Contracts
A purchase contract contains a home inspection contingency. The buyer's inspector finds a cracked foundation. The buyer may:
AOnly request a price reduction
BTerminate the contract and receive their earnest money back, or negotiate repairs with the seller✓ Correct
CAutomatically receive a full refund of all costs incurred
DRequire the seller to make all repairs within 5 days
Explanation
A home inspection contingency gives the buyer the right to terminate the contract and recover earnest money if the inspection reveals unsatisfactory conditions. Alternatively, the buyer may negotiate with the seller for repairs, credits, or a price reduction.
People Also Study
Related Alabama Questions
- An Alabama purchase contract's inspection contingency typically gives the buyer the right to:Contracts
- In a real estate purchase contract, a home inspection contingency protects the buyer by allowing:Contracts
- An Alabama purchase contract contains a financing contingency. If the buyer cannot obtain financing, the buyer may:Contracts
- A real estate purchase contract that requires the buyer to purchase a home inspection within 10 days is a(n):Contracts
- A home sells for $275,000. The seller's original purchase price was $220,000. What is the percentage of appreciation?Real Estate Math
- A buyer and seller disagree about who is entitled to the earnest money after a contract falls through. What should the Alabama broker do?Trust Funds
- A buyer obtains an 80% loan-to-value mortgage on a home. The purchase price is $275,000. What is the required down payment?Real Estate Math
- A broker who holds earnest money from a buyer and the deal falls through due to a contract dispute must:Trust Funds
Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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 →