Did you know there are five contingencies outlined in the contract to allow a buyer to cancel without penalty or financial loss? Arizona is a buyer-friendly state. The Arizona purchase contract is designed to protect home buyers by giving escapee. Learn these five contingencies and you will find yourself more confident when making an offer. Below I’ve listed the contract language and explain how the work.
The Buyer contingency applies when you currently own a home, but must sell an existing home in order to purchase the new home. Within this contingency addendum, there are two levels. The first level is: CONTINGENT UPON ACCEPTED OFFER FOR BUYER’S PROPERTY. This is typically used, when either the home is not listed on the MLS or is listed but has not received a contract. This the weakest offer a seller can receive.
The second level: CONTINGENT UPON THE CLOSING OF BUYER’S PROPERTY . This is typically used when the home is already listed and under contract. This assures the seller that they have already found a buyer for their home and is set to close on a given date. In both of these instances, if their existing home falls out of contract for any reason, this would cancel the new contract. Giving the buyers an escape or alleviating them from the burden of carrying two mortgages or coming up with downpayment money that may only be had through the sale of their current home.
Financing & Loan Contingency
Financing & Appraisal Contingency
This typically comes into play when a buyer offers more for a home than it’s worth. The loan contingency is in place to protect the lender from consumers making outrageous emotional offers or to keep bidding wars from outlandishly increasing neighborhood values. If the home does not appraise to value, typically there are three resolutions. 1) the buyer comes up with the out of pocket difference between the appraised value and the offered value, 2) the seller lowers the agreed upon price to the appraised value (buyers benefit), 3) the seller can carryback the difference on a separate note 4) The buyer can cancel the contract with no penalty.
Due Dilligence & Dissaproval
The standard due diligence period is 10 days. In this time the buyer has every right to do their research, hire specialists for the roof, pool, pest, mold, heating/cooling, general structural and safety, square footage, neighborhood, school district, or anything that is important to you. Should you find anything that alarms you, or is a “deal breaker” you can cancel the contract OR give the seller an opportunity to correct the issue. For example, if the pool needs resurfacing, you can request that repair and the seller can choose to do the repair. However, if you ask for the repair and the seller chooses not to resurface the pool, then you can cancel.
Another drive back by the neighborhood and find some activities that are concerning, you can cancel and there is nothing the
Title Commitment & HOA
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