Contracts
Under the Arizona AAR Residential Purchase Contract, the default remedy if a seller breaches by failing to close is:
AThe buyer's only remedy is return of earnest money
BThe buyer may pursue specific performance, damages, or return of earnest money✓ Correct
CThe seller automatically pays a penalty of 5% of the purchase price
DThe buyer receives double the earnest money as liquidated damages
Explanation
If a seller breaches a purchase contract in Arizona, the buyer may pursue specific performance (forcing the sale), seek compensatory damages, or elect to cancel the contract and receive a refund of the earnest money.
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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.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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.
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