Under Arizona law, what must be written into the contract when a sale requires financing?

In Arizona, when a sale involves financing, it's essential to include a financing contingency in the contract. This contingency specifies that the sale is dependent upon the buyer obtaining financing under certain terms and conditions. By incorporating a financing contingency, the buyer is protected; if they are unable to secure the necessary funds, they can avoid being bound to the contract without penalty. This is especially important because it allows buyers to back out of the agreement if financing cannot be arranged, ensuring they do not risk losing their earnest money or being held liable for breach of contract.

Including a financing contingency in the contract also creates clarity regarding the expectations surrounding the financing process. It provides a specific condition that must be met for the contract to be enforceable. This contrasts with simply stating the amount, type, or time frame for financing, which can provide details but do not establish the crucial conditional nature of the agreement necessary for protection in the event financing fails.