Welcome back to our multipart series on by real estate it Arizona. If you have been reading the last days blog posts, you will have learned about the agency disclosure agreement and the loan status report prequalifying buyers for a mortgage in order to buy a home in Arizona. If you are new to this series, it is specifically dedicated to first-time homebuyers in Arizona or real estate buyers in Arizona who have not purchased homes in our state.
Today we’re going to speak about the Arizona Association of realtors purchase contract. This is a nine page agreement presented by the buyer to the seller. In Arizona we do not use attorneys; however if you are more comfortable with attorney you are always welcome to do so when I say we don’t use attorneys, I mean that the intermediaries between buyers and sellers are agents and title and escrow companies who handle all funds and process the contracts are written agreement only I need to stress that, written agreements only because Arizona real estate purchase contracts must be in writing.
So you finally found a home to buy it Arizona. What do you do next? Hopefully, if you are new home buyer you are working with a knowledgeable, experienced and trustworthy real estate agent who has your best interest in mind. If so, you will prepare the terms in a nine page real estate contract. The contract outlines details as basic as the spelling of the buyers name and sellers name property address legal description of the property and assessor’s parcel number specific to the home. However, it also spells out closing of escrow date or possession date, purchase price earnest money amount financing terms and other important details. Today we’re going to address page 1 of the contract as there is some of the most significant language in the real estate purchase contract requiring careful examination.
section 1 property. Line 1 request the buyer or buyers names. Line 2 requests the seller or seller’s names. How critical is this? You may ask. Although I’m not an attorney, all contracts by federal law are assignable. What that means is, as a buyer you may change the name to whatever you like. However there are some qualifications for example, your lender may require the name in the contract to exactly match the name of the borrower. So, be aware of this situation before you make an offer. If a mistake or correction is necessary don’t fear, your agent can always draft an addendum amending the contract. However addendum does require a seller signature so it is critical that you do this correctly from the outset. one more thing; the contract does not indicate how you take title. Your title officer will send you an appropriate form to indicate if it is a single buyer joint tenants a trust and request specific full legal misspelling if that’s what you choose.
Now comes the exciting part: the purchase price you are offering. Line 8 asks you to fill in the offer amount line 9 asks the earnest money deposit line 9 and 10 ask additional financing terms. Let’s talk about the earnest money for a second. There is no minimum or limit to maximum earnest money requirements Arizona. However larger amounts of earnest money typically represent to the seller your sincere interest in your financial wherewithal as a commitment and as capability to close escrow. Standards if there are any, are typically 1% of the purchase offer amount. Later, we will speak about earnest money it’s refund ability based on certain contingencies.
close of escrow; lines 13 through 16 indicate your intention to close escrow or take possession and are identified specifically by date in Line 16. make sure you leave enough time to close escrow. If you do not close in time, an extension will need to be signed by the seller. In this market sellers are typically agreeable; however there is no guarantee so give yourself plenty of time and get a conservative estimated time of loan docs from your lender if you are using a mortgage. Remember, you can always close early. Rarely do sellers become disgruntled if you want to give them your money earlier than expected.
Finally, the bottom of page 1 indicates fixtures and personal property included in the sale. I won’t read the whole list though included are items like freestanding range ovens, fans, light fixtures, pool equipment, garage door openers, solar systems,attached speakers, fireplace equipment, satellite or TV antennas and even in your mailbox is specified. In regards to fixtures and personal properties, if there is any question of about what belongs as a part of the sale please indicate in writing so that there is no confusion after you close escrow.
Again, this is a comprehensive, though Not complete study of page one of the purchase contract. I strongly recommend you call me or your real estate agent to go over this with you in further detail and always read the contract your self.
Thank you very much for reading I appreciate your time your comments and any questions you may have about page one of the purchase contract or any other details that you have questions to that regard.
Have a great week and if you’re visiting Arizona and want to look at some of the best homes available in the market including short sales and bank owned properties please call me anytime.
Daniel J Wexler, GRI (480) 200 – 9097
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