Contracts
A Colorado buyer's offer includes a 'financing contingency.' This means:
AThe buyer has already been pre-approved and the contingency is a formality
BThe contract is conditioned upon the buyer obtaining specified financing; if financing fails, the buyer may terminate✓ Correct
CThe seller must help the buyer secure financing
DThe broker is responsible for arranging the buyer's mortgage
Explanation
A financing contingency makes the contract conditional on the buyer obtaining financing with specified terms. If the buyer cannot secure the required financing and properly exercises the contingency, they may terminate and receive their earnest money back.
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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.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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.
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