Which of the following statements is FALSE statement regarding the PRDS purchase agreements? (Tough question!)
The PRDS contract generally has a more robust section for selecting specific items to be included in the sale than the CAR forms.
The PRDS contract requires that the same party pay for both the escrow fees and the owner’s policy of title insurance.
The PRDS contract allows for a separate title contingency period.
The PRDS contract allows the parties to separate out payment of escrow fees vs. title policy costs.
The correct answer and explanation is :
The FALSE statement regarding the PRDS purchase agreements is:
“The PRDS contract requires that the same party pay for both the escrow fees and the owner’s policy of title insurance.”
Explanation:
The Pacific Union Real Estate Services (PRDS) forms and California Association of Realtors (CAR) forms are both widely used in real estate transactions in California, but they have differences in their structure and the way they address various aspects of the sale, such as escrow fees and title insurance. Let’s break down the statements and explain why the above statement is false.
- The PRDS contract generally has a more robust section for selecting specific items to be included in the sale than the CAR forms.
This statement is true. The PRDS forms are known for their detailed and specific provisions regarding what is included in the sale. This can include personal property, fixtures, and other terms, offering more clarity than the standard CAR forms. - The PRDS contract requires that the same party pay for both the escrow fees and the owner’s policy of title insurance.
This statement is false. The PRDS contract does not require the same party to pay for both escrow fees and the title insurance policy. In fact, PRDS allows the parties to negotiate who will pay for each of these costs separately. It is common in PRDS agreements for the parties to split or separately allocate the costs associated with the escrow and title insurance policies. - The PRDS contract allows for a separate title contingency period.
This statement is true. The PRDS form provides flexibility in structuring contingencies. Specifically, it allows for a separate title contingency period, meaning that the buyer can have additional time to review the title report and raise concerns without being tied to other contingencies like inspections. - The PRDS contract allows the parties to separate out payment of escrow fees vs. title policy costs.
This statement is true. One of the key features of the PRDS contract is that it allows for flexibility in negotiations, including the ability to separate who pays for the escrow fees and who pays for the title insurance policy.
Therefore, the correct false statement is the one about the requirement for the same party to pay for both the escrow fees and the owner’s title insurance policy, which is not a stipulation of the PRDS agreement.