Contracts
A purchase contract that requires the buyer to obtain mortgage financing within 21 days includes a financing contingency. If the buyer cannot obtain financing within that period, the typical result is:
AThe buyer must complete the purchase without financing
BThe seller automatically extends the deadline by 14 days
CThe buyer may terminate the contract and receive a full refund of earnest money✓ Correct
DThe seller may sue the buyer for specific performance
Explanation
If a financing contingency is not met within the specified period and the contingency is not waived, the buyer may terminate the contract and receive a full refund of their earnest money. This protects buyers from losing their deposit if they cannot obtain the required financing.
People Also Study
Related Illinois Questions
- An Illinois residential purchase contract that includes both an attorney review period and a home inspection contingency provides the buyer with:Contracts
- In Illinois, the standard residential purchase contract typically includes a 'mortgage contingency' that protects the buyer by:Contracts
- A real estate purchase contract that contains a contingency for the buyer to sell their current home is known as a:Contracts
- Which federal law requires lenders to provide borrowers with a Loan Estimate within three business days of receiving a mortgage application?Finance
- A mortgage that requires the borrower to pay interest only for a set period, after which they must pay off the full principal balance, is called a:Finance
- Which federal law requires lenders to provide borrowers with a Loan Estimate within 3 business days of receiving a mortgage application?Finance
- An Illinois broker who receives an earnest money check must deposit it in the firm's trust account within:Illinois License Law
- In Chicago, the Security Deposit Return Ordinance requires landlords to provide tenants with an itemized list of damages and retain supporting documentation within how many days of the tenant vacating?Property Management
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.
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.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Math Concepts
Study This Topic
Practice More Illinois Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Illinois Quiz →