Contracts
The Colorado Contract to Buy and Sell includes a 'loan termination deadline.' If the buyer cannot obtain financing, by this date the buyer must:
AAutomatically proceed to closing with cash
BNotify the seller in writing and terminate the contract to receive the earnest money back✓ Correct
CRequest a 30-day extension from the seller
DAccept the seller's backup financing offer
Explanation
The loan termination deadline is the final date for the buyer to terminate the contract due to inability to obtain financing on terms acceptable under the contract. If the buyer fails to terminate by this deadline, the loan contingency is waived.
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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.
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.
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