ISSUE:

The Contract was scheduled for closing almost thirty days ago. The seller cannot be located, and the buyer in good faith is still attempting to get financing. How long does the buyer have in order to get financing to close the transaction?

ANSWER:

If the Contract was contingent on the buyer qualifying for financing, the Contract automatically terminated on the scheduled closing date. If the buyer delivers a Notice of Unfulfilled Loan Contingency, the buyer is entitled to the refund of the earnest money. If the buyer does not deliver a Notice of Unfulfilled Loan Contingency, and the seller is located and delivers a Three-Day Cure Period Notice, the seller is then entitled to the earnest money if the buyer does not deliver the Notice of Unfulfilled Loan Contingency within that three-day period.

If the purchase contract was not contingent on financing, the buyer has a reasonable time to deliver the funds to the escrow company to close the transaction, unless the seller can be located and cancels the transaction (after giving a Three-Day Cure Period Notice). After the passage of a reasonable time the transaction will be automatically cancelled, for example, if nothing is done for ten years, the buyer cannot then deliver the funds to the escrow company and close the transaction.

Arizona REALTOR® Digest October 2006


About the Author

Michelle Lind

K. Michelle Lind, CEO of Arizona REALTORS®, is also an attorney, State Bar of Arizona board certified real estate specialist, and the author of Arizona Real Estate: A Professional’s Guide to Law and Practice.
Please note that this article is of a general nature and may not be updated or revised for accuracy as statutory or case law changes following the date of first publication. Further, this article reflects only the opinion of the author, is not intended as definitive legal advice and you should not act upon it without seeking independent legal counsel.