Contracts
A 'contingency' in a real estate contract is best described as:
AA penalty clause for late closing
BA condition that must be satisfied for the contract to become binding or to continue✓ Correct
CA requirement imposed by the lender
DThe earnest money amount
Explanation
A contingency is a condition written into a contract that must be satisfied (or waived) for the contract to proceed. If the contingency is not met, the affected party may be entitled to terminate the contract.
People Also Study
Related Alabama Questions
- A buyer in Alabama includes a financing contingency in their purchase contract. If the buyer cannot obtain financing, the buyer is entitled to:Contracts
- An Alabama purchase contract contains a financing contingency. If the buyer cannot obtain financing, the buyer may:Contracts
- In a real estate sales contract, 'earnest money' is best described as:Contracts
- A purchase contract contains a home inspection contingency. The buyer's inspector finds a cracked foundation. The buyer may:Contracts
Key Terms to Know
Contingency
A condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Math Concepts
Study This Topic
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →