FACTS: A buyer entered into an Arizona REALTORS® Residential Resale Real Estate Purchase Contract for a property on Maple Ave (the “Maple Contract”).

Subsequently, the buyer found a second property he liked better and entered into another Arizona REALTORS® Residential Resale Real Estate Purchase Contract for a property on Elm St (the “Elm Contract”).

The buyer used Agent A for both contracts.

Agent A advised buyer how to cancel the Maple Ave. property to obtain a refund of his earnest money deposit and proceed with the Elm Contract.

ISSUE: Should Agent A disclose to the sellers the fact that buyer had entered into multiple contracts to purchase property?

ANSWER: Yes.

DISCUSSION:

Any seller of real property must disclose to a buyer any known fact relating to the potential inability to close the transaction. See Lombardo v. Albu,  Ariz. 97, 14 P.3d 288 (2000). This same obligation is imposed upon real estate licensees. Furthermore, A.A.C. R4-28-1101(B)(2) obligates all licensees to disclosure in writing to all other parties “any information that the buyer or lessee is or may be unable to perform.”

Knowing that buyer would and could purchase only the one (1) property, buyer’s execution of a second purchase contract directly impacted his ability to purchase the Maple Ave. property. Disclosure was therefore required.