A buyer in Tucson includes an appraisal contingency stating the property must appraise for at least the purchase price of $425,000. The appraisal comes back at $410,000. The buyer wants to proceed with the purchase but requests the seller reduce the price to $410,000. The seller refuses and counters at $420,000. What are the buyer's options under Arizona law?
Correct Answer
B) Can withdraw from the contract and receive full earnest money refund, or negotiate a mutually acceptable solution
The buyer can withdraw from the contract and receive full earnest money refund due to the failed appraisal contingency, or continue negotiating a mutually acceptable solution. Since the appraisal contingency was not satisfied, the buyer has the right to cancel. Option A is incorrect because the buyer has the right to withdraw due to the failed contingency. Option C is incorrect because the buyer is not obligated to proceed when a contingency fails. Option D is incorrect because neither party can force the other to accept terms; all agreements must be mutual.
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Related Topics & Key Terms
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Related Concepts
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
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