Contracts
In Illinois, what is a 'contingency' in a real estate purchase contract?
AA fee charged by the title company for issuing title insurance
BA condition that must be satisfied before the contract becomes binding or before the buyer is obligated to close✓ Correct
CA penalty clause for failure to close on time
DThe attorney review period at the beginning of the contract
Explanation
A contingency is a condition in the purchase contract that must be satisfied (or waived) before the transaction can proceed. Common contingencies in Illinois contracts include: financing contingency (buyer must obtain mortgage), inspection contingency (buyer may inspect and request repairs or cancel), attorney review (attorney may modify or cancel the contract), and appraisal contingency (property must appraise at purchase price).
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