A Delaware home purchase contract includes a mortgage contingency requiring the buyer to obtain financing at 7% or lower. If rates rise to 7.5% and the buyer cannot qualify, what happens?
Why The buyer may terminate the contract under the mortgage contingency and receive their earnest money deposit back Is Correct
Answer B: The buyer may terminate the contract under the mortgage contingency and receive their earnest money deposit back
Exam Tip: Contracts
Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.
Key Contracts Terms in This Question
People Also Study
Related Delaware Questions
- An earnest money deposit in a Delaware real estate contract is best described as:Contracts
- Which clause in a Delaware purchase contract allows the buyer to withdraw if they cannot obtain financing?Contracts
- In a Delaware real estate transaction, 'time is of the essence' means:Contracts
- In Delaware, what is 'seller financing' (purchase money mortgage)?Finance
- In Delaware, what is an 'earnest money deposit' (EMD) and what happens to it if the buyer defaults?Contracts
- A Delaware buyer's earnest money deposit of $12,000 represents 3% of the purchase price. What is the full purchase price?Real Estate Math
- A conventional mortgage loan is one that is:Finance
- The Delaware Seller Disclosure of Real Property Condition Act requires sellers to:Delaware License Law
Key Terms to Know
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.
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.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Math Concepts
State-Specific Concepts
Study This Topic
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →