. A best practice would be to obtain the Seller’s signature on the SELM
f. Disclosure Regarding Real Estate Agency Relationship is a prerequisite

3) Often describes what I call an “Imaginary Listing”

a. No underlying agreement between Seller(s) and Brokers(s) regarding price and terms;
b. No agreement to pay either Listing or Selling Broker(s) compensation.

While these are brief and not necessarily all encompassing definitions, you can see that asking questions before showing a “Pocket Listing” is quite important. In the above scenarios the Selling Broker is NOT automatically entitled to compensation!

A few tips for Selling Agents – before showing the property: (i) Ask the Broker representing the Seller to, at the very least, show you a copy of their authority to market the property (ii) Ask the Broker representing the Seller to enter into a commission sharing agreement with you; the Cooperating Broker Compensation Agreement is the preferred form to achieve such an agreement. Remember, neither the act of showing a property or writing an offer on behalf of the buyer entitles the Broker to compensation – even if the offer is accepted by the seller.

Paragraph 18A of the Residential Purchase Agreement (RPA) clearly addresses Broker Compensation:

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Ask Kathy: Appraisal, Loan Contingencies and Default Provisions

Q. I am somewhat concerned about the timeframe modifications for the removal of the Appraisal and Loan Contingencies. Is 17 days a sufficient window of time for the Buyer and their Lender to obtain and approve an Appraisal? And I’d like to know why the timeframes are different, why is the Loan Contingency timeframe 21 days? Is it really enough time to satisfy these contingencies?

A. When the Study Group deliberated on the subject the Appraisal and Loan Contingencies there were many issues to consider. Ultimately it was determined that the timeframes for the Appraisal and Loan Contingency Removal should be staggered. The rationale “behind the Study Group curtain” was based on the fact that most Buyers would want to be certain the property appraised at the agreed upon sales price before removing the loan contingency.

Remember, in the previous Residential Purchase Agreement (“RPA”) the timeframe for removing BOTH Appraisal and Loan Contingencies was 17 days! In addition, if you recall, in the previous RPA the default provision was that Appraisal Contingency was deemed to be removed upon removal of the Loan Contingency, unless otherwise specified in the Agreement. The Study Group decided that it would be preferable to establish two completely separate Contingencies.

When you consider the above you will see that the revisions in the new RPA are much more satisfactory. The Buyer may wish to instruct their REALTOR® to increase the timeframes for either Loan or Appraisal Contingency should they or their lender be concerned. Just another reason for Buyer’s to complete the pre-approval process with a lender they can trust and in whom they have confidence and to do so in advance!

Q. I am embarrassed to “Ask Kathy” this question but I heard you say that any and all questions are welcome so here goes: In the RPA classes I’ve heard you use the term “default provision” – I just can’t remember how you explained what it meant – so what exactly does that mean?

A. All questions welcome! When used in the context of a timeframe or provision of the Residential Purchase Agreement (“RPA”) the term “default provision” means that if you do not select a different option the standard preprinted language in the contract will prevail. For example; the timeframe set forth in the RPA for the removal of Buyer’s Appraisal Contingency is 17 days, right? That is the “default provision” if no other timeframe is selected. Should the Buyer wish to extend the timeframe for that or any other contingency or contractual action another selection would need to be inserted.

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Ask Kathy: Electronic and Mutually Exclusive Boxes

2015 is ringing in with a number of Questions for Kathy to answer! Here, for your reading pleasure, are a few of the most frequent! Please keep the questions coming. If you have zipForms technical concerns include those questions as well. If I don’t know the answer, I’ll be sure to track it down for you.

Q. My client just asked me this question: “Where in the Residential Purchase Agreement does it authorize electronic signatures?” I am sure it is there somewhere but I couldn’t locate it, can you help?

A. Ten pages of small print is a lot of information to sort through! While it isn’t actually a “permission slip” there is reference to electronic signatures can be found in Paragraph 30. M, which is titled Definitions. The term “Signed” is defined as follows: “Signed means either a handwritten or electronic signature on an original document, Copy or any counterpart.”

The permission or agreement is formed when using Digital Ink or DocuSign. Each transaction includes a formal separate agreement to utilize electronic signatures. If accepted by the Parties permission is thereby granted.

