ARTICLES & NEWS

REAL ESTATE TRANSACTIONS ARTICLES

Using Letters Of Intent In Real Estate Transactions

By Christopher Combs | April 17, 2022

Question: We want to rent a 7,000-square-foot home in Paradise Valley for two years for $12,000 a month. The owners live in Boston, and their attorney has drafted a letter of intent (“LOI”), which has been signed by the owners and forwarded to our rental agent for us to sign. Our rental agent says that the LOI is not binding on us, but simply states the basic terms of the two-year lease, e.g., 7,000-square-foot home, $12,000 monthly rent, and that the formal lease will be on the Arizona Association of Realtors (“AAR”) form lease. We have rented homes before, but…

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Buyer May Want To Waive Home Inspection

By Christopher Combs | March 13, 2022

Question: In a recent column you said that, if the seller was unhappy with the sale price of the home and as a result would not allow a home inspection by the buyer, the buyer could waive the home inspection. In other words, you said that the buyer should “suck it up” because the seller wanted more money! You obviously do not understand the terms of the AAR Purchase Contract. First, the seller has signed the AAR Purchase Contract, and therefore has agreed to all terms and conditions, including a home inspection by the buyer. Second, lines 302-303 of the…

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Listing Agent’s Representations Can Be Purchase Contract

By Christopher Combs | February 27, 2022

Question: We made a full listing price offer of $480,000 with $20,000 earnest money for a home in Casa Grande. Our real estate agent emailed our $480,000 offer to the listing agent who emailed our real estate agent back the next day “Sounds good. Let’s open escrow. Seller signing the purchase contract. Will send tomorrow.” After we received a copy of this email from our real estate agent, we thought that we had a contract. We then scheduled a home inspection, called our mortgage broker and filled out some paperwork, and paid $250 to a roofing company for a roof…

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Is 10-Day Inspection Period A ‘Free Look’?

By Christopher Combs | February 20, 2022

Question: We signed a purchase contract to sell our Rio Verde home to Los Angeles buyers for $1.2 million with $50,000 earnest money. During the 10-day inspection period the buyers cancelled the purchase contract and demanded their $50,000 earnest money back. Their only reason for cancellation of the purchase contract was that they would be too far away from Scottsdale Fashion Square and the downtown Scottsdale area with restaurants, shopping, etc. We think that the buyers just found another home that they liked better than our Rio Verde home. Therefore, we don’t want to give the buyers back their $50,000…

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Real Estate Agent Experienced With Neighborhood Needed

By Christopher Combs | February 6, 2022

Question: My husband and I want to sell our Flagstaff home, which has appreciated significantly in value. My sister-in-law is a real estate agent in Prescott and has offered to list our Flagstaff home on MLS for a 4% commission, with only a 1% commission to her as the listing agent and a 3% commission to the buyer’s agent. I would like, however,  to hire a good Flagstaff real estate agent. My husband says that the buyer’s agent, not the listing agent, has to do all of the work regarding inspections, financing, etc., and he wants his sister to get…

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No Claim for Home’s Less Square Footage

By Christopher Combs | January 9, 2022

Question: The listing brochure said that the Scottsdale home that we purchased for $2.5 million was 6,300 square feet. Our prior home in Tempe was 5,800 square feet. After close of escrow, we tried to move our furniture and furnishings from the Tempe home into the Scottsdale home, and there was barely enough room. We then measured our Scottsdale home and discovered that our Scottsdale home was only 6,000 square feet, approximately 5% less than the 6,300 square feet stated in the listing brochure. The price of our Scottsdale home was based on $400 per square foot. We want the…

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Buyer Can Waive If Seller Refuses Home Inspection

By Christopher Combs | November 21, 2021

Question: We signed a purchase contract with the seller to buy a Glendale home for $450,000, and then deposited $10,000 earnest money with the escrow company. We were very excited, because not only were we having difficulty purchasing any home, this home was probably worth at least $500,000. Three days later our Realtor tried to schedule our 10-day inspection, but the seller’s agent said that the sellers were very unhappy about the $450,000 purchase price, and that unless we raised the purchase price to $480,000, they would not allow us to do the 10-day inspection. Our real estate agent said…

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Attorney Approval Required By Out-Of-State Investor

By Christopher Combs | October 3, 2021

Question: The buyer of our Tempe home is an investor from Illinois. In the purchase contract that we accepted there is a 10-day contingency for approval of the purchase contract by the buyer’s Illinois attorney. What does that mean? Answer: An attorney-review contingency in a purchase contract is not uncommon with out-of-state buyers, whether they are buying commercial properties or buying homes. Under the 10-day attorney-review contingency in your purchase contract, the Illinois buyer can cancel your purchase contract within the first 10 days of the escrow period, if the Illinois attorney disapproves in writing of the purchase contract.

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