On February 1, 2017, the Arizona Association of Realtors released a significant revision of the Arizona Residential Purchase Contract, which has not been modified since 2011. For those of my blog readers who happened to see this post, you will want to stay tuned here. Since reading a 10 page real estate document is not likely on your bucket list, I have made sense of the important changes for you. It is critical that we, as your real estate consultants, have the complete knowledge of these changes and the expertise to help you navigate this sometimes overwhelming process.
Let’s make this simple. There are many changes to the document – some new verbiage, some omissions and some subtle adjustments which I will not focus on here – but only a few that are of paramount importance to you, our buyers and sellers. So here we go:
- Earnest money now must be deposited “upon acceptance” of the offer. This timetable was never spelled out in the old contract, so the money arrived when it arrived.
- For all cash purchases, proof of funds must now be submitted with the offer. This was previously addressed in the Additional Clause Addendum requiring the buyer to provide this within 5 days of acceptance. A letter from your financial institution or a statement showing adequate balances will suffice.
- An extremely gray area for all of us has been personal property & fixtures. A few updates have been made here to include the inclusion of all shrubbery, trees and unpotted plants to convey with the property. Potted plants, even if they are on a drip system, are considered personal property and can be removed by the seller unless requested in the contract.
- The Seller’s Property Disclosure Statement (SPDS) must now be delivered from the seller to the buyer within three days of contract acceptance instead of five. Our inspection period – also called our due diligence period – is 10 days from execution of the contract and the committee felt it would be beneficial for the SPDS to be provided earlier in the transaction.
- NO MORE WARRANTED ITEMS! This is a magnanimous change for all of us. The old contract stated that the seller has certain obligations when it came to delivering the property. There was a list – somewhat vague – of home components that the seller had to deliver in “working order”. Plumbing, electrical, HVAC, pool, etc… were all systems that needed to be operational. Due to so many interpretations of what is warranted vs. non-warranted (see my blog post) it was determined that nothing is warranted going forward. In essence, there is no obligation on the part of the seller to make any repairs, rendering this as an “as is” contract. There will be no more “As Is” Addendum due to this change. Of course the buyer may request repairs and the seller may agree to make them, but there is no obligation. This is perhaps the biggest change in the contract.
We have to ensure that our documentation protects both buyers and sellers. This will continue to be an evolving purchase contract. Our experiences in transactions have helped to provide these valuable updates in a quickly changing real estate world. For further detail and to see the actual contract, please see below.
I hope you found this helpful!