Additional Terms and Conditions & Seller Acceptance-2017 AAR PC

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What are the risks associated with the Additional Terms and Conditions Section of the agreement?

  • Improper calculation of time periods
  • Improper notice
  • Ineffective cancellation notice

 Section 8.a Lines 344-389

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 Section 8.b Lines 390-393

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Any loss or damages to the premises after the date of contract acceptance and before COE is the responsibility of the Seller to repair unless the total cost of damages exceeds 10%.

Section 8.c, 8d, 8e Lines 394-397

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  • Brokers are granted permission to advise the public of the contract.
  • The contract is governed by Arizona Law
  • The parties acknowledge that time is of the essence in the performance of the duties agreed to in the contract.
Quick Quiz

Fill in the Blank:
Any loss or to the premises after the date of contract acceptance and before COE is the responsibility of the Seller to repair unless the cost of damages exceeds 10%.

Section 8.f Lines 398-403

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  • Compensation is addressed by a separate written agreement and shall be delivered to the escrow company for payment through title at the close of escrow.
  • If seller is obligated to pay the Broker(s), then the contract assigns seller proceeds to be paid through title at close of escrow
  • If compensation is being by the buyer, it is to be collected by title as a condition of the close of escrow.

Section 8.g Lines 404-408

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  • Faxes and electronic agreements are still considered originals
  • Agreements signed in counterpart are still considered a single agreement

What is the single exception to the counterpart rule?

Lead based paint.  LBP must always be signed in a single document.

Section 8.h Lines 409-410

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All reference to days in the contract are calendar days beginning at 12:00 am and ending at 11:59 pm

Quick Quiz

Fill in the Blank:

Agreements signed in counterpart are still considered a single .

 Section 8.i Lines 411-415

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  • All timelines specified in the contract require full calendar days
  • The first day of the event doesn’t count
  • The last day does count

 Section 8.j Lines 416-418

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  • The contract is the sole agreement between the parties—no other agreements exist
  • Contract can only be modified by signed written agreement
  • Failure to initial any page does not invalidate the agreement
Quick Quiz

Fill in the Blank:
All reference toin the contract are calendar days beginning at 12:00 and ending at 11:59.

Section 8.k Lines 370-371

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  • Seller has the right to accept additional offers as backup offers
  • Any subsequent offer accepted by the seller must be contingent on the cancellation of the existing offer

Section 8.l Lines 421-423

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  • Either buyer or seller can exercise their contractual rights to cancel the contract
  • All cancellations must be in writing
  • All cancellations must state the reason for cancellation

Section 8.m Lines 424-427

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  • All contract notices must be in writing
  • Delivery is made when:
  • Hand delivered
  • Faxed
  • Emailed
  • Overnight courier service

Quick Quiz

Fill in the Blank:

Either buyer or can exercise their contractual rights to cancel the .

Section 8.n Lines 428-434

section-8-n-lines-428-434Buyer and seller release Broker(s) harmless and release them from liability and responsibility regarding:

  • Financing
  • Property Condition
  • Square Footage
  • Lot Lines & Boundaries
  • Property values
  • Rent
  • Environmental Problems
  • Sanitation Systems
  • Roof
  • Wood Infestation
  • Building Codes
  • Government Regulations
  • Insurance
  • All matters relating to the value or condition of the property

 Section 8.o Lines 384-390

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Acceptance occurs, and the offer becomes binding when the fully executed contract is delivered.

Section 8.p Lines 440-442

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Buyer and Seller have advised the contract consisted of Ten pages plus incorporated addenda and cautioned to read all documents.

Section 8.q & 8.r & 8s Lines 443-456

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  • Identification of Buyer
  • Identification of Buyer Broker
  • Confirmation of Broker Agency

Line 444 is identical to line 445, and line 458 is identical to line 459. Why have identical lines been added?

It is becoming increasingly common for Buyers and Sellers to be represented by more than one agent, especially when the agents are members of a real estate team. The Risk Management Committee hopes that the aforementioned changes to Sections 8q, and 9a make it easier for more than one agent to be identified on the Purchase Contract when appropriate.

NOTE: According to the Arizona Department of Real Estate, the agent in direct contact with the consumer must be identified on the Purchase Contract.

Quick Quiz

Fill in the Blank:
occurs and the offer becomes binding when the fully executed contract is.

Section 9.a & 9.b 9.c Lines 457-473

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  • Identification of Listing Broker
  • Identification of Seller
  • Confirmation of Broker Agency
  • Provides for Counter Offer
  • Provides for Seller Rejection

Lines 467 and 468 were revised to state that, in the event, a Counter Offer is attached and incorporated by reference, “Seller must sign and deliver both this offer and Counter Offer.” Why?

Arizona’s Statute of Frauds, ARS § 44-101(6), states in part:

No action shall be brought in any court in the following cases unless the promise or agreement upon which the action is brought, or some memorandum thereof, is in writing and signed by the party to be charged, or by some person by him thereunto lawfully authorized: Upon an agreement for…the sale of real property or an interest therein.

As such, the Purchase Contract and Counter Offer are to be signed by Buyer and Seller.

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