3.1 Arizona Purchase Contracts

The AAR Residential Resale Purchase Contract

Almost every Arizona resale deal uses the Arizona Association of REALTORS (AAR) Residential Resale Real Estate Purchase Contract, a roughly nine-page standardized form. The state portion of the Pearson VUE Arizona Salesperson exam (100 scored questions plus 15 pretest items, 75% to pass) leans heavily on how this contract's deadlines and notices work, so memorize the mechanics, not just the vocabulary.

A valid contract still needs the universal elements you learned on the national portion. Arizona adds the Statute of Frauds (A.R.S. § 44-101): any contract for the sale of real property must be in writing and signed by the party to be charged.

When the contract becomes binding

Arizona follows the rule that acceptance is effective only when communicated to the offeror. If the seller signs the buyer's offer but never delivers the signed copy, no contract exists yet. The contract's own "Time for Acceptance" line typically gives the other party until 5:00 p.m. on a stated date to accept; a late or modified acceptance is a counteroffer, which restarts negotiation. Any change to the offer's terms kills the original offer and creates a new one the original offeror may accept or reject.

Earnest money

Earnest money in Arizona is fully negotiable; there is no statutory minimum. It is usually delivered to the escrow company, where it credits toward the purchase price at closing. The contract requires the broker to state in writing the type of earnest money received (personal check, wire, etc.). If the deal cancels, disposition follows the contract: a buyer who cancels within the inspection period generally recovers the deposit, while a buyer who breaches after contingencies are removed may forfeit it.

Remember that earnest money is never automatically the seller's; release still requires a closing, written agreement of both parties, or a court order, which connects directly to the trust-account rules in Section 3.3. A common exam scenario describes a buyer who simply changes their mind two weeks after all contingencies have been waived; in that case the seller is generally entitled to the earnest money as the contract's stated remedy, though the AAR form caps the seller's recovery at the earnest money unless additional damages are pursued through the dispute-resolution clause.

Finally, do not confuse the purchase contract with a listing agreement or a buyer-broker agreement. The purchase contract binds buyer and seller to the sale; the listing and buyer-broker agreements are employment contracts between a principal and a brokerage. All three must be in writing, but only the purchase contract drives the escrow timeline, the inspection period, and the BINSR process tested here.

Key Deadlines and the BINSR Process

The default 10-day inspection period

Unless the parties write a different number on the form, the AAR contract gives the buyer a 10-day inspection period measured from contract acceptance. During this window the buyer may inspect the home, review HOA documents, investigate title and zoning, and order a wood-destroying-organism (termite) report. The buyer has three choices before the period ends:

1. Accept the property as-is and move forward;
2. Disapprove specific items and deliver a BINSR (Buyer's Inspection Notice and Seller's Response); or
3. Cancel the contract in writing for any reason and recover the earnest money.

How BINSR works

When the buyer disapproves items, the seller has five days to respond on the same BINSR form by agreeing to correct items, declining, or proposing alternatives. If the seller agrees to nothing, the buyer then has five days to either cancel or proceed and buy the home in its current condition. A classic exam trap: if the buyer does nothing after the seller's response, the buyer is deemed to have accepted the property and the deal continues.

Time is of the essence and the Cure Period

The AAR contract states time is of the essence, so every dated obligation is strict. Arizona softens this with the Cure Period: if a party believes the other is in breach, it delivers a written Cure Period Notice, giving the breaching party three days to cure before the deal can be cancelled. Without delivering that notice, a party generally cannot cancel for the other's nonperformance.

Close of Escrow (COE) is the date title transfers, funds disburse, and documents record. Worked example: a contract accepted June 1 with the default 10-day inspection means inspections run through June 11; if the buyer disapproves the roof on June 9 and the seller responds June 12 declining repairs, the buyer must cancel or proceed by June 17.

Counting days on the AAR contract

The AAR form counts in calendar days, not business days, and the day of acceptance is day zero — counting begins the day after. If a deadline lands on a Saturday, Sunday, or legal holiday, it rolls to the next business day. This day-counting rule produces many exam questions, so practice it: an offer accepted on a Wednesday with a three-day cure period gives the breaching party through the following Saturday (or the next business day if that Saturday is the deadline). Mixing up the trust-account "banking day" rule (Section 3.3) with the contract's calendar-day rule is one of the most common test errors.

Lastly, every dollar figure and deadline on the AAR form is negotiable except those imposed by statute. Agents fill in blanks; they never alter the pre-printed legal terms without using an approved addendum, because unauthorized edits can constitute the unlicensed practice of law.