Additional Clause/Buyer Contingency /Multiple Counter Offer and Multiple Offer/Counter Offer

The Additional Clause Addendum, Buyer Contingency Addendum, Multiple Counter Offer and Multiple Offer/Counter Offer forms have all been revised for release in July 2023. The major revisions to these forms are discussed below. 

Additional Clause Addendum

The Additional Clause Addendum contains numerous important clauses that may be applicable in a real estate transaction.  A new clause was added to the Additional Clause Addendum to assist wholesale buyers and wholesale sellers in a residential real property transaction to disclose their wholesaler status as required by law. 

In September 2022, a new law became effective which requires wholesalers to disclose their wholesaler status in writing prior to entering into a binding residential real property contract. See A.R.S.§ 44-5101. 

A “wholesale buyer” is a person or entity that enters into a purchase contract for residential real property as the buyer and assigns that same contract to another person or entity. A “wholesale seller” is a person or entity that enters into a purchase contract for residential real property as the seller, that does not hold legal title to that real property and that assigns that same contract to another person or entity. 

Pursuant to the statute, if a wholesale buyer fails to make the required disclosure in writing, the seller may cancel the contract at any time prior to the close of escrow without penalty and may retain any earnest money paid by the wholesale buyer.  Similarly, if a wholesale seller fails to make the required disclosure in writing, the buyer may cancel the contract at any time prior to the close of escrow without penalty and shall be refunded all earnest money.   Therefore, the use of this new clause in the Additional Clause Addendum is extremely important when representing a wholesale buyer or seller. 

Additional revisions to the Additional Clause Addendum include changing the name of the “Waiver of Appraisal” provision to “Appraisal Contingency Waiver,” which more accurately describes the provision and minor changes to the Non-Refundable Earnest Money clause for clarity.

A redlined version of the revised Additional Clause Addendum can be found here. 

Buyer Contingency Addendum

The Buyer Contingency Addendum is for use when the buyer and seller agree to make the Residential Resale Real Estate Purchase Contract (“Contract”) contingent on either the closing of a pending sale of the buyer’s property or upon an accepted offer for the buyer’s property. 

The previous versions of the Buyer Contingency Addendum contained an automatic cancellation if the buyer did not accept an offer, or the pending sale of the buyer’s property did not close by the date specified.  In other words, the form did not provide the buyer an option to waive the contingency and proceed in the transaction towards Contract close of escrow (“COE”) in such an event. 

The form was revised to allow the buyer three days after the time specified for the closing of the pending sale of buyer’s property or for accepting an offer to purchase the buyer’s property, to waive the buyer’s contingency in the manner required by the Contingency Waiver Provision contained in the form.  To waive the contingency, the Contingency Waiver Provision requires the buyer to provide:

• written documentation from buyer’s lender that buyer can close escrow by the COE date without the sale and closing of buyer’s property; or
• in the event of an all cash sale, evidence of buyer’s financial ability to close escrow by the COE date without the sale and closing of buyer’s property.

Additional revisions were made to further clarify the contingency terms and arrange the information into a more easily understandable format.  Instructions and section numbers were also added to the form for clarity.

A redlined version of the revised Buyer Contingency Addendum can be found here. 

Multiple Counter Offer and Multiple Offer/Counter Offer

The Multiple Counter Offer form is for use when the seller is making a counter offer to more than one buyer.  A revision to the form clarifies that “Seller Final Acceptance” requires the seller to sign and date the Multiple Counter Offer form and deliver it to the buyer or buyer’s broker pursuant to Section 8 of the Contract to create a binding agreement.

The Multiple Offer/Counter Offer form is for use when the buyer is making an offer or counter offer to more than one seller, but does not want to risk entering into multiple contracts with multiple sellers.  The revision to the form clarifies that “Buyer Final Acceptance” requires the buyer to sign, date and deliver the acceptance to the seller pursuant to the Contract to create a binding agreement.  Additional language was added to the Buyer Final Acceptance section to clarify that, except as modified by the Multiple Offer/Counter Offer provisions, all other terms and conditions of the prior identified offer/counter offer(s) remain unchanged and are deemed accepted.  

A redlined version of the revised Multiple Counter Offer can be found here and a redlined version of the Multiple Offer/ Counter Offer form can be found here.

Prior Form Revisions

The Arizona REALTORS® strives to keep all its forms up to date as laws change or industry practice evolves.  Once released, the forms library contained on all of the Arizona REALTORS® forms licensing platforms are updated. 

Form updates are made to minimize your risks and ensure legal compliance. Don’t take a chance with outdated forms.  All prior Arizona REALTORS® form revisions (2014 – 2023) can be found at:  https://www.aaronline.com/2019/05/20/form-revision-updates/

K. Michelle Lind, Esq. is an attorney who currently serves Of Counsel to the Arizona REALTORS®.  She is also the author of the book – Arizona Real Estate: A Professional’s Guide to Law and Practice (3rd Ed.). 

For more real estate related articles, visit Michelle’s Blog at Arizona Real Estate – A Professional’s Guide to Law & Practice. (arizonarealestateprofessionalguide.blogspot.com).

This article is of a general nature and may not be updated or revised for accuracy as statutory or case law changes following the date of first publication. Further, this article reflects only the opinion of the author, is not intended as definitive legal advice and you should not act upon it without seeking independent legal counsel.  6/7/23