The Arizona Purchase Contract – Flashcards Questions
With Complete Solutions
A New Transaction Phase
Once the last party signs and accepts the entire purchase contract
and delivery has been made, the _____ period begins. Correct
Answers Buyer's inspection
The buyer's inspection period lasts 10 days once the contract is
accepted, unless otherwise specified in the contract.
A Note About Offer Termination
It's important to let clients know that by making a counter-offer,
the initial offer is terminated and replaced by the new offer.
When this happens, typical roles are reversed and the buyer
becomes the person accepting or rejecting the offer.
Either party may also withdraw an offer at any time prior to its
acceptance. Additionally, the party to whom the offer was made
may reject it any time prior to acceptance (unless the offer
expires after a specified time). Correct Answers
Addenda for Backup Offers
What addendum is used in a situation where a buyer submits an
offer on a property that is already under contract (as a backup
offer)? Correct Answers Additional clause addendum
The additional clause addendum provides standardized language
for special situations (such as backup offers and missing buyer
signatures).
Addenda Incorporated
,All of the following addenda may be included in Subsection 1f
of the purchase contract EXCEPT which one? Correct Answers
Buyer pre-qualification
Subsection 1f allows the parties to state which addenda have
been added to the purchase contract—including additional
clause, buyer contingency, domestic water well, HOA, lead-
based paint disclosure, loan assumption, on-site wastewater
treatment facility, seller financing, short sale, and solar
lease/solar loan assumption.
Addenda Incorporated (1f)
Remember those disclosure forms we talked about in the
previous section? Items like HOA disclosures, lead-based paint
disclosures, and other addenda should be listed or marked in this
section if they are being provided for the transaction. Correct
Answers
Additional clause addendum Correct Answers Provides
standardized verbiage for situations where a backup contract is
submitted or a buyer spouse or co-buyer signature is missing
from the purchase contract
Affidavit of Disclosure (4e)
A transfer of five or fewer parcels of property in an
unincorporated area of the county requires the filing of an
affidavit of disclosure. The seller must provide the buyer with
the affidavit within five days of contract acceptance, and the
buyer has the inspection period or five days after receipt of the
affidavit (whichever is later) to disapprove any items.
, The affidavit must be given to the buyer at least seven days
prior to close of escrow in order for the buyer to have time to
disapprove of any items. The affidavit contains latent defects,
such as existing flood plains, access, etc., that could be material
to the sale. The seller must record the affidavit with the deed at
close of escrow. Correct Answers
Alternative Dispute Resolution
Decide whether each of the following examples would be
excluded from the alternative dispute resolution (ADR)
requirements.
1) An issue sent to small claims court
2) Enforcement of a mechanic's lien
3) Filing a notice of lis pendens Correct Answers 1) Excluded
from ADR requirements
2) Excluded from ADR requirements
3) Not excluded from ADR requirements
ADR requirements state that parties must go through mediation
first, then arbitration.
Alternative Dispute Resolution (ADR) (7c)
Under the terms of the purchase contract, first the parties
mediate, and then they arbitrate. It is important that the parties
understand that by accepting this clause as written they're
waiving their rights to sue to settle a dispute. For many people,
this is fine, but there are others who would not want to give up
their litigation rights.
Exclusions from ADR (7d)
* An issue sent to small claims court (less than $3,500)
* A judicial or non-judicial foreclosure, sheriff's sale, etc.
, * An unlawful entry or detainer action
* The filing or enforcement of a mechanic's lien
* An issue having to do with probate court
Even filing a notice of lis pendens (notice of pending legal
action) does not relieve the parties of their contracted
responsibilities to use alternative dispute resolution. Correct
Answers
Appraisal (2l and 2m)
Last, but not least, the purchase contract contains an appraisal
contingency. An appraisal contingency gives the buyer the
option to terminate in the event the property doesn't appraise at
the agreed-upon sale price. An appraisal contingency protects
the buyer from being contractually obligated to purchase a
property that doesn't appraise at or more than the purchase price,
which could result in the lender not funding the loan.
Buyers have five days after receiving notice that the appraised
value of the property is less than the purchase price to cancel the
purchase contract and receive their earnest money back. If the
buyer waits longer than five days, the appraisal contingency is
waived.
The buyer and seller decide who will pay for an initial
appraisal. If the buyer's lender requires an updated appraisal
before closing, then the buyer must pay for it. Inspections are
also paid for by the bu Correct Answers
Appraisal Cost(s)
The Halls have agreed to pay for getting an appraisal on Jones's
property. Where should this information go in the purchase
contract? Correct Answers Subsection 2m
With Complete Solutions
A New Transaction Phase
Once the last party signs and accepts the entire purchase contract
and delivery has been made, the _____ period begins. Correct
Answers Buyer's inspection
The buyer's inspection period lasts 10 days once the contract is
accepted, unless otherwise specified in the contract.
