What You Need to Know about the Real Estate Settlement Procedures

The Real Estate Settlement Procedures Act, better known as RESPA, is a federal consumer statute that was enacted into law in 1974 to protect the property-buying public from being ripped off by the real estate industry, which consists of title insurers, escrow companies, mortgage and deed of trust lenders, mortgage brokers, real estate agents, and attorneys who perform real estate settlements or closings. HUD is responsible for enforcing RESPA nationwide. And according to HUD, the

FORM 20.2 Sample Real Estate Purchase Agreement

This Agreement is made this ninth day of July 2005 between Donald S. Reed, a single man, known hereinafter as the Buyer, and Robert D. Johnson, a single man, known hereinafter as the Seller. Seller agrees to convey, transfer, assign, sell, and deliver to Buyer or assigns all of Seller's rights, title, and interest in and to the following property known as: 45735 Hillsborough Avenue, Tampa, Florida 33603, and legally described as: Lots 47, 48, and 49 of Carters subdivision according to map or plat thereof as recorded in plat book 69, page 89, of the public record of Hillsborough County, Florida, which Seller agree to sell to Buyer and Buyer or assigns agrees to buy from Seller.

Purchase Price $350,000.00

Method of Payment:

Real estate option consideration paid in the amount of $5,000.00

Buyer to assume that first mortgage loan with an approximate principal balance of $295,000.00

and dated August 28, 1997, and executed by Robert J. Johnson, as mortgagor, to Bank of America, as mortgagee, in the original amount of three-hundred and five thousand dollars ($305,000), which mortgage was duly recorded in the office of the Clerk of the Circuit Court of Hillsborough County, State of Florida, in book 790346, on page 45905, of the public records of Hillsborough County, Florida.

Balance to close the transaction payable in United States currency by cashier's check drawn on a local bank, subject to prorations or adjustments $50,000.00

Any net differences between the approximate balance of the existing encumbrance shown above and the actual balance at closing to include all unpaid loan payments, accrued interest, late charges, legal fees, taxes, liens, judgments, assessments, and fines shall be adjusted to the purchase price at closing.

All proration computations shall be made as of the previous day before the closing date using the three hundred sixty-five day method. The following items are to be prorated:

1. Real estate taxes for the year of closing. If the taxes for the current year can't be ascertained, any tax proration based on an estimate shall be readjusted on receipt of the tax bill on condition that a statement to that effect is in the closing statement.

2. All statutory liens and assessments recorded against the property as of the closing date shall be paid by the Seller.

3. All water, sewage, electricity, natural gas, and other similar utility charges.

4. Rents due from tenants of the property, as set forth on the rent roll. Seller shall be entitled to receive rent payments for the period up to the day before closing. Buyer shall be entitled

FORM 20.2 Sample Real Estate Purchase Agreement (Continued)

to receive all rent payments from and including the day of closing. All rents shall be prorated on the basis of rents actually received.

Seller shall furnish to Buyer copies of all rental agreements and an estoppel letter from each tenant specifying the nature and time of occupancy, amount of rent, and advance rent and security deposits paid.

At the closing, Seller shall deliver the following to the Buyer:

1. Possession of the property, subject to those rental agreements set forth on the rent roll. Delivery of possession of the property shall not be subject to the rights of any other person or entity.

2. Bill of sale for all personal property.

3. Assignment of all tenant rental agreements.

4. All tenant security deposits.

5. A valid certificate of occupancy issued by the appropriate government agency.

6. All blueprints, surveys, and keys to the property.

7. Rent roll listing all tenants residing at the property.

8. All insurance policies and mortgage documents being assumed by the Buyer.

Title to the property shall be conveyed from Seller to Buyer by warranty deed at the closing.

Buyer may assign or otherwise transfer any of Buyer's rights, title, and interest in and to this Purchase Agreement without the Seller's consent.

Buyer and Seller authorize Mr. John B. Good, Attorney at Law, to act as Escrow Agent to receive, deposit, and hold funds and other items in escrow, subject to clearance, disburse them on proper authorization and in accordance with the terms of this Real Estate Purchase Agreement.

IN WITNESS WHEREOF, Seller has set his hand the date aforesaid.

Seller Buyer

Witness Witness

Sally M. Little _

Witness Witness

Copyright Thomas J. Lucier 2005. To customize this document, download it to your hard drive from Thomas J. Lucier's web site at www.thomaslucier.com/optionforms.html. The document can then be opened, edited, and printed using Microsoft Word or another popular word processing application.

purposes of RESPA are: "To help consumers become better shoppers for settlement services and to eliminate kickbacks and referral fees that unnecessarily increase the costs of certain settlement services." To learn more about RESPA, log on to the following web page: www.hud.gov/offices/hsg/sfh/res/respa_hm.cfm.

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