Contracts
In Hawaii, when can a buyer legally back out of a signed purchase contract without penalty?
AA. Whenever the buyer changes their mind
BB. Only when a valid contingency is not satisfied and the buyer exercises their right within the contract period✓ Correct
CC. Any time before the deed is recorded
DD. After home inspection regardless of findings
Explanation
A buyer can exit a contract without penalty when a specific contingency (financing, inspection, appraisal, etc.) is not met and the buyer properly exercises their cancellation right within the contractual timeframe.
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Key Terms to Know
Contingency
A 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.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
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