Tony and Suzanne Marriott's Phoenix Arizona Real Estate Blog

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Write It Right The First Time - Or It May Result In Failure! - Part 6

The "standard" Residential Resale Real Estate Purchase Contract used in Arizona and provided by the Arizona Association of REALTORS® (AAR) is a document that both Buyers and Sellers should familiarize themselves with prior to the time where they are signing off on it.

 

A complete sample copy is publicly available on the AAR website at this link.

 

The first five posts in this series are available at the following links:

 

Write It Right The First Time - Or It May Result In Failure! 

 

Write It Right The First Time - Or It May Result In Failure! - Part 2

 

Write It Right The First Time - Or It May Result In Failure! - Part 3

 

Write It Right The First Time - Or It May Result In Failure! - Part 4

 

Write It Right The First Time - Or It May Result In Failure! - Part 5

 

This post focuses on the rest of Page 3 which covers the selection of the Title and Escrow company, and "escrow instructions".

 

 

Several observations about this section.

 

While the Buyer is free to choose the company they purchase Title Insurance from, nothing prohibits the Seller from choosing where they purchase Title Insurance, or which company handles escrow.

 

It's fairly common for the Seller to have had a preliminary title report run, and escrow opened, at their choice of Title and Escrow company, before they even receive an offer, and therefore quite common to stipulate in the Offer Instructions in the MLS, or in a Counter Offer, the Title and Escrow company they will be using.

 

The Buyer is welcome to choose the same Title Company as the Seller has chosen, and receives a "discount" on the Buyers Title Insurance policy as the Title and Escrow company have already done much of the research for the Sellers Title Insurance policy.

 

The Buyer can also choose to purchase their Title Insurance policy at a different Title company (as is their right), however, doing so results in a "split escrow" where the Seller's Title Insurance and Escrow is handled by the Title company of their choosing, and the Buyer's Title Insurance is handled by the Title company of their choosing, and the two companies have to coordinate the transaction.  Typically this is more complicated and more  expensive for the Buyer.  Split escrows will be addressed in a future post.

 

Lines 124-128 - Translation - If the transaction fails - and there is a dispute between Buyer and Seller regarding the disposition of the Earnest Money - the Title Company handling Escrow is expressly authorized (by Buyer and Seller) to determine the disposition of the Earnest Money, which they do by objectively interpreting the written terms of the contract and any Addenda, and not based on verbal discussions!

 

Lines 129-131 - Typically (but not always) the election is "prorated at COE".

 

Lines 132-134 - Be careful here - particularly if there is a Community Facilities District (CFD) involved!  CFDs will be addressed in a future post. 

 

Finally, failure to pay attention to Lines 135-138 can be very expensive if FIRPTA applies - make sure to thoroughly discuss that with Title and Escrow to avoid surprises!

 

 

 

 


To read the next post in this series, click the link below, as we delve into the contract itself:

 

Write It Right The First Time - Or It May Result In Failure! - Part 7

 

 

 

 

 

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About the Authors - Updated 2018

If you are considering a Traditional or Short Sale of your home in Phoenix, Scottsdale or any location in Maricopa County Arizona, you owe it to yourself to talk with the BVO Luxury Group @ Keller Williams Arizona Realty to determine whether Tony and Suzanne Marriott are the best real estate Brokers in the Phoenix and Scottsdale metropolitan area to help you with the Successful Sale of your home.

Tony and Suzanne have personally Listed, Sold and Closed more than a hundred Short Sales with the highest list to close rate in the Phoenix Metro Area!

Tony Marriott - Chief Operating Officer - BVO Luxury Group @ Keller Williams Arizona Realty

Suzanne Marriott - Chief Learning Officer - BVO Luxury Group @ Keller Williams Arizona Realty

Associate Brokers, REALTORS
BVO Luxury Group
Keller Williams Arizona Realty

Comments

Tony and Suzanne- every agent should know their contract like the back of their hand.  You've provided a great series that illustrates the Purchase Contract used in Arizona. 

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) almost 3 years ago

Short contract (our standard is a 20-page beast) or more to come? Good stuff!

[EDIT: Oh no, I see it says page 3 of 9, will check back for more later. :0)]

Posted by Becca Rasmussen (HomeSmart Cherry Creek) almost 3 years ago

Kathy Streib Thanks for your kind words and for the comment - much appreciated!

Posted by Tony and Suzanne Marriott, Associate Brokers, Serving Scottsdale, Phoenix and Maricopa County AZ (BVO Luxury Group @ Keller Williams Arizona Realty) almost 3 years ago

Yes there is much more to come Becca Rasmussen - thanks for your interest in this series and your comments - very much appreciated!

Posted by Tony and Suzanne Marriott, Associate Brokers, Serving Scottsdale, Phoenix and Maricopa County AZ (BVO Luxury Group @ Keller Williams Arizona Realty) almost 3 years ago

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