Contracts
A buyer who defaults on an Arizona purchase contract without a valid contingency may lose:
ATheir right to purchase any Arizona property for 2 years
BThe earnest money deposit as liquidated damages (if so specified in the contract)✓ Correct
CNothing, as Arizona law protects buyers from forfeiture
DOnly 50% of the earnest money
Explanation
If a buyer defaults without a valid contractual reason, the earnest money may be forfeited to the seller as liquidated damages, as typically specified in the Arizona residential purchase contract.
People Also Study
Related Arizona Questions
- The Arizona Association of REALTORS® Residential Purchase Contract provides that earnest money deposited in escrow is:Contracts
- An Arizona purchase contract earnest money deposit is typically held by:Contracts
- Which clause in an Arizona purchase contract allows the buyer to cancel and receive a refund of earnest money if they cannot obtain financing?Contracts
- What is the purpose of an earnest money deposit in an Arizona purchase contract?Contracts
- The Arizona Association of REALTORS® Residential Resale Purchase Contract requires agency disclosure:Agency
- In Arizona, earnest money deposits must be deposited into a trust account within how many business days of acceptance?Arizona License Law
- An Arizona licensee deposits earnest money in a trust account. Under Commissioner's Rules, the deposit must be made within:Arizona License Law
- A developer in Arizona cannot sell or accept a deposit on a lot in a new subdivision before the ADRE Public Report is issued. A buyer who signs a purchase contract before receiving the Public Report may:Land Use & Zoning
Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Math Concepts
State-Specific Concepts
Escrow Disputes
Study This Topic
Practice More Arizona Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Arizona Quiz →