Contracts, Purchase Agreements, and Transaction Documents
Contract Fundamentals
Know the elements of a valid contract: offer, acceptance, consideration, capacity, and lawful purpose. Understand the statute of frauds and which real estate agreements must be in writing. Learn the Arizona Residential Resale Real Estate Purchase Contract structure: the offer, the counteroffer, the acceptance, and the contingencies such as inspection, financing, appraisal, and title review. Know the difference between a contingency and a condition, and how deadlines and notice provisions operate.
Key Transaction Documents
Understand the roles of the listing agreement, buyer-broker agreement, purchase contract, counteroffer, addenda, disclosure statements (seller's property disclosure, lead-based paint for pre-1978 housing), and closing/settlement statements. Know the cure period concept, the earnest money provisions, and how disputes over earnest money are resolved. Recognize that licensees prepare documents at the direction of the parties and do not give legal advice.
Traps
Common traps: missing that a counteroffer rejects the original offer; assuming verbal acceptance binds; overlooking that deadlines run from specified events; and treating the inspection period as an indefinite right to cancel. Another trap is a licensee drafting contract language or advising on legal rights.
Worked Example
A buyer submits an offer; the seller responds with a counteroffer; the buyer says "okay" by phone. Rule of thumb: a counteroffer operates as a rejection of the original offer, and acceptance must be communicated as the contract requires; a verbal "okay" may not satisfy a written acceptance requirement, so put it in writing.