Q. While preparing an Offer on the revised Residential Purchase Agreement my Buyer instructed me to enter a zero in paragraph 3. D (1) in order to limit the Buyer’s obligation to pay points. I tried to do so but could not manage to enter either a zero or N/A (non-applicable). What is the secret?

A. Not really a secret, but it does require the use of specific technique. When you are preparing to enter the information into the field limiting points try this: Hit the space bar twice then enter the zero (0); it should work just fine!

Q. When attending the training that you and Sandra provided I was fairly certain that the revised Residential Purchase Agreement (RPA) would have a new functionality that would prevent the preparer from entering both a date certain and the number of Days from Acceptance for the Close of Escrow. I think you called it “mutually exclusive check boxes.” I just prepared a RPA and tried it out, just to see how it worked and zipForms allowed me to enter both! What’s up?

A. You heard right! Both Sandra and I said just that! However, we have since learned that the zipForms programmers, for reasons of their own, decided not to include that functionality in the November 24 release. I am pleased to report that the mutually exclusive check boxes for the Close OF Escrow are NOW functional!

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Ask Kathy: Perspective on Wood Pest and the RPA

Q. I understand that the revised Residential Purchase Agreement no longer includes pre-printed reference to a Wood Pest Inspection and Report in paragraph 7 A. In addition, the Wood Destroying Pest Inspection and Allocation of Cost Addendum (WPA) has been retired. My question is – why? If you explained the reason it would be easier to communicate the new approach to Buyers and Sellers!

A. Great question! I agree that when we are made aware of the reason for change, it makes it much easier to understand and explain to others. This is the very reason I recently wrote a comprehensive article addressing the background, rationale for making the changes and “talking points” to assist with client communication. I call it “Perspective” and have posted it below. In addition, CLICK HERE to review the C.A.R. Question and Answer titled: Wood Destroying Pest & Organisms Inspections, Reports & Repairs.

Revised Residential Purchase Agreement (RPA) – “Perspective”
Kathy Mehringer – Coldwell Banker Residential Brokerage
RPA Study Group Chairperson

In October 2012 the California Association of Realtors® leadership team appointed a Study Group to assess the current Residential Purchase Agreement and submit recommendations for revisions.

The Study Group was comprised of practitioners, attorneys, brokers and managers with representation from both Southern and Northern California. Over a two year period nearly one thousand comments and suggestions were reviewed and analyzed, dozens of meetings and conference calls were held and then, in 2014, the California Association of Realtors® Standard Forms Advisory Committee approved the implementation of a newly revised Residential Purchase Agreement which was released in November 2014.

In many ways the language in this revised purchase agreement is intended to alter the way real estate sales are negotiated in California, establishing greater consistency throughout the state. For example, all of the Buyer investigations and due diligence are facilitated in the same manner; the appropriate professional is usually selected, hired and paid by the Buyer.

To accommodate this change, the Allocation of Cost provision no longer includes pre-printed reference to: sewage disposal systems, domestic wells, or wood pest inspections. In addition, the Wood Pest Allocation of Cost Addendum was retired; the intent of these changes is to eliminate the practice of pre-allocating costs for Section 1 and 2 corrective work. The Purchase Agreement now intends that these items are to be negotiated after all inspections are ordered by the Buyer (or Seller) and received by all Parties.

A Buyer may certainly request correction of Section 1 or Section 2 items; the recommended vehicle to make such requests is the C.A.R. Form Request for Repairs which allows both Buyer and Seller to make educated decisions after all inspections and reports are available for review.

Some companies and/or their agents have opted to create their own “homemade” versions of a Wood Pest Allocation of Cost Addendum; that decision may prove to be risky and should be carefully evaluated by management and brokerage counsel.

When representing Sellers it is important that they be advised of the risks associated with agreeing to any repair costs prior to understanding the true financial impact. The Sales Associate has a duty to counsel and advise clients as to the pros and cons of their decisions. Whether a Seller is asked to correct wood pest defects or other property conditions, they should first be aware of the full scope of work and the financial impact of such decisions. This is one of most significant reasons the “pre-allocation” concept was eliminated. Sellers ought to understand that they have the right to “counter out” any terms or addenda that pre-allocate unknown costs. Sellers who are considering accepting responsibility for pre-allocated and unknown expenditures are well served by consulting with legal counsel prior to forming such an agreement.

