Arizona Real Estate Contract: Different Types and Key Terms to Include

What is an Arizona Real Estate Contract?

An Arizona real estate contract, commonly known as a real estate purchase and sale agreement, is a legally binding contract entered into by a buyer and seller for the sale of property.

A typical real estate contract includes the basic terms of the sale which often include a description of the property, sale price, closing date, required disclosures, and contingencies. Contingencies are the actions that both parties must take to facilitate the deal and can include home inspections and securing financing for the purchase.

Real estate contracts are a type of contract covered by the Arizona statute of frauds so this contract must be in writing to be legally enforceable.

Common Arizona Real Estate Contracts

There are several types of real estate contracts that are used in Arizona including:

• Purchase agreement. The most common type of real estate contract that is used for the transfer of property between a buyer and a seller.
• Real estate assignment contract. Used when purchasing “distressed properties” as a wholesale investment strategy. This contract allows the buyer to assign the contract to a second buyer.
• Lease agreement. Use when a landlord wants to rent their property to a tenant for use.

4 Essential Elements of an Arizona Real Estate Contract

The four essential elements of an Arizona real estate contract to make the contract valid and enforceable under Arizona property laws include:

1. The contract must be in writing and include a legal description of the property
2. There needs to be mutual assent and legal consideration
3. The parties must both be legally competent
4. The contract cannot violate any laws

What Must Be Included in an Arizona Real Estate Contract?

Under Arizona law, several different required disclosures must be included in all real estate contracts. Disclosures contain important information about the conditions of a property that could affect the property value.

Required disclosures include:

1. Property disclosure statement. A form used by a seller to disclose what they know about the property’s condition and issues.
2. Buyer inquiry. Seller must disclose all information relating to any inquiries made by the buyer.
3. Comprehensive loss underwriting exchange (CLUE). Sellers must provide buyers with a report showing the past five years of insurance claims filed on the property.
4. Condo disclosure information. Required only when the property is managed by an HOA or condominium community.
5. Notice of soil remediation. Written notice of any soil remediation.
6. Disclosure affidavit for land in unincorporated areas. A written affidavit provided by the buyer for property on unincorporated land.
7. Military airport disclosure. Required when the property is located within the vicinity of a military airport.
8. Lead-based paint disclosure. Only applicable for houses built before 1978
9. Swimming pool disclosure. If the property has a swimming pool, the seller needs to provide a department of health services notice to the buyer.

Sellers do not have to disclose if the property was the location of a death, homicide, or any other felony crimes or if the property is in the vicinity of a sex offender.

Can a Buyer Back Out of a Real Estate Contract in Arizona?

Yes. A buyer can back out of a real estate contract in Arizona but there will be consequences. One way for a buyer to back out of a real estate deal is if the seller fails to meet a contingency or breaches the contract in some way like failing to provide a required disclosure.

If a buyer doesn’t have any contingencies available, they can breach the real estate contract to the end the deal. Breaching the contract however could have legal ramifications and the buyer will lose their deposit and any money spent on inspections and surveys throughout the process.