Arizona Real Estate Terminology: A Guide for Buyers and Sellers

Understanding Arizona Real Estate Terminology

Whether you’re buying or selling a home in Arizona, understanding key real estate terms will help you navigate the process with confidence. Below is a glossary of important terms commonly used in Arizona real estate transactions.

1. Arizona Association of REALTORS® (AAR)

The statewide organization representing real estate professionals in Arizona. They provide standardized contracts and industry guidelines.

2. Arizona Purchase Contract

A legally binding agreement between a buyer and seller outlining the terms of a home purchase. Arizona uses the AAR Residential Resale Real Estate Purchase Contract.

3. Earnest Money Deposit (EMD)

A deposit made by the buyer to show good faith when making an offer. Typically held in escrow and applied toward closing costs.

4. Escrow

A neutral third party (usually a title company) that holds funds and documents until all conditions of the sale are met.

5. Title Insurance

A policy protecting buyers and lenders from legal claims against the property’s ownership.

6. HOA (Homeowners Association)

A governing body in planned communities that enforces rules and manages common areas. Arizona has strict HOA regulations buyers should review before purchasing.

7. SPDS (Seller’s Property Disclosure Statement)

A required document in Arizona where sellers disclose known material facts about the property.

8. CLUE Report (Comprehensive Loss Underwriting Exchange)

A report detailing a property’s insurance claim history, often requested by buyers to assess potential risks.

9. Appraisal

An evaluation of a property’s value by a licensed appraiser, required for mortgage approval.

10. Inspection Period

A timeframe (typically 10 days in Arizona) where buyers can conduct home inspections and negotiate repairs with the seller.

11. Dual Agency

When one real estate agent represents both the buyer and seller in a transaction. Arizona allows dual agency but requires full disclosure.

12. Deed of Trust

Arizona uses a deed of trust instead of a mortgage, involving three parties: the borrower, lender, and a trustee who holds the title until the loan is paid.

13. Loan Contingency

A clause in the contract allowing the buyer to cancel if they cannot secure financing.

14. Short Sale

A home sale where the seller owes more on the mortgage than the property is worth, requiring lender approval.

15. 1031 Exchange

A tax-deferred exchange allowing investors to swap one investment property for another without immediate capital gains taxes.

Final Thoughts

Understanding these Arizona-specific real estate terms will help you make informed decisions when buying or selling a home. If you have further questions, consult with a licensed Arizona real estate agent or attorney.

For more home buying and selling insights, check out our other guides!