REAL ESTATE CONTRACTS ARTICLES
Internet Purchase Forms Should Not Be Used
Question: We live near Lake Pleasant. Our next-door neighbor is retiring, and he and his wife are moving back to California. They want to sell us their home without paying a commission to a real estate broker. Our plan is to buy their home as an investment property for short-term rentals because we are near several spring training baseball fields. Our next-door neighbor has filled out a purchase contract that he located on the internet. Is it ok to use this purchase contract? Answer: No. You should hire a local Realtor for a minimal commission who will use the Arizona…
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Seller Can Reject Buyer’s Demand For Only Licensed Contractors
Question: We are purchasing a home in North Phoenix using the Arizona Association of Realtors® Residential Resale Real Estate Purchase Contract (“AAR Purchase Contract”). Our home inspector gave us a list of repairs that need to be done to the home. We then submitted a Buyer’s Inspection Notice and Seller’s Response (“BINSR”) with a list of repairs to the seller as provided in the AAR Purchase Contract, and requested that all these repairs be done by a licensed contractor. The seller’s listing agent said that under the AAR Purchase Contract the repairs only have to be done in a “workmanlike”…
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Seller and Buyer Should Mediate Before They Litigate
Question: We signed a purchase contract to buy an expensive home in Carefree. We deposited $25,000 earnest money. Because of the COVID-19 crisis, however, our financial situation significantly changed, and we no longer want to buy the home. We agreed with the seller to cancel the purchase contract, and we are willing to forfeit the $25,000 earnest money. The seller has refused, however, to accept the $25,000 earnest money. Instead, the seller claims that, since the purchase contract was signed and escrow was opened, the value of the home has diminished at least $100,000 due to the COVID-19 crisis. The…
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CC&Rs Can Allow An HOA To Approve Potential Tenants
Question: The problem in our community in Tempe is not short-term rentals, but rentals to ASU college students who turn the home into a modern-day “Animal House.” Can we amend our CC&Rs to prohibit rentals to tenants who are less than 21 years old? If not, can our HOA board of directors interview every potential tenant to eliminate the “John Belushi’s,” and only allow rentals to hard-working college students? Answer: Yes to both questions. First, although families with children, and disabled individuals, e.g., senior citizens with dementia, are both protected Fair Housing classes, age by itself is not a protected…
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Home Builders Require Mediation And Arbitration
Question: We signed the builder’s purchase contract to buy a new home in the San Tan Valley. The builder’s sales agent made numerous false statements, especially in regard to the upgrades that were available in the home. The “bottom line” is that we canceled the purchase contract and demanded our $20,000 earnest money back. The builder refuses to give the $20,000 earnest money back to us. In addition, the builder demands reimbursement for the $28,000 cost of upgrades that the builder says are worthless to any new buyer of the home. Under the builder’s purchase contract we are required to…
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Statute of Limitations for HELOCs
Question: When we bought our Chandler home in 2006, we got a 30-year first mortgage with Bank of America, and a Wells Fargo $100,000 second mortgage home equity line of credit (“Wells Fargo HELOC”). We used this $100,000 for a swimming pool and for landscaping in our back yard. In 2011 we both lost our jobs and we had financial difficulties. Although we were able to keep our first Bank of America mortgage current, we stopped paying our Wells Fargo HELOC. Last week we received a letter from an attorney that our Wells Fargo HELOC balance is $160,000, and that…
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Texts Between Seller and Buyer can be a Purchase Contract
Question: We wanted to buy a beautiful home in Sedona. The problem during the negotiations for the purchase of this home was that we live in Phoenix and the seller lives in Texas. Neither of us were represented by brokers. Most of our negotiations with the seller were by texts between the seller and us. The major terms of the purchase contract were in these texts: the purchase price, the closing date, the name of the escrow company, and that there would be no financing. Each of the seller’s texts had the seller’s name and address at the bottom of…
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Six-Month Lease with Right to Cancel After One Week is a Short-Term Rental
Question: Our Chandler HOA has a CC&R that prohibits short-term rentals of a home for less than six months. The six-month lease that our lawyer drafted included a provision that allowed the tenant to cancel the lease and move out with one week’s notice. Our tenant signed this six-month lease, and at the same time gave us the one-week notice to move out. After our tenant moved out one week later, a neighbor complained to the HOA that this six-month lease was actually a short-term rental of one week. The HOA agreed with the neighbor, and fined us $500 per…
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