Understanding the Arizona Residential Resale Purchase Contract

The Arizona Residential Resale Real Estate Purchase Contract, provided by the Arizona Association of REALTORS® (AAR), is a legally binding document that outlines the terms of a home sale. It protects both buyers and sellers, ensuring transparency and setting clear expectations.

Here’s what you need to know, section by section:

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• Property Address & Legal Description: Confirms the exact property being purchased. Double-check the address, parcel number, and legal description for accuracy.
• Fixtures & Personal Property: Specifies items included in the sale (e.g., appliances, window treatments, pool equipment). Review carefully to avoid misunderstandings.

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• Purchase Price: The agreed-upon price for the home.
• Earnest Money Deposit: A good faith deposit showing your serious intent to buy. This is typically held in escrow and credited toward your purchase at closing.
• Down Payment & Loan Amount: Details the amount you’ll pay upfront and how much you’re financing.

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• Loan Terms: Specifies the type of loan (conventional, FHA, VA, etc.) and the timeframe for securing financing.
• Loan Status Update (LSU): A document your lender provides to update the seller on your loan progress.
• Unfulfilled Loan Contingency: If you can’t get financing within the specified period, you may cancel the contract without penalty (if handled correctly).

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• Title Company & Escrow Agent: The neutral third party handling the transaction, holding funds, and ensuring all conditions are met.
• Title Commitment: A preliminary report outlining any liens, encumbrances, or restrictions on the property. Review carefully to avoid surprises.

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• Seller Property Disclosure Statement (SPDS): A document where the seller discloses known property issues. Review thoroughly to understand the home’s history and condition.
• Insurance Claims History: Sellers must provide a five-year insurance claims history (or the length of ownership).
• Lead-Based Paint Disclosure: Required for homes built before 1978.

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• Inspection Period: Typically 10 days to conduct inspections and negotiate repairs.
• Buyer’s Inspection Notice & Seller’s Response (BINSR): A form used to request repairs or accept the property as-is.
• Cancellation Rights: You can cancel the contract if major issues arise, provided it’s within the inspection period.

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• As-Is Sale: Most Arizona homes are sold as-is, but the buyer can still request repairs during the inspection period.
• Home Warranty: Specifies if a home warranty plan is included, who pays for it, and the coverage amount.

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• Close of Escrow (COE) Date: The official date the property changes ownership.
• Prorations & Adjustments: Property taxes, HOA fees, and utilities are prorated between buyer and seller.
• Final Walkthrough: A pre-closing inspection to verify the home’s condition and confirm any agreed-upon repairs were completed.

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• Breach of Contract: Explains the consequences if either party fails to meet their obligations.
• Dispute Resolution: Outlines how disputes will be handled, often through mediation or arbitration.

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• Contingencies: Additional conditions that must be met for the sale to proceed (e.g., sale of the buyer’s current home).
• Addenda & Counteroffers: Any supplemental documents or negotiated changes to the original contract.

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• Earnest Money Deposit
• Inspection Period
• Loan Approval
• Closing Date

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• Work Closely with Your Realtor: They’ll help you navigate each contract section and keep you on track with deadlines.
• Communicate with Your Lender: Ensure your loan application progresses smoothly to avoid delays.
• Don’t Skip the Inspection: Even if the home looks perfect, an inspection can uncover hidden issues.
• Review the Title Report: Make sure there are no unresolved liens or ownership disputes.
• Understand Your Out-of-Pocket Costs: Factor in closing costs, prorated taxes, and potential repair expenses.

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Understanding the Arizona Residential Resale Purchase Contract empowers you to make informed decisions and confidently move through the home buying process. With the right guidance, buying a home can be an exciting and rewarding journey!