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Copyright© 1999-2008, Holly Grigaitis-Svercl. All rights reserved. Reproduction of any content requires written permission from the owner. |
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830 S Main Street Suite 1-A Cottonwood AZ, 86326 |
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Rimrock, Arizona |
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If you are selling your Arizona real estate through a licensed Realtor ®, they are required to use the Arizona Association of Realtors ® (AAR) pre-printed contract forms. The following applies to the Arizona Association of Realtors ® residential resale purchase contract, the most commonly used contract in Arizona real estate sales. The language of the contract is in favor of the buyer and gives the buyer every opportunity to correct potential breaches along with a multitude of potential escape clauses. I use the term “potential breaches” because they are just that. The recently revised Arizona Association of Realtors ® Residential Real Estate purchase contract removes all automatic breaches, and puts the seller in a poor position to claim any earnest monies if the contract is not followed rigorously. In other words, in most situations, a buyer can cancel the contract and expect to get there earnest money back if they follow a few simple rules. This is one of the reasons it is imperative for you to have an agent well versed in the subtle nuances of this document. To follow are some highlights of the rights and responsibilities imposed on sellers of Arizona Real Estate via the AZ real estate purchase contract. The following information is not intended to be legal advice. If you need legal advice on an AZ real estate purchase or sale, please contact an Attorney familiar with Arizona Laws and Statutes.
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GOOD FAITH- You must act in an honest and forthright manner with the buyer at all times and remember that a contract is basically a set of signed promises. Understand what promises you make in your real estate purchase contract and be prepared to deliver what you promise. You cannot “change your mind” about selling once you have accepted an offer. TIME IS OF THE ESSENCE- As the seller, you are at the top of an information pyramid and there are literally 75-100 people who need that information from you to do their job and push the transaction through in a timely manner. The 3 days you sit on paperwork, may well be the reason your transaction closes 5 days late. In addition, buyers are allowed 5 days to review all required documents. Sending items such as the contract and disclosures via regular mail is not sufficient. Find a store nearby that offers fax services, or consider purchasing one for your home for the transaction. GET IT IN WRITING- The contract and its terms and conditions CANNOT be changed by verbal discussions. It MUST be in writing. EARNEST MONEY- Be aware that earnest money is returned to the buyer in most cancelled transactions. CLOSE OF ESCROW- Consider this date as “flexible.” If the buyer does not close upon your closing date, you must give them 3 full additional days to close the escrow, before you can cancel your transaction or make a claim to any earnest deposits. FIXTURES AND PERSONAL PROPERTY- In the simplest manner of speaking, if it is nailed down, screwed-in, planted in the ground, or listed in the purchase contract, the buyer is entitled to it at close of escrow. Furthermore, if it was working when the contract was written, it must also be working at close of escrow...which means you, as the seller, are required to make or pay for repairs. BUYER PREQUALIFICATIONS– If your buyer’s prequalification is not current (in the last 30 days), or it does not come from a VERY reputable lender, it does not necessarily mean the buyer has the financial ability to buy your property. The current lending market is very volatile, and creative programs are quickly disappearing. APPRAISAL CONTINGENCY- Be aware that your property will be compared to other homes or parcels that are within 1 mile of your home, AND have sold in the last 6 months. If your property fails to appraise for the contract price, there is a very good chance your current contract will not close unless you are prepared to sell for the appraised value or your buyer is willing and able to make up the difference via additional cash. LOAN DOCUMENTS- A buyers’ loan documents must be signed no later than 3 days prior to close of escrow, according to the contract. However, this seldom happens and the fact is the buyer has no control over the lender. A cure period notice must be issued before any claim to earnest money can be made. CHANGES- The buyer must notify the seller immediately of any and all changes in loan terms and furthermore, they may not change the terms if it affects the sellers side of the transaction or delays COE unless they have your permission to do so. TITLE REPORT- Once received, a buyer has 5 days to review and may cancel if items are not to their satisfaction. SPDS/INSURANCE CLAIMS HISTORY/AFFIDAVIT OF DISCLOSURE/CHANGES DURING ESCROW/LEAD BASED PAINT- Regardless of when your buyer receives these documents, they will generally have five days after their receipt to review and approve of their content or, cancel the contract and receive a return of all earnest monies. SELLER WARRANTIES- Unless your sale is “as is” (and this is in writing, via a written clause or attached addendum), you warrant via the boilerplate language that all heating, cooling, mechanical, plumbing, electrical and built-in appliances in working condition and that you will remove all personal property items and debris from the property. INSPECTIONS- Buyers will be given a specific period of time to perform any and all inspections regarding the subject property and confirm all information contained in the listing. You are required to have all utilities on and available so the buyer may inspect all systems in the home. FINAL WALKTHROUGH- A buyer has a right to review the property once more, shortly before close, to make sure the property is in substantially the same condition as when they had wrote your offer. CURE PERIOD- If the buyer misses a contractually obligated date or other requirement, the seller should deliver a cure period notice. If the buyer does not correct the potential breach named in this cure period within the standard 3 day time period, the buyer is then and only then in breach of the contract which may entitle you to their earnest money. ALTERNATIVE DISPUTE RESOLUTION- If there is a dispute between buyer and seller, at any time, you must go to mediation prior to going to court. CANCELLATION- If you decide to cancel your transaction, you must do so by providing notice to the title company in writing. A phone call is not sufficient. |
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This page was last updated on 12/26/2007 |
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Contract Information for Sellers |