Contracts
A buyer's loan contingency in a California purchase agreement protects the buyer by:
AGuaranteeing the buyer will qualify for a loan
BAllowing the buyer to cancel and recover their deposit if they cannot obtain specified financing✓ Correct
CRequiring the seller to provide financing if the bank declines
DLocking the interest rate for 30 days
Explanation
A loan contingency allows the buyer to cancel the contract and receive a full refund of their deposit if they are unable to obtain financing on the terms specified in the contract within the contingency period. Removing this contingency exposes the buyer's deposit to potential forfeiture.
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