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Risk Tips

These tips are not legal advice. They should not be a substitute for advice from professional counsel or the assistance provided by an agent’s Designated Broker.

  • Risk Tip: Are you within the timeline? If not, it may be too late! :

    Risk Tip: Are you within the timeline? If not, it may be too late! 

    The Critical Date List from the Arizona Association of REALTORS® identifies the critical dates and timelines for the major activities of the typical escrow process. Using this form keeps the escrow process focused on the tasks at hand and within the specified due dates mandated in the Arizona Residential Purchase Contract. Any questions or deviations should be directed to your broker and company best practices policy.

    Get the Critical Date List here.

    This tip is not legal advice. It should not be a substitute for advice from professional counsel or the assistance provided by an agent’s Designated Broker. 

    April 2024
  • Risk Tip: Pima County Recorder’s Fraud Guard:

    Risk Tip: Pima County Recorder’s Fraud Guard
    Did you know….
    Pima County Recorder’s Office offers a free Document Monitoring Service called Fraud Guard.
    https://www.recorder.pima.gov/FraudGuardInfo
    Fraud Guard Information
    Fraud Guard is a simple way to help you avoid becoming a victim of property fraud.
    It is a free service provided by the Pima County Recorder for the benefit of all who own property or
    businesses in Pima County.
    Fraud Guard allows you to register your individual or business name, and when a document is recorded
    with your name on it, you will be notified via email. This gives you an early warning of property fraud
    being committed in your name.

    How to Sign Up for Fraud Guard Alerts
    Enrolling in Fraud Guard is a two-step process:

    1. Click here to sign up for an account. Once you have filled in and submitted the registration form,
      a verification link will be sent to the email address you provided. Click on the link in the email to
      activate your account.
    2. Once your account is active, log in to Fraud Guard, and click “Continue” on the disclaimer page
      to go to your Alerts page. Follow the instructions to create Alerts for your individual or business
      names so you can receive notification of new recordings using those names. 
    Be sure to click the “Save” buton to save your Alerts.

    February 2024
  • Risk Tip: New Federal Reporting Requirement:

    Risk Tip: Did you know….
    Arizona Corporation Commission announced a New Federal Reporting Requirement Under the Corporate Transparency Act.
    The United States Congress has passed the Corporate Transparency Act (CTA) to combat money laundering and terrorist financing. This Act mandates beneficial ownership reporting for corporations, limited liability companies, and similar entities registered in the United States. Entities formed or registered before January 1, 2024, must file an initial beneficial ownership report before January 1, 2025. Click here for more information.

    January 2024
  • Risk Tip: Identifying Potential Buyer Fraud:

    This scam is a longer process than the typical Seller Scam scenario.

    Some of the red flags include:

    The buyer:

    • provides falsified proof of funds well beyond the offer price (i.e.$23,000,000 for a $800K purchase)
    • does not respond in a timely manner
    • decides, after a few days, to have their attorney handle the transaction
    • purchaser is a business entity – inconsistency in documents
    • the buyer’s exhibits sense of urgency
    • overpaying the earnest money and requesting a refund                 

    What you can do:

    • contact the institution on the proof of funds document – don’t use the phone number on the document. If possible take the document to a local branch of that institution for verification of authenticity.
    • ask for a second method to contact them (I don’t use email, my phone is being repaired…)

    How does the buyer “win”?  The buyer states that the funds are suddenly tied up for several months, but since he really wants the property, he asks to rent the property for a few months.  He moves in, but never pays the rent.  Likely a false identity was used so there is no recourse and the property may need repairs.

    September 2023
  • Risk Tip: Be a Pro, be in the know!:

    Within one (1) business day of marketing a property to the public, the listing broker must submit the listing to the MLS for cooperation with other MLS participants. Public marketing includes, but is not limited to, flyers displayed in windows, yard signs, digital marketing on public facing websites, brokerage website displays (including IDX and VOW), digital communications marketing (email blasts), multi-brokerage listing sharing networks, and applications available to the general public. 
    Click here to view the Coming Soon Guide 
    Click here for more information on the Clear Cooperation Policy
    Click here for NAR’s video on Understanding the MLS Clear Cooperation Policy

    August 2023
  • Risk Tip: Is your listed Condo Warrantable or Non-Warrantable?:

    This is so important to know when you accept a purchase offer. Your purchase offer may become invalid if the condo is not an approved (warrantable) condo. Yes, there are condos with approved financing options for non-warrantable units, but the down payment and interest rate requirements may be greater than Loan Status Report may reflect. This may create a hardship for the homebuyer. Do not solely rely on the closed sales showing conventional financing.


    It is easy to see if a condo is FHA approved, using the HUD website: VA financing will also use this site. HUD does allow lenders to do a spot approval for that specific unit and not entire condo project if the project does meet the established condo requirements.
    Lenders must have FNMA/Freddie Mac Form 1076 completed to determine if a condo meets the requirements of being warrantable. This can be accomplished by sending this form to the condo management department or using their preferred website, HomeWise Docs. https://sf.freddiemac.com/docs/pdf/forms/condo_questionnaire_form_short.pdf. The red flags may be occupancy vs. investor ratio, cash reserves, ownership of multiple units by one party, delinquency of HOA dues, pending litigation, etc. Lenders do have the ability to do a lender’s certification of the condo approval, providing that it meets all the warrantable requirements.
    It may be best to speak with your preferred mortgage lender to see if this condo unit can be warrantable

    July 2023
  • Risk Tip: Reducing Liability in Writing Sight Unseen Offers:

