Contracts
The Arizona Association of REALTORS® Residential Purchase Contract provides that earnest money deposited in escrow is:
AAutomatically forfeited if the buyer cancels for any reason
BRefundable only if mutually agreed upon by buyer and seller
CDistributed based on the terms of the contract and applicable contingencies✓ Correct
DAlways split equally between buyer and seller upon cancellation
Explanation
Disposition of earnest money depends on the contract terms and which contingencies, if any, apply. If the buyer cancels under a valid contingency, the earnest money is typically refunded.
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