Contracts
In Illinois, a real estate purchase contract that contains an 'inspection contingency' typically gives the buyer the right to:
ACancel the contract only if the home has major structural damage
BHave the property professionally inspected and, depending on the results, negotiate repairs, a credit, or cancel the contract✓ Correct
CHave the seller make all repairs identified before the inspection
DAutomatically receive a 5% price reduction if any defects are found
Explanation
An inspection contingency allows the buyer to have the property inspected by a professional home inspector within a specified time period. Based on the results, the buyer may: (1) accept the property as-is, (2) request specific repairs or a credit from the seller, or (3) if the seller and buyer can't agree on repairs, cancel the contract and receive their earnest money back.
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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.
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.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Math Concepts
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