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Home Buyers

Understanding The Home Loan Process: AAR Purchase Contract

By July 14, 2021January 19th, 2023No Comments

As a buyer, there are certain contractual obligations you must meet when purchasing a home with lender financing. In lieu of paying cash, buyers are required to qualify for a loan in order to complete the purchase.

The best practice is to complete a loan application with a lender and be prequalified before making an offer on a home. It’s the buyer’s responsibility to provide the required down payment and ensure that the buyer’s lender deposits the remainder of the purchase price into escrow prior to the close of escrow.

How to Prepare to Make an Offer on a Home

Not sure how to get started, how much you can afford, or what to expect when buying and financing a home? Set yourself up for success by meeting with a lender beforehand to get prequalified. What you can afford depends on your income, credit rating, current monthly expenses, downpayment, and current interest rates. It’s also important to discuss the different loan options that are available based on how much you can afford.

Once you have a pretty good idea of your priorities and budget, you’re ready to start home shopping for homes in earnest. Make a shopping must-haves checklist as well as a wish list. Once you find a property that “checks all the boxes,” it’s time to have your Realtor prepare an offer for purchase.

The Purchase Contract and Financing

The financing section of the purchase contract has several steps that need to be met. First and foremost this section is a contingency in the purchase contract. The Arizona Association of Realtors (AAR) purchase contract reads:

“Buyer’s obligation to complete this sale is contingent upon Buyer obtaining loan approval without Prior to Document (“PTD”) conditions no later than three (3) days prior to the COE Date for the loan described in the AAR Loan Status Update (“LSU”) form or the AAR Pre-Qualification Form, whichever is delivered later. No later than three (3) days prior to the COE Date, Buyer shall either: (i) sign all loan documents; or (ii) deliver to Seller or Escrow Company notice of loan approval without PTD conditions AND date(s) of receipt of Closing Disclosure(s) from Lender; or (iii) deliver to Seller or Escrow Company notice of inability to obtain loan approval without PTD conditions.

In the event the buyer cannot obtain financing, there is an Unfulfilled Loan Contingency: This Contract shall be canceled and Buyer shall be entitled to a return of the Earnest Money if after diligent and good faith effort, Buyer is unable to obtain loan approval without PTD conditions and delivers notice of inability to obtain loan approval no later than three (3) days prior to the COE Date. If Buyer fails to deliver such notice, Seller may issue a cure notice to Buyer in which case the buyers earnest money could be in jeopardy.”

Your Realtor Is Here To Help!

Don’t let the home-buying process overwhelm you. If you’re looking for an experienced, knowledgeable real estate agent to help guide you through, contact Tru Realty today!

If you have any specific questions about purchase contracts, feel free to email me directly at or call me at 480-327-6700.

About the Author

Barry Nicholas is the Designated Broker at Tru Realty. He currently has active broker’s licenses in Arizona, Kansas, Missouri, and Oklahoma and is a graduate of the Realtor Institute. He also holds the Certified Residential Specialist Designation. Barry provides his clients with the expertise and acumen that addresses the ever-changing trends in home sales, property marketing, and real estate technology. As your Broker, he views customer service as his utmost priority.


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