Contracts
What is a 'mortgage contingency' removal and its significance in Delaware?
AThe automatic removal of all contingencies upon contract signing
BA buyer's formal waiver of the mortgage contingency — after which the buyer is obligated to close regardless of financing status, accepting the risk of potential earnest money forfeiture if financing fails✓ Correct
CThe lender's removal of conditions before approving the loan
DA seller's right to remove the mortgage contingency at any time
Explanation
When a buyer removes (waives) their mortgage contingency in writing before the deadline, they are committing to close regardless of whether financing is actually obtained. If financing falls through after removal, the buyer defaults and risks forfeiting the earnest money deposit. Buyers should only remove mortgage contingencies when they are confident in their financing. Some buyers remove contingencies to make their offers more competitive.
Related Delaware Contracts Questions
- An addendum to a real estate purchase contract:
- A Delaware seller accepts an offer for $350,000 but the sale is conditioned on the buyer obtaining a satisfactory home inspection. The result of a home inspection contingency that reveals a major foundation problem should be:
- Which of the following best describes 'time is of the essence' in a Delaware real estate contract?
- What is 'lis pendens' versus 'notice of pendency' and how do they affect Delaware contracts?
- Under an 'exclusive agency' listing agreement in Delaware, the seller retains the right to:
- What is an 'offer to purchase' in Delaware real estate?
- What is a 'net listing' and why is it considered controversial in Delaware?
- A Delaware seller fails to disclose a known roof leak on the disclosure form. The buyer discovers it after closing. What are the buyer's potential remedies?
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →