Contracts
Under Arizona law, if a buyer exercises a contingency and cancels a purchase contract in good faith, the earnest money deposit:
AIs automatically forfeited to the seller as compensation for taking the property off the market
BShould be returned to the buyer since the contingency was not satisfied✓ Correct
CIs split equally between the buyer and seller
DIs held by the escrow company until a court order is received
Explanation
When a buyer properly exercises a contingency (such as an inspection contingency or financing contingency) and cancels the contract in good faith because the contingency was not satisfied, the earnest money should be returned to the buyer. The contingency was a condition of the buyer's obligation to proceed.
Related Arizona Contracts Questions
- A buyer includes an inspection contingency in their purchase contract. If the inspection reveals a major defect and the seller refuses to repair it, the buyer may:
- The Arizona Association of REALTORS® Residential Purchase Contract includes a 'BINSR' provision that allows the buyer to:
- Under Arizona contract law, which of the following is NOT a required element of a valid real estate contract?
- Under Arizona law, a listing agreement must include:
- In Arizona, the BINSR (Buyer's Inspection Notice and Seller's Response) is used during:
- The Arizona Residential Purchase Contract's inspection period allows the buyer to:
- In Arizona, the Seller's Property Disclosure Statement (SPDS) must be provided:
- Arizona has a state-mandated 'cooling-off period' for real estate purchase contracts:
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