Contracts
A Hawaii buyer makes an offer that is accepted by the seller. Before closing, the seller passes away. What happens to the contract?
AA. The contract automatically terminates
BB. The contract remains binding and the seller's estate must perform✓ Correct
CC. The buyer must renegotiate with the heirs
DD. The contract is void due to changed circumstances
Explanation
A signed real estate contract is binding on the parties' heirs and estates. The seller's death does not automatically void the contract; the estate must perform.
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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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