FACTS: A buyer and seller entered into a contract wherein the buyer agreed to release the $1,000 earnest money, after the inspection period, to the seller.  Thereafter, the buyer decided to cancel.

ISSUE: Can the seller still pursue legal remedies against the buyer if the Seller already has the buyer’s earnest money?

ANSWER: No.

DISCUSSION:         

Pursuant to Section 7b of the Arizona REALTORS® Residential Resale Real Estate Purchase Contract, in the event of Buyer’s breach, the Seller may, at Seller’s option, accept the earnest money as Seller’s sole right to damages.

Because the seller has already claimed the buyer’s earnest money, the seller will not be able to pursue other legal remedies for the buyer’s breach.