It’s too ‘Inconvenient’ for Your Seller to Comply with Arizona Real Estate Law?

logo that says contract law indicating the black-and-white nature of Arizona and real estate laws

logo that says contract law indicating the black-and-white nature of Arizona and real estate laws Anyone wanting a real estate license undergoes some pretty specific training in the area of Arizona and real estate laws. Although we are prohibited from giving legal advice, a realtor must be well-informed and aware of the laws regarding our profession. After all, we are being paid to protect the best interests of our clients. The same is true whether we are helping someone sell a home or buy a home anywhere from Scottsdale to Surprise, Arizona.

The Arizona Association of Realtors (AAR) produces the contract that is used by real estate agents in our area. The contract started out (many years ago and before my time) as one page. Through many years of litigation and lawsuits, our contract has evolved into 10 pages of what has been described by some as “legal mumbo-jumbo.” In part, the additional pages were provided to instruct all parties of their legal rights, provide remedies for default, and avoid lawsuits.

red x indicating don't give legal advice in this transaction for scottsdale residental real estateOkay, so realtors aren’t supposed to give out legal advice but — at a very minimum — we should understand the contents of the contract because we and our clients are bound by it.

It never fails to amaze me when the agent on the other side of a transaction chooses to ignore a paragraph for the convenience of their clients or themselves. Arizona real estate laws are not to be modified or excluded for convenience. The logo for this post is in black-and-white for a reason.

Here’s a real-life experience we encountered in a recent transaction. Our clients were buying Scottsdale residential real estate. They found their perfect home and, despite a multiple offer situation, were happy to have it under contract. The obstacle in this otherwise flawless transaction was the appraisal. You see, the house appraised for $10,000 less than the price on the purchase contract. This article will not cover appraisals or appraisers in Scottsdale or otherwise.

Sunset picture of a pool located in the backyard of Scottsdale residential real estateSo we put on our “negotiation hats” with the full intent of getting the purchase price reduced by $10,000 to meet the amount on the appraisal. The home seller wanted nothing to do with the price reduction citing multiple offers on the home and escalating prices in the current seller’s market. They said they would rather go back to the other people who submitted offers and try to get the full contract price. After all, a different appraiser would invariably have a different opinion of value. The sellers were convinced their house was worth the extra $10,000 and another appraisal would prove it. Our buyers believed the sellers and decided they loved the Scottsdale house enough to pay the extra $10,000.

As their realtors we were less than happy that the price was not reduced for our buyers. However, sometimes looking out for the best interest of your client means making sure they get the house they love. And our clients loved this house.

So our next point of negotiation was to persuade the seller to make repairs to the house based on defects found during the home inspection. We presented the defects to the seller. After a day of grumbling about the “multiple offers they received and about escalating prices in the current seller’s market” (as mentioned above), the seller reluctantly agreed to make the repairs. What follows is our e-mail conversation with the listing agent.

image depicting 2 computers exchanging e-mails between Tempe and Scottsdale residental real estate agents
“The repairs have been completed.”

“THANK YOU! Please send us copies of the repair receipts from your licensed contractors so we can forward them to our buyers for their records and warranties.”

“The seller won’t send you any receipts because it is too inconvenient. He is too busy and doesn’t want to bother his contractor. He has sold 50 homes and no one ever wanted receipts.”

“We were quite amazed when you said we shouldn’t inconvenience the seller by asking him to provide receipts for the repairs. You also mentioned your seller has sold over 50 homes and has never provided any receipts to anyone.

I’m not sure if you have an exemption from the AZ Purchase Contract in Scottsdale (I know this is a bad joke –sorry), but we did NOT strike lines 243-245 from the contract. It is a requirement of the contract to provide receipts whether or not it is inconvenient to the seller. For your reference:

Lines 243-245

(b) lf Seller agrees in writing to correct items disapproved, Seller shall correct the items, complete any repairs in a workmanlike manner and deliver any paid receipts evidencing the corrections and repairs to Buyer three (3)days prior to COE date or (fill in the blank) days prior to COE date.

¬†Additionally, whether or not you agreed with the lower appraisal we received, that fact remains our clients are paying above the appraised price which is DEFINITELY “inconvenient” to them.

¬†3 days before COE is Saturday. We are asking you to take the lead in this request and insure we get the paid receipts. Respectfully…”

“What I was saying is that the seller volunteered to do the repairs. Now he being asked to chase down a busy contractor to prove he did repairs that he normally would have said “no” to but based on what the neighbor said these were really good people and he wanted them to have the house perfect. I was just saying it is pretty obvious that repairs have been done but I will get you the receipts. Yes, I have not had one person ask for the receipts for the repairs over the last 2 years with this seller.”

image depicting 2 computers exchanging e-mails between Tempe and Scottsdale residental real estate agents

To this day we’re still not sure if this realtor was just lazy or didn’t know the contents of lines 243-245 in the AAR Purchase Contract? Everything he said in his last response was essentially a smokescreen and avoided Arizona real estate laws.

Was I being too picky with this realtor just because I’m a real estate broker and I’m obligated to uphold a higher standard? Perhaps I was just irritated with what I perceived to be arrogance on the part of this agent and his client? Maybe I should have called the agent’s broker and asked him/her if I was being too picky and was wound up a little too tight? But I didn’t.

Home buyers and home sellers beware. The real estate agent you choose will make suggestions that will either decrease or increase your liability.

Scottsdale Residential Real Estate and Arizona Real Estate Contract Laws