Arizona Real Estate Contracts: What the Exam Tests
Arizona contract law for the salesperson exam — SPDS, purchase contract, deed of trust, and community property signing requirements.
Contract law is covered in both the national and state sections of Arizona's exam. Here's what you need to know.
Arizona Association of Realtors Contract
Most Arizona residential transactions use the Arizona Association of Realtors (AAR) Residential Resale Real Estate Purchase Contract. Key provisions:
Inspection period: Buyers have a negotiated period to conduct inspections. Unlike North Carolina's due diligence fee, Arizona's inspection contingency can result in the buyer requesting repairs or canceling with earnest money returned.
BINSR: Buyer's Inspection Notice and Seller's Response. After inspections, buyer submits a BINSR requesting repairs or credits. Seller responds — accepts, rejects, or counter-proposes. If no agreement, buyer may cancel.
Earnest Money: Held by the broker or escrow company. Released to seller if buyer defaults after contingencies are removed.
Seller's Property Disclosure Statement (SPDS)
Required for 1-4 unit residential sales. The seller completes this form disclosing known material defects. Buyers have a right to cancel after receiving the SPDS if they find it unsatisfactory (typically within the inspection period).
Community Property Signing Requirements
Arizona is a community property state. For the sale of community real property (acquired during marriage), both spouses must sign the contract and the deed. A contract signed by only one spouse for community property is unenforceable against the other.
Deed of Trust vs. Mortgage
Arizona uses deeds of trust. Default leads to non-judicial foreclosure (trustee sale). The process is faster than judicial foreclosure used in mortgage states.
Common Exam Scenario
Q: An Arizona buyer receives the Seller's Property Disclosure Statement and is unhappy with disclosed foundation issues. They are still within the inspection period. What can the buyer do? A: Cancel the contract and receive their earnest money back — the inspection period gives buyers the right to cancel for dissatisfaction with the property's condition.
[Practice Arizona contract questions at CARealestate.com/states/arizona](https://carealestate.com/states/arizona)
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