Arizona Real Estate Purchase Contract, 2022

Hello, this is Sheri Spierk with Corcoran Platinum Living and today we're going to discuss our Arizona residential purchase contract. This is the updated purchase contract from February of 2020. The first page is not part of the contract, but it gives you a list of the things that you need to understand. One being that you are entering into a legal binding contract and that you should read the entire contract before you sign it. Parts of the contract that are important, the property disclosure, any inspections, homeowners insurance, title commitment and CC&Rs, and then of course you are entitled to your walkthrough prior to closing. As we get into the contract, page one shows the buyer, which is where your name will go, and we want to put that as a legal name as you want on the deed to the property. The seller's information goes on line two. Then we will enter the property address, city, county, assessor's number over here, legal description, and then we get into the amount of the contract. In this situation, the buyer is putting in a purchase price of $300,000. They are applying one percent earnest money, which is a number I feel is is a good number in our market. They are doing a 20% down loan, so they will bring $57,000 additional cash at close of escrow and they will have a new conventional loan in the amount of $240,000. The earnest money here can be made by personal check and it goes to the escrow company. Normally the only time it does not go to the escrow company is if you are doing a purchase with a builder. Close of escrow for this will be January 29th. We talk about possession in this situation in Arizona. Possession is always the date of closing and that's the date that the property transferred is made at the county recorder's office. This is not necessarily when you sign your paperwork. Any additional addendums for this property, we mark those box or no otherwise. In this situation, we have an HOA, so we've marked that box. The following items are included with the sale unless otherwise stated. So the one thing we want to make sure of is if there's a ring doorbell on the property, it should stay unless the seller says otherwise. And the other one that's always interesting is wall-mounted TVs. The bracket on the wall and the hardware should stay unless otherwise specified. On this contract, the seller is offering and the buyer has noted that the refrigerator washer and dryer will convey with the sale. These are considered personal property items, so we note those separately on the contract. Unless this is a cash deal, we do need a pre-qualification from a lender to supply with our purchase contract when we submit it to the listing agent. Then it goes through the different financing situations. The lender will give us loan status updates throughout the contract, which is important to the seller, and it's important to us as the buyer to know where we are and that we're constantly moving forward without any hiccups. In this situation, our financing is conventional, but if it's FHA, VA, USA, any other type, we would mark those boxes accordingly. All costs obtained for the loan from the buyer will be paid by the buyer unless we request concessions in Section 2J. In this situation, the buyer does not need closing costs, so we've marked that as zero. Any changes with the buyer's loan, we need to notify the seller so that we keep them up to date on what's going on. With a loan, you are entitled to, or you will need to get an appraisal, and we have that appraisal contingency. If for some reason the home appraises for less than the purchase price, we have five days to give notice to the seller that we're canceling, or in most times, you can work with the seller and negotiate. The seller can come down, you can come in the middle and negotiate the difference, which that cash over the appraisal price will have to be additional cash paid by the buyer. Appraisal costs are normally paid by the buyer. Title and escrow information goes in this section. Title will submit to you a title report that gives you all of the information about the property. Any liens will need to be removed from title prior to closing. All liens have to be removed before they transfer property from the seller to the buyer. All real estate property taxes are prorated at close of escrow. If there's a dispute within the buyer and seller regarding earnest money, we have different contingencies. We go through the contract, and at that point, you can receive, your earnest money will be released back to you. If it's appraisal, inspections, title, HOA, those are some of the reasons that if you do not like what you see, we can cancel under those circumstances, and you will receive your earnest money back. Any and all assessment liens on the property will be prorated as of close of escrow. The seller will provide you a property disclosure statement, which we call a spuds. They need to give us that within three days, and then we will review those during our inspection period or within five days of receipt to make sure if there's anything that you're concerned on that the seller has disclosed to you. Insurance claims history, the seller should also provide you a letter with five years of claims history showing if they have had claims or if there's never been a claim. If the seller is from a foreign country, that seller is, the seller could possibly owe taxes, and that would be withheld at closing. If the home is built prior to 1978, there will be an additional addendum for lead paint paste disclosure that the seller will provide us, and then as we go through any changes of escrow, the seller shall notify the buyer. If there's a change with the property, if something's happened, they need to notify us and update their seller property disclosures. The home needs to be in the same condition on the day of closing as it was on the day of contract. Our inspection period is 10 days unless otherwise noted, and at that point is when you're going to do all of your inspections that are important to you, and we will submit to the seller within that 10 days any repairs that you want to request. At this point, you will also want to get a quote for your homeowner's insurance so that you know what that amount is and that that's something that, and that the home is insurable through your insurance company. Line 6SF talks about sewer septic systems, and we will mark the box accordingly in the situation it's a sewer system. Every city and county in Arizona has different laws and rules regarding swimming pool barriers, and so we will want to investigate that if there's a pool, and it's also good to investigate if you want to install a pool after closing. This talks about the inspection period notice that we will give the seller their notice within 10 days. The seller has five days to respond as to if they will repair items, repair some items, or not repair anything, and the buyer then has three days. The buyer then has five days to respond as if they were going to move forward or they want to cancel, and the seller needs to have all repairs done three days prior to closing. You have the option to request a home warranty that you order and that you either pay for or you can request the seller to pay for in the situation the buyer has declined a home warranty. The seller needs to make the property available for all of your inspections and walk-through with notice. The remedies are different situations that could come up, a cure period if buyer or seller are in breach, then we go through different alternative disputes. Line, or Section 8 talks about, I like to add that the earnest money to be deposited at within two business days of seller's acceptance, and I always also add close of escrow to be on or before. In this situation, it's January 29th. With mutual agreement of buyers and sellers, if we're ready to close early, the seller is also available to close early, then with both parties in agreement, we can close early. Section 8 talks about the risk of loss, the contracts governed by Arizona law, all time is based on Arizona time, all of our days are in consecutive, we don't go on a five-day work week, our contract's based on every day consecutively. Gives you the options on if you can cancel by delivering notice as to why you're canceling, and then our terms of acceptance on this are January 7th at 5 p.m., which gives you the option, the seller doesn't have to accept by then, but at 5 p.m. on January 7th, if the seller has not accepted, you have the option to then go put your offer in on another home, and if the seller comes back and accepts after that time, you do not have to accept that, you can move on. Line 443 is where your buyer's agent, in this situation that's me, goes. Your information is going to go in lines 454 through 456, the seller's agent goes in line 9A, seller's information goes in line C, and that is our contract. So if you have any questions about this, you can give me a call at 480-316-0016, or you can find me at sherryspierick.com.