Can a buyer cancel a purchase contract if they cannot find renters for the property?
There are a series of articles in Arizona Realtor Magazine that discuss issues related to the purchase and sale of Arizona Real Estate. They are very informational, and excellent examples of what can happen during a real estate transaction. Although this post is not legal advice, and is for informational purposes only, I thought it would be great to share with those of you who may be interested in buying or selling homes in and around Chandler, Arizona in the near future.
Scenario - A buyer is purchasing a home as an investment property. The buyer concludes that it will be difficult to rent the home during the 10-day inspection period, and elects to cancel the Contract. Can the buyer cancel the Contract and get their earnest money back if they determine they cannot find renters for the property?
Explanation/Response/Result/Solution - According to the Arizona Realtor magazine article, probably. The buyer has the right to investigate whether the home would be suitable as an investment property during the inspection period. In Section 6a, lines 187-189 of the Contract, the buyer has the right to "make inquiries and consult government agencies, lenders, insurance agents, architects, and other appropriate persons and entities concerning the suitibility of the Premises and the surrounding area". Given this information, it is possible for the buyer to cancel the Contract based on the inability to find renters for the property. However, that same buyer would probably not be able to cancel the Contract for reasons that are not related to the property, such as a buyers job transfer, or the failing health of the buyer.
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