Question: In a recent column, you said that if a seller and a buyer dispute the validity of a home’s sale, the standard Arizona Association of Realtors purchase contract requires mediation before a seller or buyer files a lawsuit. We bought a home in Phoenix that we loved, but during the 10-day inspection period, we learned that the home next door was a short-term rental home. We immediately demanded the cancellation of the contract and the return of our $20,000 earnest money. The seller says because the short-term rental home has never been a problem, we have no right to the $20,000 earnest money. Is the seller right? If not, how do we go to mediation to get our $20,000 earnest money back? Do we need a lawyer?Answer: First, you are probably entitled, if acting in good faith, to get your $20,000 earnest money back because of the short-term rental home next door. Second, you can Google “Phoenix mediators” and similar phrases to get the names, resumes and costs of numerous Phoenix mediators, including retired judges. Third, for a $20,000 earnest money deposit, the cost of a lawyer to represent you at the mediation would not be justified unless the seller hires a lawyer. If the seller refuses mediation within a reasonable time (e.g., two weeks), you can file a lawsuit to get your $20,000 earnest money. If the judge awards …
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