    When writing sight unseen offers where your clients commit to purchasing or entering into an agreement without physically inspecting the property, it’s important to take certain precautions to mitigate potential risks and liability. Here’s a risk tip on how to lessen liability when writing sight unseen offers:

    1. Have your client sign a hold harmless to protect agent & Language should include acknowledgement of the risks to Buyer by submitting a sight unseen offer as well as acknowledgement that the Agent/Broker has advised client to view the property prior to offer acceptance and to attend inspections in person.
    2. Request and provide comprehensive documentation to your Buyer: photographs, videos, inspection reports, maintenance records, warranties, or any other relevant documentation.
    3. Engage professional third-party services. Strongly recommend and document such recommendations to hiring professional services to conduct independent inspections and appraisal of the property. This can provide an objective assessment and help identify any potential issues or discrepancies that may not be apparent in the provided documentation. The insights from these professionals can serve as valuable guidance and protect you from unforeseen liabilities.
    4. Encourage the Buyer to attend the final walk through in person – or at the very least have a representative meet you to represent the Do not perform the walk-through on behalf of your absent client. If no one is available to be present for the final walk through, ensure the Buyer signs the final walk-through waiver.

    Remember, even with precautions in place, there are inherent risks in sight unseen offers. Carefully evaluate the situation, communicate with your client the potential risks, so they can make an informed decision based on the available information. And as with everything…document, document, document.

    June 2023
  • Risk Tip: Potential Fraudulent Sellers :

    We have all noticed an increase in real estate fraud associated with free and clear vacant land (and even vacant homes). People are posing as “owners” of the property and contacting real estate agents in hopes of them listing their property… usually pushing for a quick cash sale for under market price.  Click here to read the full risk tip.

    May 2023
  • Earnest Money:

    The Residential Resale Real Estate Purchase Contract clearly stipulates that Earnest Money, if any, will be deposited UPON ACCEPTANCE of the offer. As such, it is incumbent upon all agents involved in the transaction to track and receive the earnest money receipt upon contract acceptance. If earnest money has not been received by the escrow agent, it may be necessary to issue a Cure Notice. Consult your broker for additional information.

    April 2023
  • Showing Etiquette and Safety:

    Whether we are representing buyers or sellers, one of the most crucial pieces of our business is our relationships with other agents, our peers. Our reputation in dealing with them is built over time and often precedes us, setting the tone for collaboration in a transaction. If we have a good reputation, agents will feel good about showing our listings and will be happy when we show theirs. The opposite can also be true. What does your reputation say about you? Ensure your success with this ‘One Thing’ – LEAD with the Golden Rule.  In your business, in your life.

    In our current market, many buyers are prepared to do a marathon house hunt before they make the decision to put in an offer. Whether we show 2 homes or 20, each showing should reflect professionalism and courtesy to our buyer, the seller, and our fellow agent.The following are some reminders to ensure our good reputation as well as a professional, successful, and safe showing of MLS listings to our buyers:
    Click here to read the full article

    March 2023
  • Fix & Flip:

    Have you encountered a situation where a person or business is operating as a middleman acquiring, improving, and selling homes?  If so, remember per A.R.S. 32-1121 (A) (14), all work performed for the purpose of selling the property, must be performed by licensed contractors if the total aggregate cost (materials and labor) is $1,000 or more, not minor in nature and/or requires a permit.

    In addition, the name of all of the licensed contractors who performed work on the property and their ROC number(s) must be disclosed in the purchase contract. (A.R.S. 32-1121 (A) (6).

    Please make sure these requirements are being met per Arizona laws and to protect all parties.
    January 2023
  • Agency:

    Unsure of when your AGENCY begins and ends or are you acting outside of your Agency relationship? 
    CHECK WITH YOUR BROKER!

    April 2022
  • New Construction:

    Agents need to be very diligent when working with home buyers who want to check out a New Construction home
    1) The site agent DOES NOT represent the buyer, you do, make sure to explain your agency relationship with the buyer. Use the AAR READE form, and Buyer Broker Exclusive Employment Agreement.
    2) ALWAYS attend the very FIRST contact with a New Home Site with the buyer-never let them wander there on their own.
    3) Make sure to register the buyer at the home site and get a copy of the registration before you leave the home site.
    Click here for the complete list

    November 2021
  • Flood Insurance- Is it needed? :

    The Federal Emergency Management Association (FEMA) has determined that areas within Southern Arizona, especially parts of Cochise County, Santa Cruz County and Pima County, particularly areas affecting the Town of Marana, may be added to floodplain designations which are associated with a higher risk of flooding. Residents in those areas may be required to purchase flood insurance for their homes and businesses. Floodplain maps and flood insurance information may be viewed online.  See www.fema.gov, www.floodsmart.gov. The municipality in which the property is located may additionally have its own floodplain designations and building restrictions.  Check with the City of Tucson, Oro Valley, Green Valley, Sahuarita, Marana, and/or http://pcmaps1.pima.gov/mapps/rfcd/parcelsearch/ for additional information.

    In addition, check out Floodplain Resources for Real Estate Professionals at https://webcms.pima.gov/cms/One.aspx?portalId=169&pageId=524569.

    Also please note, Zone X does not automatically mean that flood insurance will not be needed. Per Pima.gov “ZONE X includes areas where the flood hazard has not been mapped by FEMA but may have been mapped by a local jurisdiction; therefore ZONE X does not necessarily mean there are no flood hazards.”

    September 2021