How to Read a Real Estate Purchase Agreement: A Clause-by-Clause Explanation
Thinking about buying or selling a home in Arizona?
Before you pop the champagne—or grab the moving boxes—there’s one super important thing you’ve got to understand:
👉 The Real Estate Purchase Agreement.
This isn’t just some boring paperwork. It’s your deal in writing. Every right, every deadline, every dollar—it’s all spelled out in this one contract.
Let’s break it down, Russell Brunson-style. 🎯
🎯 Section 1: The Basics
Who’s buying. Who’s selling. What property. How much.
✔️ Names: Make sure your legal name is correct.
✔️ Property Info: Address, parcel number, legal description—get it right.
✔️ Purchase Price: The full offer amount.
✔️ Earnest Money: A deposit showing you're serious. Usually held by an escrow company.
✔️ Close of Escrow (COE): That’s when the home officially becomes yours.
Big Tip: Time is of the essence! Missing deadlines = big problems.
💰 Section 2: Financing
This section is all about how the buyer’s going to pay.
✅ Pre-qualification letter: A must-have when making an offer.
✅ Loan contingency: If your loan falls through, you may cancel (with proof).
✅ Appraisal: If the home’s value comes in low, you’ve got options: walk, pay the difference, or negotiate.
Warning: Waiving these protections? Only do it if you really understand the risk.
🏛️ Section 3: Title & Escrow
This is the paperwork party behind the scenes.
Escrow Company: Handles the money, paperwork, and closing.
Title Commitment: Shows who really owns the house and any red flags.
Insurance: Title insurance protects against hidden surprises.
Pro Tip: Review the title docs carefully. Easements, liens, CC&Rs? They matter.
🕵️ Section 4: Disclosures
Sellers must tell buyers what they know.
📄 SPDS (Property Disclosure Statement): Think of it like the home’s report card.
📄 Insurance claims, lead paint info (if old), HOA docs—all must be shared.
Reminder: “As-is” doesn’t mean “tell-nothing.” Sellers still have to disclose known problems.
🔧 Section 5: Warranties
What has to work when you close?
HVAC
Plumbing
Electrical
Built-in appliances
If something breaks after you move in but wasn’t working at COE—you may be covered.
🔍 Section 6: Due Diligence
This is your inspection window (usually 10 days). Use it!
🧰 Hire inspectors.
🧾 Review HOA docs.
🧠 Think it over.
Then fill out the BINSR (Buyer's Inspection Notice and Seller’s Response). You can:
Accept
Cancel
Ask for repairs
This is your chance to renegotiate.
⚖️ Section 7: Remedies
Uh-oh. Someone didn’t follow the rules?
🛑 Cure Notice: Gives them 3 days to fix it.
💥 No fix = breach. Then you may lose your deposit or even face a lawsuit.
📝 Section 8: The Extras
Arizona law applies.
Time deadlines matter.
What’s in writing wins.
All addenda (extra forms) must be attached.
✍️ Section 9: Seller Acceptance
This is where the seller says yes, no, or sends a counteroffer.
🚫 Common Pitfalls (and How to Avoid Them)
❌ Don’t skip reading the contract.
❌ Don’t rely on verbal promises.
❌ Don’t miss deadlines.
✅ DO ask questions.
✅ DO get everything in writing.
🏁 Final Thoughts: Your Deal, Your Power
This contract is your roadmap to closing. Don’t be scared by the legal language. Know your rights. Know your deadlines. And most of all—know that you’re in control.
✅ Ask questions.
✅ Negotiate where it matters.
✅ Team up with a great agent who breaks it all down for you.
Want help reviewing a contract? I’ve got your back. Let’s talk.
