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Arizona Real Estate Law
by Christopher A. Combs
The following is for informational purposes
only and is not intended as definitive legal or tax advice. You
should not act upon this information without seeking independent
legal counsel. If you desire legal, tax or other professional advice,
please contact your attorney, tax advisor or other professional
consultant.
Homebuilder Not Required to Reserve Lot or Enter
Into a Conditional Purchase Contract Before Issuance of Public Report
Question: We want to buy a new home to be constructed in
a subdivision in Avondale. The homebuilder is actively advertising
for home buyers in this subdivision, and real estate agents representing
the homebuilder are showing prospective buyers through model homes.
We wanted to buy a home at the advertised price, and the real estate
agent said that, after we paid our earnest money, this price was
“locked in” for at least eight months. The real estate agent told
us, however, that we could not sign a contract and pay our earnest
money now because the public report has not yet been issued. The
advertised price of our home has now increased eight thousand dollars,
and we still cannot sign a contract because of the lack of a public
report. Is it legal to increase the advertised price of a home after
we have verbally agreed to pay the advertised price?
Answer: A homebuilder is authorized to accept lot reservations
with a deposit prior to the issuance of a public report. A homebuilder
is also under certain circumstances entitled to sign a conditional
purchase contract with binding terms and conditions, subject to
the issuance of a public report. A homebuilder is not required,
however, to execute either a lot reservation or a conditional purchase
contract. If the advertising by the homebuilder is misleading, however,
you are entitled to file a complaint with the Arizona Department
of Real Estate.
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