The talking points below may be useful when discussing any repair requests with Buyers and Sellers:

A pre-allocation of any cost, when an amount has not been specifically determined, amounts to a blank check and could result in an expense far greater than anticipated.

A Seller who commits in advance to correcting Section 1 and/or Section 2 defects may not fully understand the scope of work required including but not limited to fumigation which can entail a double move. For that reason it may better serve the Seller’s interest to wait until the Wood Pest Inspection and Report is received and reviewed PRIOR to making a decision

A Buyer who commits in advance to accepting responsibility for correcting Section 1 and/or Section 2 defects may not fully understand the scope of work required. For that reason, it may better serve the Buyer’s interest to wait until the Wood Pest Inspection and Report is received and reviewed PRIOR to making a decision

A Seller may wish to authorize the Listing Broker to arrange for a Wood Pest Inspection and Report prior to receiving an Offer because they may wish to anticipate what costs would be associated with any subsequent repair request from the Buyer. In that case, the Seller needs to understand that the Inspection Report, regardless of findings, must be provided to the Buyer.

The delivery of any reports, investigations, or other inspections is best documented by using the C.A.R. Receipt for Reports. This form includes language whereby the Buyer acknowledges receipt of report(s), documents(s) or disclosure(s) (“Reports”) while making it clear that the broker has not verified the Reports with respect to their adequacy, completeness, or the performance of the person preparing such inspections or Reports. In addition, paragraph L. states: “These Reports should not be considered as a substitute for obtaining your own inspections and Reports covering the same items and any other matter affecting the value and desirability of the property.” CLICK HERE for SAMPLE FORM

When Buyers select and hire their own qualified inspectors they not only have the benefit of choice but they can act in reliance on those choices.

C.A.R. Form Request for Repairs has been revised and now affords Buyers the opportunity to request correction of Section 1 and/or Section 2 recommendations along with any other corrective action relating to the property.

C.A.R. Form Seller Response and Buyer Reply to Request for Repair provides Seller the options of performing the requested repairs, issuing credits or agreeing to price concessions; remembering that financial credits are to be disclosed to and approved by Buyer’s lender.

When a Buyer is securing FHA or VA financing the contract includes language in paragraph 3 D. (3) that sets forth the process for negotiating Lender required repairs including Wood Destroying Organisms. Briefly, the Buyer has 17 (or___) Days After Acceptance to Deliver to Seller notice (C.A.R. Form FVA – CLICK HERE for SAMPLE FORM) repairs or costs……”

C.A.R. just published a Question and Answer addressing some of the most frequently asked Wood Pest questions; please review and save for reference along with this article! CLICK HERE to DOWNLOAD.

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Ask Kathy: More on the Additional Signature Addendum (ASA)

This past week I received a good deal of spirited input regarding the previous Ask Kathy where I discussed the Additional Signature Addendum (“ASA”).  Today I will dedicate Ask Kathy to addressing some of the issues raised.

Q. I read your post regarding the Additional Signature Addendum (“ASA”), and afterwards attempted to prepare a sample on zipForms and I couldn’t even fit two complete form names in the field [ ]Other! So my question is, other than preparing a separate ASA for every transaction document, is there an alternative?

A. You are absolutely correct; the space is limited! What I learned after receiving your email is that the “shrinking font” feature of zipForms is not available in the ASA field [ ]Other! If it were you might be able to insert the full names of additional transaction documents. I did learn that zipForms is considering activating the Text Overflow functionality to line that follows [ ]Other. If that enhancement is added there would be unlimited space as the text would automatically flow into the Text Overflow Addendum (“TOA”)!

In the meantime and as alternative going forward you may reference an Addendum in the [ ]Other field and include the names of specific transaction documents. Remember, transaction documents specified must be provided at the same time as the ASA! Each grouping of transaction documents would require an additional ASA .

Q. In most transactions there are only one or possibly two additional Buyers or Sellers. Isn’t there some way to add one or two additional signature lines without the ASA?

A. Yes, there sure is! If you are using DocuSign or zipLogix Digital Ink® for digital signatures you are able to add at least two additional Buyers or Sellers initials and signatures on most every transaction form! Simply choose the defined task and drag and drop the initial or signature into place as needed.

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Ask Kathy: Additional Signature Addendum

Questions regarding the Additional Signature Addendum (ASA) are pouring in; for that reason this week I will focus on those particular inquiries:

Q. Why didn’t C.A.R. add additional signature lines for Buyer and Sellers? So many of our transactions include three or more clients!

