Contracts
A buyer includes an inspection contingency giving them 10 days to inspect the property. On day 8, the inspector finds a cracked foundation. The buyer's options typically include:
AOnly accepting the property as-is, since the contract is already signed
BTerminating the contract, requesting repairs, or requesting a price reduction✓ Correct
CExtending the contingency period indefinitely while repairs are negotiated
DFiling a complaint with AREC against the seller
Explanation
An inspection contingency gives the buyer the right to terminate, negotiate repairs, or request a price adjustment based on the inspection findings within the contingency period.
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Key Terms to Know
Contingency
A 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.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Math Concepts
State-Specific Concepts
AREC Regulation
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