California Purchase Agreement (RPA) Explained (2026)

The California Residential Purchase Agreement (RPA) is the standard purchase contract published by the California Association of Realtors (C.A.R.) and used in the large majority of California home sales. It sets the price and terms, then locks in default contingency periods — 17 days to complete inspections, 17 days to remove the appraisal contingency, and 21 days to remove the loan contingency, all counted from the date of acceptance unless the parties agree in writing to different numbers. The RPA is a C.A.R. form, not a DRE-mandated one. The Department of Real Estate does not require any specific purchase contract; a broker may use RPA, a proprietary in-house form, or another board-approved template. RPA's near-universal adoption in practice — and the fact that its default numbers are what the salesperson exam is written around — is why every new agent needs to know its mechanics cold, not just its name. The form itself runs roughly nine pages of check-boxes and blanks, but the legal weight sits in a handful of paragraphs: the contingency timelines, the deposit and escrow instructions, and the liquidated damages clause. Get those four pieces right and the rest of the form is administrative. Because RPA is a proprietary C.A.R. form, agents who are not Realtors technically cannot use it — non-member brokers use a similar but separately published form, and some regions still see the older single-family residential purchase agreement referenced by name in older exam prep materials. The mechanics tested on the exam, however, are the same regardless of which brand of form a broker uses.

Three separate contingencies run on their own clocks in the current RPA, and confusing them is one of the most common mistakes new agents and exam takers make. The inspection contingency defaults to 17 days and covers the buyer's right to investigate the property's physical condition, pull permits, walk the property with a licensed inspector, and review the seller's disclosures before committing further. This is the broadest of the three contingencies — it is not limited to physical defects and typically doubles as the buyer's general due-diligence and "cold feet" window, since most RPA versions let a buyer cancel for any reason during this period without forfeiting the deposit. The appraisal contingency, split out as its own paragraph in the modern RPA rather than folded into the loan contingency, also defaults to 17 days and protects a financed buyer if the lender's appraisal comes in below the contract price. If the appraisal is low and the contingency isn't removed or waived, the buyer can cancel and recover the deposit rather than being forced to make up the shortfall in cash. The loan contingency defaults to 21 days and covers the buyer's ability to secure firm, unconditional loan approval — not just pre-qualification. All three periods are default numbers only. Buyers and sellers routinely negotiate them shorter (7- to 10-day inspection windows are common in competitive, low-inventory markets) or longer (30- to 45-day loan contingencies are standard for jumbo or non-conforming financing), and any change to the printed defaults must be made in writing and initialed by both parties. Missing a contingency removal deadline without a signed extension can put a buyer's deposit at risk, which is exactly why the liquidated damages clause matters.

If a buyer defaults after contingencies are removed, the RPA's liquidated damages clause — not a lawsuit for the seller's actual, provable damages — is what usually determines what happens to the deposit. California Civil Code §1675 sets the ceiling: if the amount the seller actually keeps does not exceed 3% of the purchase price, the clause is valid and enforceable unless the buyer affirmatively proves the amount is unreasonable. If a seller tries to keep more than 3%, the clause flips presumptively invalid, and the burden shifts to the seller to prove the higher amount is reasonable given the circumstances at the time of contracting. The 3% figure is not automatic just because it is typed into the contract. Civil Code §1677 requires the liquidated damages provision to be separately signed or initialed by both the buyer and the seller — a signature on the main contract page does not count — and printed in at least 10-point bold type, or in contrasting red print of at least 8-point bold type if it appears in a pre-printed form. A clause buried in regular body text, or initialed by only one party, is unenforceable regardless of the percentage. Civil Code §1678 adds a further wrinkle for staged deposits: if more than one payment from the buyer is meant to count toward liquidated damages, each additional payment beyond the first needs its own separately signed or initialed provision satisfying §1677. On a $700,000 sale, a validly executed 3% liquidated damages clause caps the seller's recovery at $21,000 regardless of how much the buyer actually deposited into escrow — a fact pattern that shows up directly on exam questions that hand you a sale price and a stated dollar figure and ask whether the clause is enforceable.

The RPA does not hold funds itself — it names the escrow holder who does, and the deposit check or wire goes to that neutral third party, never to the listing broker or the buyer's agent. The initial deposit is commonly 1%–3% of the purchase price in most California markets, though competitive and luxury transactions frequently see 3%–10% to signal a serious offer. Under the standard RPA timeline, that deposit is typically due within 3 business days after acceptance. Close of escrow in the RPA defaults to 30 days after acceptance for a financed purchase, though all-cash deals frequently close in 14–21 days once title work and any HOA document review are complete. If a party fails to close, or fails to remove a contingency, by the applicable date and no written extension has been signed, the RPA's time-is-of-the-essence and cure-notice provisions govern what happens next: the non-defaulting party typically must serve a Notice to Buyer to Perform (or Notice to Seller to Perform), giving the other side a minimum of 2 days to cure before the contract can be cancelled. Only after a valid cancellation does the liquidated damages analysis above actually come into play — a sequence exam questions frequently test by presenting a missed deadline and asking what the non-defaulting party must do before money can be released or kept. Agents should never advise a client on the legal effect of a Notice to Perform or a liquidated damages dispute — that crosses into the unauthorized practice of law — but understanding the mechanics is both directly testable and directly relevant to keeping a real transaction on schedule.

The RPA itself is short by design; most of a California transaction's legal weight sits in the statutory disclosures and optional addenda attached to it. The seller's Transfer Disclosure Statement and Natural Hazard Disclosure report are delivered as separate statutory documents outside the RPA's own contingency structure, which is why a buyer who receives them after signing gets an additional statutory right to cancel — 3 days if delivered by mail, 5 days if delivered in person or electronically — under Civil Code §1102.3, independent of whatever inspection or loan contingency deadlines are still running. A buyer working with an agent also needs a signed buyer-broker representation agreement in place before that agent can earn a commission on the transaction — a separate Civil Code requirement under Assembly Bill 2992, unrelated to the RPA's own contingency deadlines and covered in full in our buyer-broker agreement guide. Common addenda layered onto the base RPA include the Contingency for Sale of Buyer's Property Addendum, the Septic/Well/Property Monitoring Allocation of Cost Addendum, and the Wood Destroying Pest Inspection Allocation of Cost Addendum — each one amends or adds to the base 17/17/21-day framework rather than replacing it, and each requires its own signatures to take effect. A lead-based paint disclosure booklet and acknowledgment form is also required on any property built before 1978, under the federal Residential Lead-Based Paint Hazard Reduction Act of 1992 — a separate compliance obligation that travels with the RPA on older housing stock but is not itself part of the California-specific disclosure package.

The salesperson exam rarely asks "what is the RPA" as a standalone question. It tests the mechanics underneath it: which contingency period applies to which risk, what percentage caps liquidated damages, who physically holds the deposit, and what has to happen procedurally after a Notice to Perform expires. Expect math-adjacent word problems that hand you a purchase price and a stated liquidated damages dollar amount and ask you to determine whether the clause is valid under the 3% rule, or scenario questions that describe a missed 17-day inspection deadline and ask what options remain for the buyer. Memorizing the default numbers solves most of these questions outright, because the exam is testing recall of the statute and the form's default structure rather than a scenario requiring outside legal judgment: 17 days for inspection, 17 days for appraisal, 21 days for the loan contingency, a 3% liquidated damages cap under Civil Code §1675, and the 10-point bold-type execution requirement under Civil Code §1677. Candidates who can recite those five numbers cold rarely miss an RPA question. Day One generates fresh, full-length practice exams that mirror the exact weighting the real DRE exam gives to contract law, so questions on RPA contingencies, deposit handling, and liquidated damages limits show up repeatedly during study instead of appearing cold on test day.