The buyer and seller entered into a contract for the sale of commercial property which requires the seller to finance $1,000,000 pursuant to a seller carry back. The purchase price is $1,250,000. The buyer is required to put $250,000 down pursuant to the contract but does not have the cash to do so. The buyer is therefore going to borrow money from a “friend” to fund the down payment.
Is the buyer’s agent obligated to disclose that the buyer does not have the cash for the down payment?
Here, the seller is financing $1,000,000 for the buyer as part of the transaction. The buyer’s financial wherewithal is therefore material to the transaction. See A.A.C. R4-28-1101(B) and Lombardo vs. Albu, 199 Ariz. 99, 14 P.3d 288 (2000). The buyer’s agent is therefore obligated to disclose that the buyer does not have the $250,000 down payment.