A. The RPA Study Group did consider doing just that! In fact, we instructed C.A.R. to prepare a draft with four signatures for both Buyer and Seller. When we saw the draft we quickly realized it just wouldn’t work. Not only from a spatial perspective but also the appearance of the form “suffered greatly in the translation” – as the saying goes!

In transactions where there are multiple Buyers and Sellers / Lessors and Lessees the Additional Signature Addendum (ASA) is the recommended form (CLICK HERE for SAMPLE). It may be used to add as many as three additional signatures.

Q. When using the Additional Signature Addendum (ASA) in a transaction is it necessary to prepare a separate ASA for each document or can I just use one for the entire transaction?

A. In transactions where there are multiple Parties signing a separate ASA is needed for each document. This includes; contractual forms, advisories, disclosures, addenda etc. It is possible to include multiple file documents on one ASA. This is done by checking the [ ] Other field and inserting the documents names, remember if other documents are referenced they are to be delivered at the same time. You may have noticed that limited characters are permitted which in turn limits the number of documents that may be referenced.

I have requested that the C.A.R. Standard Forms Advisory Committee consider not only expanding that field but also adding the word “additional” – if they agree it would read [ ] Other or Additional. At the very least we should see the field expanded in the near future!

Q. I just completed an Additional Signature Addendum (ASA) and was discouraged to find that I was only able to reference one or two additional documents if I used the full name versus the acronym. What’s up with that?

A. Because of the current spatial constraints, the zipForms library permits as many as five Additional Signature Addendum per transaction. By using the [ ] Other field to reference additional documents five MAY be sufficient to reference all necessary transaction forms. In conjunction with my suggestion regarding increasing the characters permitted to describe other forms I have offered as a possible alternative; increasing the number of ASA forms per transaction!

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Ask Kathy: The “Dotted Line”

Today I respond to three questions I recently received regarding signatures relating to a few of our transactional forms: Representative Capacity Signature Disclosure, Disclosure Regarding Real Estate Agency Relationships, and the Natural Hazards Disclosure Statement.

Q.  I would like to know if a client is permitted to sign the Representative Capacity Signature Disclosure ( C.A.R. RCSD) electronically using docusign or digitalink, will you let me know? 

A.  Yes, it is permitted.  Electronic signatures are valid and binding as described in the Definition Paragraph 30 M:

There are some narrow exceptions with respect to the use of electronic signatures in real estate transactions but those are limited to certain lease documents and forms.


Q.  I am only able to insert one associate-licensee name at the bottom of the Disclosure Regarding Real Estate Agency Relationships (AD)! I thought when the forms were revised they were modified to allow two associate-licensee names in order to accommodate transactions when more than one agent is representing Buyer or Seller?


A.  Currently the Disclosure Regarding Real Estate Agency Relationships (AD) does not provide an additional line to add a second independent associate-licensee signature.  The Residential Purchase Agreement (RPA) was revised to permit two selling and/or two listing associate-licensee names to be inserted in the Broker Box on page ten, but the AD was not similarly revised.


I have submitted a suggestion to C.A.R. asking that the AD be redesigned to provide an additional line because so many transactions involve two agents representing Buyer or Seller.  In the meantime, the Additional Agent Acknowledgment (AAA) may be used in order to make it clear to your client that when one associate-licensee signs transaction documents the other is deemed to have signed as well


Q.  I am hoping you can clear up my confusion regarding the Natural Hazards Disclosure Statement!  As a real estate licensee am I obligated to sign the Statement?  And does it matter if I am the listing or selling agent?


A.  The Natural Hazards Disclosure Statement (NHD) is required in accordance with California Civil Code 1103.2 (a) as it serves as a “receipt” to prove that the required disclosures were provided to the Buyer, as referred to in the NHD, the Transferee. The NHD itself is set forth in the Civil Code.


The Seller, as referred to in the NHD, the Transferor is required to sign the Statement as is their Agent(s). In reviewing the NHD (CLICK HERE for SAMPLE) you will see that immediately below the Transferors signature there are two signature lines for the Agent(s) of the Transferor.  Moving to the bottom of the page you will see the only signature lines for the Transferee(s).


The short answer; the listing agent(s) sign below the Transferor(s).  The selling Agent(s) do NOT sign below the Transferee.
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