Do enough real estate transactions and it’s easy to forget the lingo we use here in Phoenix doesn’t necessarily translate for everyone. So here’s a quick guide to some of the most common terms you’re going to hear when buying Phoenix real estate:
Earnest deposit: Essentially a good faith payment, the earnest deposit is delivered to the escrow company at the start of the transaction and is applied to the final down payment (or full sales price on a cash sale) and/or closing costs. If there’s a dispute, the earnest deposit goes to the injured party in most cases, depending on the contract details.
Inspection period: How long is the legally mandated inspection period in Arizona? Trick question – there isn’t one. The Arizona Association of REALTORS’ Residential Resale Contract has a boilerplate 10-day inspection period though this is negotiable. On many bank owned homes this period is shortened to seven days or less by the lender. A buyer doesn’t have to agree, but disagreement means the lender will move on to the next buyer.
CLUE: This is an insurance claims history showing any claims filed within the past five years or since the owner purchased the property, whichever is most recent. These can be obtained from the owner’s insurance agent or a third-party company. You usually won’t see this on condos where there’s a blanket insurance policy or on a bank owned home.
SPDS: Sellers Property Disclosure Statement, a six-page form that in theory details everything the seller knows about the property. Actual residence in the home isn’t a requirement for completing the SPDS though some investors try to go that route. On a bank owned home, the lender will want this requirement waived by the buyer.
Cure Period: If something goes south, the AAR contract calls for a Cure Period Notice to be sent by the aggrieved party, giving the other party three days to rectify whatever the situation might be.
There’s much, much more to the contract … got questions? We’ve got answers.
[tags]Phoenix real estate[/tags]