A Note About Offer Termination
It's important to let clients know that by making a counter-offer,
the initial offer is terminated and replaced by the new offer.
When this happens, typical roles are reversed and the buyer
becomes the person accepting or rejecting the offer.
Either party may also withdraw an offer at any time prior to its
acceptance. Additionally, the party to whom the offer was made
may reject it any time prior to acceptance (unless the offer
expires after a specified time). Correct Answers
Addenda for Backup Offers
What addendum is used in a situation where a buyer submits an
offer on a property that is already under contract (as a backup
offer)? Correct Answers Additional clause addendum
The additional clause addendum provides standardized language
for special situations (such as backup offers and missing buyer
signatures).
Addenda Incorporated
,All of the following addenda may be included in Subsection 1f
of the purchase contract EXCEPT which one? Correct Answers
Buyer pre-qualification
Subsection 1f allows the parties to state which addenda have
been added to the purchase contract—including additional
clause, buyer contingency, domestic water well, HOA, lead-
based paint disclosure, loan assumption, on-site wastewater
treatment facility, seller financing, short sale, and solar
lease/solar loan assumption.
Addenda Incorporated (1f)
Remember those disclosure forms we talked about in the
previous section? Items like HOA disclosures, lead-based paint
disclosures, and other addenda should be listed or marked in this
section if they are being provided for the transaction. Correct
Answers
Additional clause addendum Correct Answers Provides
standardized verbiage for situations where a backup contract is
submitted or a buyer spouse or co-buyer signature is missing
from the purchase contract
Affidavit of Disclosure (4e)
A transfer of five or fewer parcels of property in an
unincorporated area of the county requires the filing of an
affidavit of disclosure. The seller must provide the buyer with
the affidavit within five days of contract acceptance, and the
buyer has the inspection period or five days after receipt of the
affidavit (whichever is later) to disapprove any items.
, The affidavit must be given to the buyer at least seven days
prior to close of escrow in order for the buyer to have time to
disapprove of any items. The affidavit contains latent defects,
such as existing flood plains, access, etc., that could be material
to the sale. The seller must record the affidavit with the deed at
close of escrow. Correct Answers
Alternative Dispute Resolution
Decide whether each of the following examples would be
excluded from the alternative dispute resolution (ADR)
requirements.
1) An issue sent to small claims court
2) Enforcement of a mechanic's lien
3) Filing a notice of lis pendens Correct Answers 1) Excluded
from ADR requirements
2) Excluded from ADR requirements
3) Not excluded from ADR requirements
ADR requirements state that parties must go through mediation
first, then arbitration.
Alternative Dispute Resolution (ADR) (7c)
Under the terms of the purchase contract, first the parties
mediate, and then they arbitrate. It is important that the parties
understand that by accepting this clause as written they're
waiving their rights to sue to settle a dispute. For many people,
this is fine, but there are others who would not want to give up
their litigation rights.
Exclusions from ADR (7d)
* An issue sent to small claims court (less than $3,500)
* A judicial or non-judicial foreclosure, sheriff's sale, etc.
, * An unlawful entry or detainer action
* The filing or enforcement of a mechanic's lien
* An issue having to do with probate court
Even filing a notice of lis pendens (notice of pending legal
action) does not relieve the parties of their contracted
responsibilities to use alternative dispute resolution. Correct
Answers
Appraisal (2l and 2m)
Last, but not least, the purchase contract contains an appraisal
contingency. An appraisal contingency gives the buyer the
option to terminate in the event the property doesn't appraise at
the agreed-upon sale price. An appraisal contingency protects
the buyer from being contractually obligated to purchase a
property that doesn't appraise at or more than the purchase price,
which could result in the lender not funding the loan.
Buyers have five days after receiving notice that the appraised
value of the property is less than the purchase price to cancel the
purchase contract and receive their earnest money back. If the
buyer waits longer than five days, the appraisal contingency is
waived.
The buyer and seller decide who will pay for an initial
appraisal. If the buyer's lender requires an updated appraisal
before closing, then the buyer must pay for it. Inspections are
also paid for by the bu Correct Answers
Appraisal Cost(s)
The Halls have agreed to pay for getting an appraisal on Jones's
property. Where should this information go in the purchase
contract? Correct Answers Subsection 2m
