Question: We signed the standard AAR Purchase Contract (“Purchase Contract”) for the purchase of a Gold Canyon home near the Superstition Mountains. During the 10-day inspection period the seller agreed to make the minor repairs that our home inspector had recommended. We then flew back to Canada. Three days later our real estate agent called us to say that there had been a large monsoon which caused significant damage to the roof and some damage to the living room wall. The seller’s real estate agent told our real estate agent that the seller will fix everything before close of escrow. Our real estate agent has asked us to let the seller make the repairs, do another inspection, and then see if we want to buy the home. We no longer, however, want to buy the home under any circumstances. What is the legal procedure for us to cancel our Purchase Contract as soon as possible?
Answer: Under the Purchase Contract, lines 183-186, the legal procedure is that the seller must immediately update the Seller’s Property Disclosure Statement (“SPDS”) to disclose to you the new monsoon damage. You then have five days to cancel the Purchase Contract. Typically, however, if there is damage to the home after the 10-day inspection period, and the buyer no longer wants to purchase the home, the seller and the buyer quickly sign a mutual cancellation of the Purchase Contract. The earnest money is then released to the buyer, and the seller’s agent puts the home back on the market as soon as possible to find another buyer.