Contracts
A buyer's offer is contingent on obtaining financing. The buyer is unable to qualify for a loan and properly invokes the financing contingency. What happens to the earnest money?
AThe seller keeps the earnest money as liquidated damages
BThe earnest money is forfeited to the brokerage
CThe earnest money is returned to the buyer✓ Correct
DThe earnest money is held by AREC pending resolution
Explanation
When a buyer properly invokes a valid financing contingency because they cannot obtain a loan, the contract is voided and the earnest money is returned to the buyer.
Related Arkansas Contracts Questions
- An option contract in real estate gives the optionee the:
- An 'evergreen clause' in a real estate contract automatically:
- Consideration in a real estate contract must be:
- An addendum to a real estate contract:
- A contract that has been fully performed by both parties is called:
- A seller who fraudulently misrepresents a material fact to induce a buyer to sign a contract may be subject to:
- Which clause in a purchase contract gives the seller the right to continue showing the property while a contingency is pending?
- In a real estate contract, 'time is of the essence' means that:
Practice More Arkansas Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Arkansas Quiz →