Contracts
An Alabama purchase agreement includes a financing contingency. If the buyer cannot obtain financing, the buyer may:
AForfeit their earnest money
BCancel the contract and receive their earnest money back✓ Correct
CBe sued for specific performance
DBe required to pay the seller's carrying costs
Explanation
A financing contingency protects the buyer. If the buyer cannot obtain financing as specified in the contract, they may cancel the contract and receive a full refund of their earnest money deposit.
Related Alabama Contracts Questions
- What is an 'addendum' to a real estate contract?
- When a seller accepts a buyer's offer with written modifications, the effect is:
- In Alabama, a purchase contract signed under economic duress — where one party had no reasonable alternative but to sign — may be:
- In Alabama, when is an offer considered formally accepted?
- A purchase agreement includes a 'buyer's walk-through' provision allowing inspection shortly before closing. The purpose of this is to:
- When a seller provides a warranty deed with a covenant against encumbrances, they are promising that:
- In Alabama, commission disputes between brokers are typically resolved through:
- A contract clause stating 'in the event of buyer default, the earnest money shall be the seller's sole remedy' is an example of a(n):
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →