Arizona Residential Purchase Contract
The Arizona Residential Real Estate Purchase Contract is 9 pages and has 9 sections. It's important for both Buyers and Sellers to read this document thoroughly, as proper understanding of the rights of each party and the procedures will enable a much smoother transaction and prevent regrets and disappointments.
- Property
- Financing
- Title and Escrow
- Disclosures
- Warranties
- Due Diligence
- Additional Terms
- Seller Acceptance
8. Due Diligence
Per the Arizona Purchase Contract, the buyer has 10 days to complete inspections or investigations on the property and/or the surrounding area, however the number of days can be increased or decreased in the contract. There is often much confusion about when the inspection day ends but if one realizes that Day 1 is the first day after acceptance of the contract, then it is easy to track all the requirements of the contract.
The Buyer Advisory, a document provide by the Arizona Department of Real Estate can assist in the Buyer’s due diligence inspections and investigations. Issues that the buyer may wish to verify are:
- Square Footage
- Presence of Termites
- Physical Inspection of the house
- Physical Inspection of the swimming pool
- Environmental inspection of the house
- Verify zoning and safety codes
- Whether the property is in a flood zone and will require flood insurance
- The availability and cost of Homeowners insurance
- The type of wastewater treatment system on the property – public sewer , septic system or alternative system
- Compliance with swimming pool barrier regulations
It is important to note that by law, the seller is not required to disclose the presence of sex offenders in the surrounding area or the occurrence of a disease, natural death, suicide, homicide or other crime on or in the vicinity. If these items are material to the Buyer, they must be investigated during the inspection period.
At the conclusion of the inspection period, is another negotiation between the Buyer and the Seller. If the Buyer disapproves of any items, the Buyer may, prior to the end of the inspection period, deliver to the Seller, a signed written notice (Buyer Inspection Notice and Seller Response or BINSR) which gives the Buyer the option of cancelling the contract or providing the Seller an opportunity to correct the disapproved items. If the Buyer doesn’t cancel the contract, the Seller has five days to answer the Buyer in writing. The Seller may 1) agree to correct the disapproved items, 2) agree to correct some of the disapproved items, or 3) refuse to make any corrections. If the Seller agrees to correct the disapproved items, then the transaction continues to progress to closing. If the Seller refuses to make any corrections or only make some of the corrections, then the Buyer again has several options. The Buyer may either cancel the contract or accept the Seller’s response and proceed with the transaction.