Chapter 1
Virginia Real Estate Law & Agency
Course: Virginia Real Estate Exam Prep
Subject: Virginia State Salesperson Exam Prep
Chapter: Contracts Virginia Forms
REIN Forms as the Standard: The Real Estate Information Network (REIN) forms are widely used and recognized across Virginia. Using them provides a layer of protection as their language has been reviewed by attorneys and is familiar to the industry.
Key Clauses in Depth:
- Home Inspection Contingency (The "Due Diligence" Period): This is arguably the most critical contingency for a buyer. It establishes a window (commonly 7-14 days) for the buyer to conduct inspections. The process is:Inspections are performed.Buyer can either: (a) Accept the property, (b) Request repairs/credits via an Amendment, or (c) Terminate the contract.If the buyer does nothing by the deadline, they may be deemed to have accepted the property "as-is."
- Inspections are performed.
- Buyer can either: (a) Accept the property, (b) Request repairs/credits via an Amendment, or (c) Terminate the contract.
- If the buyer does nothing by the deadline, they may be deemed to have accepted the property "as-is."
- Appraisal Contingency: Protects the buyer if the property appraises for less than the contract price. The standard language often gives the buyer the right to terminate, or the parties can renegotiate the price. In competitive markets, buyers sometimes waive this contingency, which is a significant risk.
- Liquidated Damages Clause: This specifies the amount of earnest money the seller may retain as sole remedy if the buyer defaults without a valid contingency excuse. It prevents the seller from having to sue for larger, harder-to-prove damages.
- "Time is of the Essence": This clause, present in most REIN contracts, makes every date and deadline strict. Being a day late on a contingency or settlement date can constitute a material breach.