AZ Real Estate cheat sheet

Arizona licensees are governed by A.R.S. Title 32, Chapter 20, and the Real Estate Commissioner's rules in A.A.C. Title 4, Chapter 28.

The Arizona Department of Real Estate (ADRE) is headed by a Commissioner appointed by the Governor; the Commissioner investigates complaints and may suspend, revoke, or fine.

Broker trust accounts: client funds such as earnest money go into a trust account; commingling with brokerage operating funds is prohibited.

Brokers must retain transaction and trust-account records for at least five years.

Advertising must identify the employing or designated broker; false or misleading advertising is a disciplinary ground.

Unprofessional conduct includes misrepresentation, fraud, undisclosed dual agency, commingling, and failure to disclose material facts.

The Commissioner may impose a civil penalty per violation in addition to suspending or revoking a license.

Licensees must disclose the nature of their agency relationship in writing using the prescribed disclosure form.

Salesperson prelicense: 90 clock hours of Arizona real estate education, minimum age 18, and a fingerprint clearance card.

Broker prelicense: 90 hours of broker education plus at least three years of full-time licensed experience within the preceding five years.

Licenses expire every two years; renewal requires 24 hours of continuing education, including mandated agency, contract, fair housing, and Commissioner's rules hours.

A salesperson may be compensated only by the employing broker; accepting payment directly from a client is prohibited.

The designated broker supervises licensees and is responsible for the brokerage's trust funds and records.

A corporation or LLC must hold an entity broker license with a designated broker.

An inactive licensee may not perform any act requiring a license until the license is reactivated.

Grounds for discipline include fraud, misrepresentation, failure to account for funds, and undisclosed dual agency.

Arizona's Agency Relationships in Real Estate Transactions Act (A.R.S. 32-2151.02 et seq.) governs agency duties and disclosure.

Agency disclosure must be in writing and provided before the client signs an agreement or an offer.

Dual agency is permitted only with the informed written consent of both buyer and seller.

A dual agent may not advocate for one party over the other and may not reveal either party's confidential information.

Fiduciary duties include loyalty, obedience, disclosure, confidentiality, reasonable care, and accounting.

Material facts about the property, such as latent defects and known hazards, must be disclosed to all parties.

Buyer's broker compensation may be paid by the seller, the buyer, or split; the source must be disclosed.

A written employment agreement defines the scope, term, and compensation of the brokerage relationship.

Statute of Frauds: a contract for the sale of real property must be in writing and signed by the party to be charged.

A counteroffer terminates the original offer; acceptance must be communicated to create a binding contract.

Earnest money is held in escrow and may serve as liquidated damages if the buyer defaults under the contract.

The AAR Residential Resale Purchase Contract gives the buyer an inspection period during which the buyer may cancel for any reason.

Contingencies such as financing, appraisal, title, and home sale must be satisfied or waived within stated deadlines.

A notice of breach typically triggers a cure period (often three days) before the non-breaching party may cancel.

Arizona sellers of residential resale property commonly provide a Seller Property Disclosure Statement (SPDS).

Equitable title passes to the buyer when the contract is signed; legal title passes at closing by deed.

Arizona uses deeds of trust; the trustee may foreclose non-judicially by trustee's sale after notice and publication.

Anti-deficiency protection (A.R.S. 33-814) generally applies to purchase-money loans on single- or two-family residences.

RESPA: the lender delivers a Loan Estimate within three business days of application and a Closing Disclosure at least three business days before closing.

Arizona escrow and settlement are typically handled by a title/escrow company; the deed is recorded with the County Recorder.

Title insurance: the owner's policy protects the buyer and the lender's policy protects the lender; a preliminary title report lists exceptions.

Prorations allocate property taxes, rents, and HOA dues between buyer and seller as of the closing date.

Arizona property taxes are billed in two installments and are paid in arrears for the prior year.

Loan-to-value ratio, debt-to-income ratio, and credit score determine loan approval and mortgage insurance requirements.

Fee simple absolute is the most complete ownership estate; life estates and leasehold estates are lesser estates.

Arizona is a community property state; property acquired during marriage is presumed community property.

Joint tenancy carries a right of survivorship; tenancy in common does not.

A general warranty deed contains the broadest covenants; a quitclaim deed conveys only the grantor's interest.

Zoning regulates use; a variance relieves a hardship, a conditional use permit allows a special use, and nonconforming uses may continue.

The Public Land Survey System creates six-mile townships of 36 sections; one section is 640 acres.

The three valuation approaches are sales comparison, cost, and income; capitalization rate equals net operating income divided by value.

Arizona property managers must be licensed brokers; tenant security deposits must be returned within 14 days after move-out with an accounting.