Specific Performance of an Option Contract to Purchase Real Property is Barred Absent Agreement on All Material Terms

By:  Richard H. Herold

On November 14, 2017, the Court of Appeals (Division 1), in Offerman v. Granada, LLC, 2017 WL 5352664, reversed a trial court order directing specific performance of an alleged option to purchase real property, holding that the alleged option was too indefinite to be specifically performed because the parties did not agree to all of the material terms of the option.

Tenant-Purchaser Offerman executed a two-year lease with Landlord-Seller Granada, which granted Offerman “the option to purchase [the] property…for a sales price to be determined at that time by an independent appraiser acceptable to both Tenant and Landlord.… Read More »

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Sellers Cannot Look to the Appraiser When Lenders Pull the Plug on a Prospective House Flip

By:  Eric Spencer

An outgrowth of Arizona’s housing downturn in recent years has been the proliferation of would-be real estate investors who purchase, renovate and flip residential properties.   On the other hand, in part to prevent the next downturn from occurring, lenders have tightened borrowing requirements and balked at financing any purchase of a “flipped” home that exceeds the appraised value.  Often caught in the middle of these competing interests are the appraisers themselves: when a lender-commissioned appraisal comes back substantially below the proposed purchase price, the prospective buyer often has no choice but to walk away.   And, when the real transaction falls apart accordingly, the real estate investor-turned-seller might seek to hold the appraiser liable for what it deems to be a negligently-conducted valuation of the property. … Read More »

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