With the new year approaching and potential buyers considering a home purchase in 2019, it may be an appropriate time to review the Residential Resale Real Estate Purchase Contract. The contract document is used by members of the Arizona Association of Realtors and is the only resale contract approved by the association.
The contract has ten pages which are divided into nine sections each with their own subsections which detail most scenarios that may arise during a real estate transaction. A short description of the sections are described below.
1. Property: This section describes who the buyers are, the legal description of the property and the buyer's offer, as well as the date the buyer would like to close escrow.
2. Financing: Section 2 discusses the buyer's financing and whether they are getting a conventional loan, FHA loan, other type of loan or if this will be a cash transaction.
3. Title and Escrow: Section 3 discusses the buyer’s choice of title company and instructions to the title company to close escrow.
4. Disclosure: This section discusses the seller’s obligation to disclose all know material facts about the property including previous insurance claims and the possibility of the presence of lead-based paint.
5. Warranties: Section 5 discusses warranties of both the buyer and seller.
6. Due Diligence: Section 6 describes the need for the buyer to perform their due diligence. It provides a time frame for the buyer to conduct inspections and research the suitability of the home and the area.
7. Remedies: Section 7 discusses remedies if there is a contract dispute.
8. Additional Terms and Conditions: Section 8 addresses additional terms and conditions that the buyer may ask from the seller. It also provides for the buyer’s signatures as well as their real estate agents information.
9. Seller Acceptance: Section 9 describes the seller’s agent and provides for the seller's signature indicating acceptance or disapproval of the buyers offer. The seller’s option to counter the buyer’s offer is also available.
The contract’s cover page is called a “Buyers Attachment” and potential buyers should review it closely. If you are soon to be in the market to buy a home, ask your agent for a sample copy of the purchase contract and make sure that it shows “Updated February 2017.” Older copies of the contract are no longer acceptable.