Contracts
A Florida buyer includes a 'financing contingency' in their offer. The contingency states that the offer is contingent on the buyer obtaining a $300,000 mortgage at no more than 6.5% interest for 30 years. The buyer is offered 6.75% by the lender. The buyer may:
ANot cancel since the rate difference is insignificant
BCancel the contract and recover the deposit since the financing terms offered don't meet the contingency requirements✓ Correct
CCancel only if they can prove they made a good faith effort to obtain financing
DBe required to accept the higher rate since all lenders offer similar rates
Explanation
A specific financing contingency sets terms (interest rate, loan amount, term). If the buyer cannot obtain financing at those terms — even if financing is available at different terms — the contingency allows the buyer to cancel and recover the deposit. The buyer is not required to accept different terms than those specified in the contingency. Good faith effort is typically implied but the specific terms control.
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