Contracts
Which clause in a Delaware purchase contract allows the buyer to withdraw if they cannot obtain financing?
AEscalation clause
BMortgage contingency clause✓ Correct
CTime-is-of-the-essence clause
DHold harmless clause
Explanation
A mortgage contingency clause allows the buyer to cancel the contract and recover earnest money if they are unable to secure satisfactory financing within the specified period.
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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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